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There are some who may tell you that real estate wholesaling is illegal and try to discourage you from doing it. The truth is that real estate wholesaling is a perfectly legal real estate strategy. Because contract rights are considered property, they can be transferred to others just like a piece of property such as a home or car.
Let’s say you have a contract to purchase a number of items each month from a dealer, at a certain price. The contract runs for a year. You then decided the product is no longer working out for you, and you’d rather not buy any more. As long as your contract allows it, you can just find someone else who wants to buy the same number of items each month and sell your rights and obligations under the contract to him. You can do this by assigning your Purchase Agreement over to someone else who would like to buy the product.
Most contracts permit an assignment as long as the other party to the contract approves the assignment. And many contracts require the other party to approve of an assignment as long as the assignment is “reasonable,” meaning that the assignment won’t jeopardize the security of the other party or increase the other party’s risks.
Since real estate wholesalers do NOT sell properties, but rather their equitable right in a purchase contract to a certain property it is a perfectly legal real estate investing strategy.
So in conclusion, what I have shared with you is that once you have a property under contract, all rights of the contract is considered “property” and therefore under your control. Therefore you reserve the right to do what you want with it. Assigning your right to purchase the property once it is under contract is your right. To your success! Lane McCaw