Simple.If your plan is to try to find 2 end buyers, in addition to the assignability provision, you'll want to also allocate the purchase price for each parcel in the original agreement, then deal with the contemporaneous closing issue in your assignment agreements. 

We’re already using less water than the amount we’ll be allocated if they declare the drought restrictions. 

To allocate the basis, look at the value when you purchased the property, not the FMV as of now. 

You and your advisors can determine how to allocate the sale price between the real estate and the business (non-real-estate) so as to get the biggest tax savings. 

Or are we able to allocate profits, interest deductions, depreciation, etc. based on what we agree even without a formal agreement?

If you are not allocating these expenses over time, it can be crippling when the costs hit your bottom line.Here is what happens over time when you don't raise rents.

So if you're the President of a bank that does both HELOCs and 1st position mortgages, where would you allocate your resources? 

I would be willing to make some concession on the price if I could do a Reverse 1031 and allocate the proceeds from the sale back against the purchase that I made last week. 

This is almost certainly cash flow negative when properly allocating for all expenses. 

Financing: Conventional 30yr fixed at 4.75%Purchase price: 215,000Down Payment: 43,000Loan Amount 172,000Closing costs: 3,000Total outlay: 46,000Income:Monthly rental income:  (700+700) = 1400Monthly expenses (please critique my % allocations, based off BP calculator recommendations):Mortgage: 897.23Vacancy 5%Prop Mgmt: 8%Cap Ex 8%Repairs/Maint: 8%Water $60/monthProp Tax: $125/monthInsurance: $77/monthResults:Fails 1% rule (Needs 2k in rent or 140k purchase price)Fails 50% ruleCash Flow -$165CoC Return -4.3%https://www.biggerpockets.com/...Bad deal as is, huh?