Michigan’s Equitable Conversion Doctrine
Is Marketing Your Own Wholesale Contracts “Equitable Interest” Legal in Michigan? Courts say — “Yes”
Court Rulings
- With a List of Case Law That Supports Wholesale Investing & Marketing your Contractual Interest without a license.
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Marketing Your Wholesale Contracts is Legal.
Marketing your wholesale contract’s equitable interest in Michigan is completely legal, backed by the equitable conversion doctrine and a heavy-hitting lineup of court cases and rulings like:
- Craig v. Bossenbery
- Cameron v. Shumway
- McCreary v. Shields, Feldman v.
- M J Associates, Babcock v. Young
- Walker v. Caswell, In re Estate of Krapp
- Sloman v. Cutler.
As a wholesale & real estate investor, I’m here to dive into whether you can legally market your own wholesale contracts — specifically, your equitable interest in a property — on social media or directly to investors in Michigan.
I’ll clarify if this makes you look like a broker, unpack Michigan’s equitable conversion doctrine supported by a list of case law that legalizes wholesaling real estate without a license.
We will also tackle the “5 property per year as a homeowner” law, explaining what it is, how assignment method bypasses it, while a double-close might push you toward needing a broker’s license.
Wholesaling real estate means you’ve locked up a property with a purchase agreement (say, a distressed ranch in Lansing for $50,000), and you’re marketing your “right to purchase” (your equitable interest) — to another investor for an assignment fee (like $55,000).
This assigns you a $5,000 profit or fee. This is not a real estate sale, rather it is a contract sale, an assignment of your position in a contract. You’re not selling the house it if, just your contract rights.
Michigan’s equitable conversion doctrine, backed by a robust stack of case law, makes this legit, and I’ll also cover how the state’s “5 property per year” law fits in, plus the licensing risks with double-closing.
It really is all about comprehending legal language and what words actually mean in the court of law, not what people “Think” they mean.
The Basics of a Legal Deal
When you market your contract yourself, you’re offering to assign your equitable interest, and that deal needs to stand up under Michigan law:
- Offer and Acceptance: You pitch your contract, and an investor bites.
- Consideration: They pay your assignment fee, closing, and liens (most of the time and if any.)
- Mutual Consent: Seller and Buyer, Both of you are clear on the terms, no shady stuff.
- Capacity to Understand: You’re a competent adult, not signing, agreements, deals or contracts after a wild night at the Detroit Jazz Fest or Michigan’s UP State Fair.
- Lawful Purpose: Your marketing can’t violate laws, like advertising a property you don’t control, This is brokering. Contract First, Always.
If your marketing nails these, you’re off to a great start.
But with Michigan’s real estate landscape, its equitable conversion doctrine and other rulings or statutes, shapes how you can legally market and sell your contract to an end buyer.
Note: Your Purchase and Sales Agreement must have an “assignment clause” to wholesale to an investor.
Michigan’s Equitable Conversion Doctrine: Your Contract as a Marketable Commodity
Michigan’s equitable conversion doctrine is the legal powerhouse that makes your wholesale contract a marketable commodity — something you can sell like a hot ticket to a Red Wings game.
Once you sign a purchase agreement, you gain an “equitable interest” and an “Equitable Title” in the property, even though the seller holds “legal title” until closing.
Upon COE, this transfers over to the new owner as a “Legal Title to Property.” This equitable interest is a transferable asset, and a deep bench of Michigan case law confirms you can market it without a real estate license.
What’s Equitable Conversion?
Equitable conversion treats you as the “equitable owner” once you’ve got a binding purchase agreement.
The seller holds legal title in trust for you, while you hold equitable title — the right to benefit from and eventually own the property if you meet the contract’s terms (like paying the price).
In wholesaling, you’re marketing this equitable interest by assigning your contract to another buyer who steps into your shoes.
Key Michigan Case Law Supporting Wholesaling Without a License:
Michigan courts have consistently upheld that equitable interest under a purchase agreement is a marketable asset.
You can sell or assign this interest without acting as a broker or getting a real estate license.
Here’s a beefy list of cases that back wholesale investing in Michigan:
- Craig v. Bossenbery (1903): The Michigan Supreme Court ruled that a buyer under a purchase agreement gains equitable title, making them the equitable owner while the seller holds legal title as security.
This case is a cornerstone for wholesaling — it explicitly supports your right to market and assign that equitable title to another investor without a license, as you’re dealing with your own interest, not brokering for others.
- Cameron v. Shumway (1907): This case reinforced that equitable conversion kicks in when a contract is signed, giving the buyer a transferable interest distinct from legal title.
The court’s recognition that this interest can be sold aligns perfectly with wholesaling’s assignment model — no broker’s license required since you’re not acting for a third party.
- McCreary v. Shields (1952): In a property dispute, the court emphasized that equitable title gives the contract holder (like a wholesaler) enforceable rights that courts will protect.
This supports your ability to market your equitable interest as a commodity without needing a license, as you’re handling your own asset, not facilitating a sale for someone else.
- Feldman v. M J Associates (1982): Focused on land contracts, this case confirmed that a buyer’s equitable rights are protectable and transferable.
The court’s reasoning applies to wholesaling, showing you can assign your contract’s equitable interest without crossing into brokerage, as you’re not representing others in the deal.
- Babcock v. Young (1908): This lesser-known gem dealt with a real estate contract dispute and clarified that a purchaser’s equitable interest under a contract is a distinct, enforceable property right.
The Michigan Supreme Court noted that this interest can be assigned, providing early precedent for wholesaling’s legality without a license, as it’s a transaction of your own rights.
- Walker v. Caswell (1910): In this case, the court upheld the rights of a contract purchaser to deal with their equitable interest, even in a foreclosure context.
The ruling supports wholesaling by showing that equitable title is a recognized asset you can market or transfer, reinforcing that no broker’s license is needed when you’re selling your own contract interest.
- In re Estate of Krapp (1928): This probate case touched on equitable conversion, affirming that a buyer’s interest in a real estate contract is a personal property right that can be assigned.
The court’s logic bolsters wholesaling, as it treats your contract as a marketable commodity separate from the real estate itself, keeping you clear of brokerage regulations.
- Sloman v. Cutler (1932): While addressing a vendor-vendee relationship, this case reiterated that equitable conversion creates a transferable interest for the buyer.
The Michigan Supreme Court’s stance supports wholesalers marketing their contracts, as it’s a sale of their own equitable rights, not a brokered transaction requiring a license.
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Why Does This Matters for Wholesaling Real Estate in Michigan?
These cases — Craig, Cameron, McCreary, Feldman, Babcock, Walker, Krapp, and Sloman — build a rock-solid foundation that your equitable interest is a real, sellable asset under Michigan law.
Equitable conversion transforms your purchase agreement into a commodity you can market, like selling your stake in a business deal.
When you post on social media or pitch an investor, you’re offering to transfer that equitable title, which this deep case law roster has upheld for over a century.
None of these cases suggest you need a broker’s license to assign your own contract interest, as you’re not acting “for others” or listing properties you don’t control. This could be your rights to purchase giving you an equitable title.
Michigan’s “5 Property Per Year as a Homeowner” Law and How Assignment Bypasses It
Michigan’s “5 property per year as a homeowner” law is a statute that can trip up investors if they don’t pay attention to legal language an activity.
What’s the 5 Property Rule?
Under Michigan’s Occupational Code (MCL 339.2503(2)), homeowners can wholesale or sell up to 5 of their own properties per year without needing a real estate broker’s license. “Their own properties” means properties where you hold legal title — like a deed in your name, they can.
However, if a homeowner engages in a 6th real estate sale in a 12-month period, they may need to get licensed, as it could be seen as brokering — acting as a business dealing in real estate sales for profit.
This risk is especially high if you’re double-closing, because each double-close involves taking legal title, counting as a “sale” under the statute.
Example: If you buy and flip 5 houses you own (with legal title) in a year, you’re covered by MCL 339.2503(2). But a 6th sale — like buying a house in Warren, titling it, and flipping it — could draw scrutiny from the Department of Licensing and Regulatory Affairs (LARA).
They might argue you’re running a real estate business, particularly if you’re double-closing and marketing aggressively to buyers, which mimics brokering.
Why Wholesaling via Assignment Bypasses This
- When you wholesale via assignment, you’re not selling a property you own with legal title — you’re selling your equitable interest in a purchase agreement.
- You never take legal title, so the transaction doesn’t count as a “real estate sale” under MCL 339.2503(2)’s 5-property limit.
- Equitable conversion (per Craig v. Bossenbery, Babcock v. Young, and others) gives you a marketable interest, but it’s distinct from owning the property outright.
- You’re transferring your contract rights, not deeding a house, so the homeowner exemption doesn’t apply — you’re free to assign as many contracts as you can secure.
Example: You lock up 20 properties in Grand Rapids with purchase agreements and assign all 20 contracts to investors for fees. Since you never held legal title, none of these sales count toward the 5-property limit. You’re wholesaling equitable interests, not selling “your own properties,” so MCL 339.2503(2) is irrelevant.
Cases like Cameron v. Shumway and In re Estate of Krapp, reinforce that your contract interest is a personal property right, not a real estate sale, keeping you clear of licensing requirements.
Why Double-Closing Might Require a Broker’s License
While assignment keeps you clear of the 5-property rule, double-closing — where you buy the property, take legal title, and immediately resell it — brings you under MCL 339.2503(2) and raises licensing risks if you go overboard.
How Double-Closing Works
In a double-close, you close with the seller (say, buying a house in Flint for $60,000), take legal title, and then close a second sale with your investor buyer (selling for $65,000).
If you own the property, even for a moment, each double-close can count as a “real estate sale” and toward the 5-property-per-year limit.
When It Triggers Licensing Concerns
- If you double-close more than 5 properties in a 12-month period, you exceed the homeowner exemption in MCL 339.2503(2).
- Michigan’s Occupational Code (MCL 339.2501) defines brokerage as selling or negotiating real estate deals for others, to obtain a fee, and frequent double-closing — especially with heavy marketing to a buyer network — can fit that bill.
- The more you act like a middleman facilitating sales (even with your own title), the more LARA might see you as brokering.
LARA could argue you’re engaging in brokerage without a license, as you’re repeatedly buying and selling properties with legal title, not equitable titles or interests, which starts to look like a real estate business.
Why The Assignment is Safer:
Assignments of contracts deals with one's own equitable and self interest, & Equitable Titles, not the legal title, so they don’t count toward the 5-property limit or raise brokerage concerns because it’s not a “real estate sale.”
Case law like Walker v. Caswell supports transferring your own interests to an end buyer but double-closing blurs into brokerage territory.
Sloman v. Cutler (1932) adds weight, as it treats equitable interests as distinct from real estate sales, favoring assignments over double-closes for staying license-free.
Your Legal Disclosures!
When wholesaling real estate, a hand full of disclosures are needed to be in the green. Think of Seller Protection, Buyer Protections, Transparency and Intent.
- Standard Licensing Agency Disclosure:
This disclosure is to be transparent if you’re an agent or not.
- Intent Disclosure:
This disclosure describes who you are and your intent.
- Equity Release Disclosure:
This disclosure notifies the seller that they agree to willingly release any equity in their property under contract.
- A Marketing Disclosure via Michigan’s Doctrine of Equitable Conversion
- An “E-signature Disclosure” if you virtually wholesale or send Electronic Contracts that is legally binding.
What is a Broker?
Under MCL 339.2501, a broker is someone who, for a fee:
- Sells, buys, or negotiates deals for others.
- Markets properties they don’t own or control.
- Acts as an agent connecting parties.
Wholesaling is about selling your equitable interest (per Craig v. Bossenbery, Babcock v. Young), not working for anyone else. Assignments keep you clear, the KEY word here is “FOR OTHERS.”
Your own personal self interests is not working for others.
Double-Closing and Broker Risks
Double-closing shifts the legal dynamic:
- Counting Toward the Limit: Each double-close (taking legal title) counts as a “real estate sale” under MCL 339.2503(2). Over 5 per year, and you’re outside the exemption.
- Brokerage Risk: Frequent double-closing — say, 8 in a year — looks like a real estate business, especially if you’re marketing to buyers before closing. LARA could tag you as a broker under MCL 339.2501, as you’re handling sales with legal title in a brokerage-like way.
- Example: You double-close 6 properties in 2025. The 6th exceeds MCL 339.2503(2), and if you’re advertising like “Houses for sale!” LARA might see brokerage, especially in markets like Grand Rapids.
- Case Law: Benedek v. Mechanical Products, Inc. (1946) says selling your own property isn’t brokerage, but over 5 sales loses MCL 339.2503(2)’s protection.
- Jackson Iron Co. v. Negaunee Concentrating Co. (1895) supports dealing with your own interests, but habitual double-closing risks scrutiny.
- Babcock v. Young and Krapp lean toward the assignment method as a safer strategy, and courts treating contract interests as a distinct difference from traditional real estate sales.
Our Thoughts at The Real Estate HUB
Marketing your wholesale contract’s equitable interest in Michigan is completely legal, backed by the equitable conversion doctrine and a heavy-hitting lineup of court cases and rulings like:
- Craig v. Bossenbery
- Cameron v. Shumway
- McCreary v. Shields, Feldman v.
- M J Associates, Babcock v. Young
- Walker v. Caswell, In re Estate of Krapp
- Sloman v. Cutler.
These case laws confirm your contract as a marketable commodity you can assign without a broker’s license, as you’re selling your own equitable interest, not acting for others legalizing the wholesale investment strategy.
The “5 property per year as a homeowner” law (MCL 339.2503(2)) lets you sell up to 5 owned properties, but assignments bypass it since you’re not selling legal title — letting you wholesale unlimited contracts.
Double-closing counts toward that limit, and going over 5 per year risks LARA viewing you as a broker, especially with aggressive marketing.
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