Subject Two Financing Info

[Greg Branam]

Once a deal has been closed with subject two financing what options do you have down the road?

Are you able to refinance that property to pull equity for other investment properties?

Can you sell the property while sitting in second position or do you just have to keep it as a rental until the note is paid in full? 

Any info is appreciated. 

Thanks 

[Kevin Sobilo]

@Greg Branam, I have not done a Subject-To deal myself but have read a bit about them. What do you mean "while sitting in second position".

My understanding is that they deed the property to you and also basically give you limited power of attorney to deal with the mortgage etc. So, that the lender can talk to you and you can continue to make payments etc. So, YOU own the property and the existing financing stays in place in the seller's name.

So, yes you can refinance (in your own name) and pay off the existing mortgage anytime. You can also sell the property any time because you are the deeded owner, but of course the mortgage will need to be paid off at closing for clear title to transfer just like any other deal.

That is my understanding, but again I have never done a deal like this.