Flip Flop Agreement Law and Legal Definition

Flip flop agreement refers to partnership agreement allocating disproportionate high profits and losses from a real estate undertaking to the investors, and then at a certain time in the future, switching the profits or losses to an allocation more beneficial to the developer. For instance, a developer originally takes twenty percent of the profits and the investors take eighty percent for the first twenty years, and then they change percentages and each receives fifty percent of the profits or losses.