Investor · Grand Rapids, MI · Member since 2021 · 49 posts · 21 votes
Hey guys, need help finding a lawyer.
I bought a few rentals a couple years ago in west Michigan, long story short, we've got to let go of one because we're over leveraged.
Our lender wrote a bad loan, we purchased the property for more than it's worth, now we aren't able to sell it properly without bringing a lot of cash to closing table — cash we don't have.
Found an investor who's willing to purchase the agreement sub-to. They just sent over the agreement and it's pretty scary/confusing.
I'm now looking for a real-estate lawyer in Michigan who can review this sub-to agreement and let us know if the agreement is sound.
Ryan, Drew's point is the big one — in a sub-to, the mortgage stays in YOUR name, so if the buyer stops paying, it's your credit on the line. A few things to have the lawyer pressure-test in that agreement:
1. Due-on-sale clause — the lender can technically call the loan if they discover the transfer. It rarely happens, but the agreement should acknowledge the risk.
2. Insurance — the policy needs to be restructured (usually the seller added as mortgagee/loss payee) so you're protected if something happens.
3. Default remedies — you want a clean, fast path to take the property back if they miss payments. Vague default language is a red flag.
Also worth asking the lawyer about a wrap/land contract vs. straight sub-to, and whether a loan modification or forbearance with your current lender could buy you time to sell at a better price. A documented workout attempt also strengthens your position if you end up going the short sale route. Tough spot, but you're asking the right questions before signing — most people do it the other way around.