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Forums » Wholesaling » Assigning Contracts in California

Assigning Contracts in California Subscribe to Assigning Contracts in California

2 posts by 2 users

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Ryan Black

Real Estate Investor · Rancho Cucamonga, California


Forum_avatar_avatar-trex5463

Icon_minipost Sep 08 '09, 07:04 AM

Hey guys I am a new investor who has been thoroughly enjoying the wealth of info on this site, but am looking for an answer to a question that will determine how i put my pending first deal together.

If any investors on here either live in California or have done enough investing in California to know the laws well, I was wondering if someone could tell me if there are any laws against assigning your rights in a contract to someone else(investor and/or end buyer), more specifically with Lease-option deals.

It looks as though i may be able to put together my first Lease-option deal, where in this case i can only profit through the option money from a buyer i will find(the seller isn't asking any money upfront from me). My question is in California am i able to just find a tenant/buyer and assign my contract with the seller to him/her and collect whatever down payment they can afford as my assignment fee?...or do i have to sandwich myself in this one even though i cant make any profit in the rent or final purchase price because of the tightness in the numbers on this one???

Edited: 06/26/2010 at 09:38AM


Brian P

Real Estate Investor · Salt Lake C[ty, Utah


Forum_avatar_avatar-bti

Icon_minipost Sep 11 '09, 04:29 AM

Ryan

Yes, it is currently legal and is done all the time through co-operative assignments and flex options.

I say currently because there are some rumors that the DRE is going to be taking a look at these because there are a lot of people doing this and consider themselves exempt because of acting as a principle in the deal which they currently are..

I expect there will be a test case, maybe a seller asking for the money the investor made back. Claiming the investor had no intent to remain in the deal. Only intent was to act as a broker and that this activity is really "disguised" brokerage, especially if the investor has a track record of this activity .I believe the courts will agree if the investor picked fits the profile.

Or, maybe Sacramento will just pass a law required the investor to stay in the deal for a set period of time and to maintain liability.during that time. Or limit the number of deals they can do this way to so many a year. Or both.

Anyway, presently you can make hay while the sun shines.and the amount of time it takes Sacramento to do anything is positively a factor in not seeing it happen soon.

Edited: 06/26/2010 at 09:40AM


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