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Author: Mark Ainely | Partner GC Realty & Development & Co-Host Straight Up Chicago Investor Podcast
A lot of investors talk about “wholesaling” like it’s just finding a deal and blasting it out to a buyer list. But the real skill, the part that keeps you from getting sued, from paying unnecessary taxes, or from looking shady in front of a seller and their attorney, is how you structure the contract from day one.
That’s what this Tuesday Tip is about.
Mark and Tom sit down with Chance Badertscher (Chance the Lawyer) to break down what it actually means to assign a contract, when you should do it, how to do it cleanly, and why your LLC and operating agreement matter way more than most newer investors realize.
And yes, Chance is officially out on his own now as “Chance the Lawyer LLC.” That alone is worth listening for.
Questions We Answer in This Episode
Q: What does it mean to assign a contract in real estate?
A: Assigning a contract means the original buyer under contract is not going to be the end user of the property. Instead, they pass that contract to a new buyer (usually for a fee). This is common in wholesaling and can be done without the wholesaler ever owning the property, as long as the seller approves the assignment.
Q: What are the two main ways wholesalers “flip” a deal?
A: One is assigning the contract directly to the end buyer. The other is a simultaneous closing, where there are two closings back-to-back. The episode focuses mainly on the assignment method and how to do it correctly.
Q: Can you assign a contract without telling the seller?
A: No. You can’t transfer a contract without approval. The clean approach is to disclose it upfront and make sure the contract language supports it. People get in trouble when they try to sneak it through or avoid the conversation.
Q: What’s the “junior wholesaler” mistake that gets people burned?
A: Not disclosing the assignment intention early, then trying to push an addendum later. That’s when sellers feel bamboozled and start wondering what else you’re hiding.
Q: Why should you avoid putting purchase contracts in your personal name?
A: Liability. If the seller insists the original buyer remains responsible for performance, you don’t want that in your personal name. You want that tied to your LLC.
Q: Is there another reason to keep the deal in an LLC besides liability?
A: Yes. Mark points out that if you’re making an assignment fee (like a $10K or $20K spread), you generally don’t want that revenue hitting your personal name either. He’d rather have it flow through the LLC first. They also emphasize they’re not giving tax advice, just sharing the lesson learned from early mistakes.
Q: What’s the most common “pushback” Chance sees from sellers on assignments?
A: Sellers being fine with the assignment, but requiring that the original buyer/assignor remains responsible if the deal falls apart. Chance says that’s fair and what he would do as a seller too.
Q: Why is transparency such a big deal with assignments?
A: Because the cover-up is worse than the “issue,” and assigning isn’t even an issue when done correctly. If you don’t disclose, you look like a jerk in front of the seller’s attorney and you damage trust fast.
Q: What’s a practical example of assigning for entity structure reasons?
A: Putting the deal under a general LLC first, then assigning it later to a property-specific LLC (like “123 Main Street LLC”) once it’s formed, investors are lined up, or the final ownership structure is ready.
Q: Has anything changed recently with LLC filing or costs in Illinois?
A: Chance says the structure is basically the same and still his preferred vehicle for owning real estate in Illinois. He also notes it’s cheaper than it was several years ago, and Mark and Tom discuss how the timeline is a blur, but the cost is meaningfully lower than before.
Q: If two partners need a brand-new LLC fast, is 14 days enough?
A: Yes. Chance says they can do an expedited filing and get the LLC formed in a couple of days if needed.
Q: If you’re buying with a partner, do you really need an operating agreement?
A: Yes. They stress that if and when something goes sideways, you want the rules clearly spelled out. Mark also admits early in his career he treated operating agreements like paperwork for the bank, and it eventually bit him in a partnership.
Q: Who sponsored the Chicago fact in this episode?
A: Chance the Lawyer. They also play for a listener and give away a $50 gift card.
Q: What was the Chicago fact question?
A: Name seven suburbs that start with the letter W. Mark and Tom go on a roll and keep going beyond seven.
Show Notes
00:00 Tuesday Tip kickoff with Tom, Mark, and Chance the Lawyer
00:14 Chance is officially “Chance the Lawyer LLC” now
01:14 What it means to assign a contract (and when it shows up in wholesaling)
02:11 Why you need approval to transfer a contract and where newer wholesalers get burned
03:15 Why the buyer should be your LLC (not your personal name)
04:14 Assigning into a property-specific LLC once it’s formed
04:49 Mark’s lesson: don’t take assignment revenue in your personal name
05:29 Seller pushback: allowing assignment but holding original buyer responsible
06:19 The real mistake: hiding the assignment and damaging trust
07:40 LLCs in Illinois, cost decreases, and what’s stayed the same
08:24 Expedited LLC filing in a couple days when you’re closing fast
08:45 Operating agreements matter, and Mark admits early mistakes
09:52 Chicago fact setup and Chance the Lawyer as sponsor
10:13 Seven suburbs starting with W (and they keep going)
12:07 Wrap and Build Your Team plug
Takeaways for Chicago Property Managers and Landlords
- Assigning contracts is normal in wholesaling, but it must be disclosed and approved.
- If you’re going to be held responsible for performance, keep that liability inside an LLC.
- Don’t wait until the end to “deal with it later.” That’s how you lose trust and deals.
- Property-specific LLCs are common, but you need a clean plan for assigning from your general entity.
- Operating agreements aren’t “bank paperwork.” They’re dispute prevention when life happens.
Guest Information
Guest:Chance Badertscher
Company: Chance The Lawyer
Guest Link:https://www.chanceblaw.com/
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