Wholesaling Houses With Liens in Michigan

The short answer

Can you wholesale a house with liens in Michigan?

Yes, in most cases you can assign a contract on a house with liens, as long as the closing pays the liens or the buyer knowingly takes the property subject to them. A title company should confirm every lien before you promise a number to the seller.

Start with what is actually recorded. Pull the county records and order a title search so you see every lien by type and date. Our title search guide shows the steps, and our judgment lien guide and mechanic’s lien guide explain two of the most common kinds. Each lien has its own payoff figure, so ask each holder for a written statement.

Your profit lives in the gap between the sale price and the total of the liens. If the debts eat the whole price, there is nothing for the seller or for you. Run the numbers early with the MAO calculator, and remember that a buyer will deduct what it costs to clear everything before closing.

The opportunity

Why lien deals appear in Macomb County

Macomb County has a large base of mid-century homes where owners stayed for decades. Roof, furnace and basement jobs were often paid on credit, and not every bill got paid. Divorces and job losses at suppliers tied to the auto industry added unpaid judgments. When a seller knows a lien is holding them back, an offer that includes a plan to pay it off feels like relief. Many owners in Warren simply never learned that a title company can pay liens straight from the sale price.

Lead sources

Where to find houses with liens in Warren

• County records. Macomb County recorded documents show liens, judgments and notices of lien by property.
• Tax lists. Delinquent tax rolls point to owners who may also carry other debts. See our tax delinquent list guide.
• Code violations. Unpaid city fines can lead to bigger problems. Read our code violation guide.
• Contractors. Roofers and remodelers sometimes know which clients never paid.
• Direct mail. Short letters to owners with recorded liens can open talks. See direct mail for wholesalers.

Your exit

Who buys houses with liens in Michigan

Rehabbers and landlords with cash are the usual buyers. They want a clean title at closing, so tell them up front which liens exist and how each will be paid. A buyer who trusts your list is more likely to close fast.

Pair your buyer with an investor-friendly title company that will collect payoff letters and prepare the closing statement. Our title insurance guide explains why the buyer will want a policy.

Step by step

How to start wholesaling houses with liens in Michigan

1. Find the liens. Search county records and confirm with a title company.
2. Rank them. List each lien by type, date and amount so you see the order of payment.
3. Ask for payoffs. Request written figures; see our payoff statement guide.
4. Check the equity. Compare the ARV with liens and repairs using the ARV calculator.
5. Sign and disclose. Sign a contract that says you may assign, per our assignment guide.
6. Line up the buyer. Share the lien list so the buyer knows the plan.
7. Close through title. Let the closing agent pay liens from the proceeds and record releases.

A Warren owner in his seventies had a tidy brick ranch near Van Dyke. A roofing company had recorded a lien after a dispute, and a credit card judgment sat behind it. He believed he could not sell until he paid both from savings he did not have.

You contracted at $118,000 and told him the title company would pay both from the sale. The payoff letters came back at $7,400 and $3,100, plus a mortgage of about $61,000. Your contract said you might assign it.

A rehabber bought the contract for a $9,000 fee and closed in three weeks. The seller walked away with roughly $37,500 and no bills.

Michigan rules to know

Michigan lien rules to know first

Michigan has no wholesaler license that we found, but the broker definition in the Occupational Code can reach people who buy and sell real estate as a principal vocation. Treat that as a reason to talk with an attorney or LARA before doing many deals. Condo and association assessments can become a lien that ranks ahead of a later first mortgage when a notice was recorded, and assessments that come due before a foreclosure redemption period ends can follow the buyer.

Delinquent property taxes are different. Property that stays delinquent for a year or more can be forfeited to the county treasurer, and later foreclosed, so check the status before you promise a seller anything. Contractor liens follow the Construction Lien Act, with notice and recording deadlines that you should verify. See our attorney guide.

Learn it with a mentor

Learn to read a lien report

Lien files can look scary until you have seen a few. Mentorship students bring us title reports, and we walk through the order of payment line by line.

FAQ

Houses With Liens in Michigan: common questions

Keep going

More Michigan wholesaling guides

Read the full Michigan wholesaling guide or pick another situation below.

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