Hi everyone. I am new to this forum. I am an active investor, broker and certified appraiser. Somewhat experienced in Lease Options and now really interested in dealing with cooperative assignments exclusively. My question for those who actively do CA is how do you get a seller contracted?
In another words, when you find a seller do you have to sign a CA Lease, Option to Purchase and Assignee Agreement to act as a tenant/buyer yourself and then find and assign it to a third party? I personally would rather keep it simple and have one contract between myself and the seller dictating the services I would be providing for the seller and collecting a portion or all of the option fee for such services. Now mind you there may be issues of Licensing or having a real estate license to produce such a contract between myself and the seller but that would not be a problem for me since I already have a brokers license. This way one would not need to take on a tenant/buyers role and less liability. Does anyone here do this kind of cooperative assignment and if so what kind of contract do you use between you and the seller.
You just described a Agency relationship. Since you’re a Broker I don’t see issue… I am not certain why you’re afraid of a lease relationship. Sandwich leases are done all of the time. The larger issue may be the availability of a tenant buyer. Although I believe tenant buyers will come from people downsizing and having to vacate their dwelling due to a foreclosure, both owners and occupants.
One way I am marketing for buyers is asking the title company for a farm list of absentee owners around the property and I am mailing to the occupants that I have a dwelling available either as a Lease and Option or as a seller financing.
I am not afraid of the agency relationship but I am trying to offer my Lease/Purchase services to seller or landlord without being in the middle and then assigning my contract to the end tenant/buyer. I am trying to expand out and offer my services out of state without having to do a CA or Sandwich lease. I would rather just draft a consultation contract with a seller/owner where I would find and help market there property to find a tenant/buyer and get paid a certain fee for my consultation services. I am trying to see if this would possible. I believe it would be a lot more simpler, quicker and less liability since I do not have to Lease, Option then Assign.
I am not certain if you plan to but if you charge a fee prior to a service then you have to have your program approved by the DRE. Crazy law of ours… You can take a retainer and draw against that retainer without an issue as long as the client athorises the costs.
As for out of state I think youll have a problem in any state youre not a licensee in…
A cooperative assignment is the way you get out of the middle of a sandwich lease option. If you understand lease option and a sandwich lease option, then you use the same forms and contracts to become the master renter in a sandwich lease option. You are a principal in the deal with both the landlord/seller and your tenant/buyer.
The cooperative assignment part happens when you take the lease option agreement with your tenant/buyer, assign it to your landlord/seller, and get a release of liability from your original agreement with the seller. For your assignment fee you keep the option consideration you collected from the tenant/buyer.
Not that hard. Since you are a principle at each end of the deal, no agency relationship to worry about, in my opinion. I believe Bill Bronchick also has a course on this subject.