California subjects estates to probate at very low thresholds, and often having a Will is not sufficient to avoid probate.These are all things you will want to discuss with your attorney and CPA.

So if they are illegal in your state, I would be very cautious about wholesaling via an assignable contract if you are licensed.While it would cost a little more, Id suggest buying then reselling to avoid a potential net listing.

Should I avoid them all together?

You could try and charge a % of profits, but how easy would it be for them to operate either under the table or at a "loss" to avoid that.So if it were me, i'd look at doing a lesser amount to start and phrase it as a benefit to them to help them get their business off the ground with an excerpt to reevaluate after a year.

To avoid losing their credit rating they signed the property back deed-in-lieu-of. 

If it works out, I plan to invest quite a bit more out of an IRA to avoid the tax issue that you mentioned.I would definitely be interested in a meet up, thanks for the invite.  

@Kris Zabish , Looks like you already have an S-corp that is helping you avoid SE taxes on your net Income. 

To avoid throwing anyone under the bus I had a bad experience with, I will just list 3 I have used and have been happy with.

We want to avoid potential damages of non-use: frozen pipes, HVAC getting funky, etc.

PM me if you want further information or insight about the better areas to invest, or conversely, areas to avoid.