In real estate money laundering, which technique involves paying below-market price to a cooperative seller for a property and later selling at its true value?

• A. The Loan Back
• B. The Reverse Flip
• C. Ghost Shipping
• D. Shell Companies

Answer: (B)

Real estate money laundering often relies on structuring property deals to disguise illicit funds as legitimate profits. In this pattern, a cooperative seller accepts a price well below market for a property, effectively bringing illicit funds into the transaction. The same property is then sold to a different buyer at its true market value, creating a recordable gain that appears legitimate. This two-step setup—the initial underpriced purchase followed by a later, full-valued sale—creates the illusion of a normal flip while laundering the money behind the scenes. This specific technique is called a reverse flip because the flow of value starts with a below-market entry price and ends with a market-price exit, disguising the origin of funds. The other options don’t describe this two-stage manipulation: a loan back involves funds moving through a loan arrangement rather than an undervalued sale followed by a higher-priced resale; ghost shipping relates to using shipping channels to move funds; shell companies are vehicles to conceal ownership but don’t specify the paired underpriced sale and higher-valued resale that defines a reverse flip.