Risks of Assignments

[David F.]

I have read in many different books/articles the Pro's of assigning real estate purchase agreements. It seems like a simple enough strategy for people to get started in real estate who may not have enough money for a downpayment or can qualify for a mortgage. I don't have enough for a downpayment, I find a property, lock it up in a P&S agreement and write down "theHun69 and/or assignee" in the purchaser section. I go to a list of investors, and bascially can assign that contract to any one of them for an agreed upon fee that is negotiated between ourselves.

QUESTION: Let's assume that I assign the contract to Mr. Moneybags. Moneybags has the money, we pass through the financing condition, and then one day before closing, Moneybags loses all of his money in the stockmarket/leaves to live in Nassau, or for whatever reason simply does not close on the deal. MY NAME IS STILL ON THE CONTRACT!!! What is my liability here? I would think that I would now have to close on this contract, which, I obviously can't.

1)What are the consequences?
2)Are there any ways of mitigating/managing this risk?
3)Instead of doing this deal via assignment, can I have a standing agreement with Moneybags that states that if I present them a real estate opportunity, put together an investment package and they close on that deal, then I get a piece of the deal, either through a fee or possibly equity in the deal...although if I do this, how is this not a form of agency, and is this not illegal without the proper licensing?

I would appreciate your thoughts/comments/advice. I took my first step in real estate investment by meeting a mortgage broker today, I am keeping up this momentum and I think this is a viable strategy, although the risks concern me.

Take care,

THE HUN.