I am an investor purchasing a home I believe to be a good deal from a wholesaler after due diligence. I signed the assignment agreement and paid earnest money, but it has a non-assignment clause so I cannot reassign my rights to another end buyer for a fee. Due to low inventory, I believe I can turn around and sell this for a decent profit to another investor yet they can still make money too. However I am told I cannot market that property for buyers. According to sources and Property Onion, "If you are the assignee of the contract, then you only have the exact same rights as the assignor, which means you cannot market the property for sale."
My question is am I able to market for investor buyers for my equity rights or do I just need to wait until after close and then market the property? I thought of a double close but am hearing of legal issues to market my end of it. Suggestions?
@Trace H. are you saying the agreement between you and the wholesaler has a non assignment clause or the original contract? In either case you cannot assign the contract. In the later case you have no deal legally. The wholesaler can not assign it to you without the owners written permission.
However you can do a double close. In some states you may not be able to market it until you close on it. In my state Maryland I firmly believe you can market a property you have under contract. (But I am not a lawyer and that is not legal advice.)
Whats going on Trace,
When I assign my deals I also have a non-assignment clause. This is done in order to prevent a deal from being marketed heavily by others and having multiple assignments (which is the recipe for disaster.)
If you committed and signed the assignment agreement then you will have to close and then sell the asset to the buyer you have.
@Ned Carey the non-assignment clause is between the wholesaler and myself. I was just wondering if there was a way to market my interest without being illegal. I want to be above board and not be linked to any type of sleazy deal. Thanks for the info.
@Joe Gonzalez Hi Joe, I can see why wholesalers would use that clause. I just wondered if there was a way legally to market for a buyer for my interests so I can get in and out quicker without all those holding costs as obviously that affects my bottom line. Thanks for the info.