California L/O and Prop 13 taxes

General Real Estate Investing
1

Here is a warning from John T Reed, a rater of the various real estate experts out there, about L/Os in California:

They (lease options) trigger reassessment for property-tax purposes in California, thereby wiping out the protection California homeowners normally get from Proposition 13.

Is this true? Or is Mr Reed simply blowing smoke?

2

I personally haven’t heard of this and I have done a few in SD. I now some investors that do only LO and haven’t heard of it either, but would like to know if it is true. Anyone??

3

Reed is one end of the horse. I’ll let you decide which end that be. :cool