Real Estate Fable EP.12 | The Flipper Girl and the Scandal of Direct Installments

Real Estate Fable EP.12: The Flipper Girl and the Scandal of Direct Installments

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Once upon a time, there was a woman named Ae,
a visionary real estate entrepreneur with years of experience.
One day, she took a course called “Make Millions from NPA Properties.”
After completing it, Ae realized this business model could make her a fortune.

Many might wonder — what exactly are NPA properties?

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NPA (Non-Performing Assets) are properties repossessed by banks
from borrowers who defaulted on their loans.
The bank then sells these assets to recover its losses.

Some NPAs are also properties purchased from the Legal Execution Department
and resold by the bank.

In simple terms —
NPA = houses or land once owned by others, seized by the bank, and resold.

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NPA properties are fully owned by the bank,
but are sold 10–40% below market price
to clear bad assets from their portfolio.

According to the Bank of Thailand’s rules,
banks can hold NPA assets for up to 5 years (extendable to 10).
If a bank holds too many,
it must reserve capital equal to the asset value,
and may face operational restrictions.

So, naturally, banks want to offload NPAs quickly.

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Ironically, NPA buyers are not end-users seeking homes —
but investors.

Though banks claim they “don’t encourage” buying for profit,
not encouraging doesn’t mean not allowed.

And since these investors usually have cash
and can buy several properties at once —
the bank looks the other way.
Everyone wins.

It’s that grey area,
like the old saying:
“The mouth says no, the eyes wink yes.”

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Real homebuyers usually avoid NPAs —
because these are as-is sales.
Banks don’t renovate or repair them.

Most people lack renovation skills,
fear cost overruns or contractor fraud.
That’s where people like Ae come in —
experts in renovation who buy NPAs,
fix them up,
and sell for profit.

In real estate,
they’re called Flippers —
not illegal at all.

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Banks even allow special down payment plans for NPAs, such as:

1. Deposit 10% upfront

2. Pay the remainder within 1–2 years

3. Option to finance the rest through the bank later

A model designed to attract buyers and move inventory.

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Typical NPA installment contracts include these key terms:

1️⃣ “As-is” condition — buyers can’t claim defects or refuse purchase.
2️⃣ Minor land discrepancies under 5% aren’t grounds to cancel.
3️⃣ Late payments (1–3 months depending on the bank) = breach.
4️⃣ Entering or using the property requires an additional 1.5% payment.
5️⃣ Buyer bears all utility bills and taxes, past or present.
6️⃣ If ownership transfer fails (e.g., court reversal), the bank refunds — no interest, no damages.
7️⃣ All renovations become bank property if the deal is terminated — no compensation.

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During the 1–2 year installment period,
Flippers like Ae renovate and find buyers.

Usually, they target buyers who can pay in full or get loans.
But Ae noticed another group —
people who wanted homes but failed loan approvals.

She saw opportunity.

The NPA contract, as she understood it,
didn’t forbid subleasing or secondary agreements,
only required proper payment and full completion.

So Ae created a “rent-to-own” model —
customers paid installments directly to her
while she “fixed their financial profile.”

#This was Ae’s unique twist on the Flipper business.

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She offered to make them her “employees,”
providing salary slips, tax filings, and social security contributions
so they could qualify for loans.

Once approved, the buyer would finance directly with the bank,
and Ae would collect her margin.
Perfect — on paper.

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But Ae forgot one thing —
legally, a lease-purchase contract must be made by the property owner.
Ae wasn’t the owner — the bank was.

That made her contract void
under Civil and Commercial Code Sections 137 and 1357.

Meaning:
All payments made to Ae must be refunded.
She couldn’t legally forfeit any installments.

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Meanwhile, Ae could argue
that the buyer used the property
and should pay for occupancy.
It would be a legal tug-of-war.

But if Ae collected payments knowing she wasn’t the owner,
she could face criminal charges for embezzlement (Section 352) —
up to 3 years in prison or a 60,000 baht fine.

If she intentionally concealed the ownership issue,
it becomes fraud (Section 343) —
up to 5 years in prison or 100,000 baht fine.

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If the bank found out Ae subleased or assigned rights
without permission,
they could terminate the contract
and seize both the property and payments.

Worse, Ae’s fake payroll and document setups
could count as forgery (Sections 264–265),
a serious criminal offense, especially for government-related documents.

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If the bank already approved loans based on falsified records,
they could demand full repayment plus damages.

Had Ae sought the bank’s written consent
to let another buyer step in,
and had the buyer pay directly —
none of this would’ve happened.

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But that wasn’t Ae’s path.

To cover her cash flow,
she mortgaged properties she already owned
to private lenders —
a risky loop.

Private mortgage deals rarely give full cash value.
They deduct registration fees (1%),
advance interest (2%),
and “service fees” (up to 7%).

So for every 100 baht of collateral,
Ae got only 90 in hand,
but owed 112 at redemption (12% per year).

To pay off one property,
she had to mortgage two or three others.

Until one day,
one buyer defaulted —
and her financial gears snapped.

#Ae’s cash flow collapsed.

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The mortgaged properties were still occupied by her installment buyers.
When Ae couldn’t redeem them,
the private lenders foreclosed,
leaving innocent buyers stranded.

Her once-profitable business model
crumbled overnight.

Reputation ruined.
Possible criminal charges looming.

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When she could no longer fix anything,
Ae detonated the situation herself, saying —
“If you want it, go ahead and sue.”

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By now, it’s clear:
no one in this story is innocent.
Everyone played the game,
each holding a knife,
balancing on a three-legged stool.

And when one leg — Ae’s — broke,
all the knives turned toward her.

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Ae defended herself with all the evidence she had,
perhaps thinking:
“If I’m guilty, then we all are — not just me.”

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In the end,
if Ae faces prosecution,
she’s likely the kind who won’t go down alone.

The End.

#นิทานอสังหา EP.12

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