Detroit Land Contract Offer from Buyer

[Peter O.]

Would be very interesting to know if anyone in Detroit is doing land contract. I am an investor in Detroit

and I currently have a buyer offering $20k down and $1200 per month on a land contract for one of my properties. Not fully sold on this deal yet but it is appealing for sure.

[Drew Sygit]

@Peter O. - mostly all good advice so far:)

Other considerations:

1) How do you take back your property if they stop paying LC? In Michigan you have to basically foreclose on the buyer. This process can take 3-6 months and then the buyer has 6 or 12 months to redeem the property, depending on how long they've been in the property, how much equity they have and a few other factors. That's why it's best to get a large down payment.

2) Make sure you record the LC at the county. If you don't, it may make the foreclosure process more difficult. You'll also have issues with the city holding you liable for city inspections.

3) Make sure your contract clearly states who is responsible for repairs, property taxes and insurance. You will want to be added as an additionally insured to their insurance (so their LC balance with gets paid), so you will be alerted if they allow it to lapse or remove you.

4) No one mentioned the risks of doing an LC on an owner-occupied property due to Dodd-Frank legislation. I'm guessing everyone else commenting here ignores it, but you should understand the risk before you jump in.

4)