Real estate flipping happens when a speculator or a flipper buys a condo unit which is still under construction and has no intention of living in it or even fully paying or financing for it.  Instead, the flipper buys the condo unit in the hopes that the property will go up in price as the project nears its construction date. When building does commence, the buyer then sells his rights to the property for a much higher profit or a higher cost than what he initially spent on it.

Can Money Be Made Off This?

Theoretically, yes. When a person sells another the condo he bought, the buyer is actually paying for the right to own that unit but at a higher price. Thus, if seller A purchased the rights at $300,000 and sold them to buyer B at $350,000, seller A would stand to make $50,000 in profit. Buyer B would also pay seller A the equivalent (or more) of seller A's down payment on the unit. However, no money actually changes hands until the unit is built, and the sale is actually funded. Brokers usually get their pay out of the final sale funds upon the completion of the venture.

The State of Panama Real Estate Ventures

There have been some failures in this area of real estate in Panama where real estate flipping happens. For example, when an 80-storey condo unit construction is restarted again after closing, its subsequent on-and-off nature means that it might be anybody's guess if it's really going to be finished or not. There are around 250 housing projects already in place, all in various stages of progress. The people who may be interested in projects like these need to be either retired or have their own income. Because of the declining real estate market in North America, Americans can't simply sell their home, take the profits and buy a condo in Panama for their retirement. It looks like the market will recover in a couple of years, but it's still dropping steadily.

Will these Condominium Projects Ever be Completed?

It's unlikely that a good number will ever get built if flipping happens. Developers who place shows in Chicago and other similar places have used "retire in exotic Panama " as their theme. The salespeople who work these venues don't get paid until a sale is made, so they have a big chance on going to the wrong direction – flipping. The buyers these developers court are often not those who really want to stay in Panama and lenders are reluctant to deal with them. Those who don't understand take lectures are indoctrinated.