Wholesaling Seller-Financed Deals in Michigan

The short answer

Can you wholesale a seller-financed deal in Michigan?

Yes, a contract with seller financing can be assigned when the seller is told up front that assignment may happen and the terms are spelled out in writing. Have a Michigan attorney or title company draft the financing paperwork.

Here the seller plays lender. Instead of one lump of cash, the buyer sends monthly payments backed by a note and mortgage, or by a Michigan land contract. Whatever the contract with the seller fixes (price, money down, interest, length) is what your end buyer inherits. Background reading: the seller financing guide and the contract guide.

Which document you pick changes the outcome. Under a land contract the seller typically holds legal title until payoff; the contract for deed guide walks through it. Rate limits and consumer-lending rules may also come into play, most of all for an owner-occupant, so run your proposed terms past counsel first.

The opportunity

Why wholesaling seller-financed deals in Michigan works

Across Sterling Heights and nearby Macomb County towns, plenty of long-tenured owners hold homes free of any big loan. A few crave a dependable check without landlord duties, while others hope to stretch a tax bill across years. Meanwhile, buyers turned down by banks tend to pay a premium for terms within reach. Put a plain payment schedule in front of the owner, then weigh it against a cash sale using the seller net sheet.

Lead sources

Where to find seller-financed leads in Michigan

• Free-and-clear owners. Look in county records for homes lacking a recorded mortgage.
• Long-term owners. People who purchased decades back frequently carry substantial equity and little debt.
• Tired landlords. Some prefer note income to repairs. Try the absentee owner guide.
• For-sale-by-owner ads. Watch for listings where the owner mentions openness to carrying the loan.
• Estate sales. Heirs may like steady income. See probate leads.

Your exit

Who buys seller-financed deals in Michigan

Typical takers are landlords who struggle to borrow and buyers holding little cash for a down payment. For them, terms count as much as price, so state the rate, length and any balloon plainly. Balloon payments explains how a large final payment works.

Expect the seller to ask what occurs when a payment is late. Hiring an outside servicer to collect money and issue statements gives both parties a clean record, and that record matters if the seller later wants to cash out the note. Our note investing guide covers selling it.

Step by step

How to start wholesaling seller-financed deals in Michigan

1. Learn the seller’s goals. Find out how much monthly income, upfront cash and what timeline they want.
2. Set the terms. Negotiate the price, money down, interest rate, payoff length and whether a balloon applies.
3. Pick the structure. Choose between a note and mortgage or a land contract with your attorney.
4. Run the numbers. Use the ARV calculator and the MAO calculator.
5. Sign and disclose. Execute the contract and tell the seller in it that assignment is possible.
6. Prepare the documents. Have a lawyer or title company draft them.
7. Close and service. Use an investor-friendly title company for closing, then arrange servicing.

Picture a retired machinist in Sterling Heights with a colonial he owned outright. Selling for cash meant one big taxable gain in a single year, and he preferred a steady paycheck to a lump sum.

The price came to $230,000, with $25,000 down and the seller carrying the rest. A Michigan attorney drew up the paperwork, and you put in writing, for him, that assignment was possible.

The end buyer, a landlord, paid a $12,000 assignment fee and stepped into the deal. Each month a servicer now passes roughly $1,450 to the owner.

Michigan rules to know

Michigan rules for seller-financed deals

Land contracts and mortgages are handled differently in Michigan. Certain land contract transfers, in which legal title waits until the price is fully paid, are exempt from state transfer tax, whereas an ordinary deed generally is not. Our transfer tax guide goes further; verify the current rules with the title company.

A buyer who plans to occupy the property can trigger federal and state lending rules for the seller. Some exemptions exist, though each carries conditions, so get a Michigan attorney’s view before terms are offered; our attorney guide helps you prepare. Your options after a default hinge on the paperwork chosen, which is why that choice comes first. Settle too who covers taxes and insurance, and how the seller will see proof they are paid. Unpaid taxes may become a lien ranking ahead of the seller, so have the servicer watch them.

Learn it with a mentor

Structure terms that work

The details decide whether these deals work. Students in our mentorship share term sheets with us, and together we shape structures that keep every party protected.

FAQ

Seller-Financed Deals 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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