So I did a subject too... Now what?

Question

Totally confused about Subject Too loans and my options.

My company paid for the title xfer to put a home in my companies name, but bank still thinks previous owner is on title.  She was going to foreclose and let it go back to bank before I stepped in.  I caught her up and now make the payments to her bank on her behalf.  So... Title is in my companies name.  Her bank is unaware and could call note due at any time if they found out, but probably wouldn't b/c her interest rate is pretty high and higher than mine would be.

Now that I have rehabbed it to the 9's it has me thinking I might want to sell my current home and live in the one I bought subject too and just finished.

How do I do this?

Can I buy a home that is owned by my business?

I would need a new note so the previous owners note would be paid off and she would be free and clear.

The note is only $177k and the appraised value now that I fixed everything will be about $340k.

If I move into it, can I get my equity out?

Will they lend me what it appraises for (less down pmt)?  If so will all that left over equity go straight into my business bank account?

I'm confused?  Any help is much appreciated!

Thanks,

Greg

Jay Hinrichs · Answer

@Greg Horn  Greg please take no offense but you really need to bone up on this stuff

YOu own the house.. you bought it sub too.

if you want to owner occ it.. do as @Rocky V. suggested simply deed it to yourself and refinance it.. you could probably ( as long as you qualify) get an 80% LTV loan with no pmi.. and there ya go.

Although be careful just deeding it to your self talk to lender or Title company you could have issues with title insurance.. also when you got the deed on the sub too did you get title insurance on that transaction.. many title companies will not insure over hand written deeds.

Frankly this is really basic stuff.. I have to think you know this is you were smart enough to do a sub to in the first place.. :)

good deal it sounds like though  not knowing what you put in it..

Greg Horn · Answer

thanks for the replies guys.  This is my second home to flip and a subject too let me just continue making her payment.  I took out a hard money loan on first house and that interest is stupid.  With this one I thought and was told that would be a good way around having to take out a full loan and use my own money to fix the place up.

So yeah.... Bonehead move on my part for sure seeing as I didn't have a clear understanding of how it all works.  Gonna call some real estate attorneys tomorrow so I don't mess this up more than I have.

Bill P. · Answer

@Greg Horn

While the DOSC doesn't get processed many times, it does get processed more from people that don't know what they're doing. The usual culprit is the notification from the insurance company. How did you take care of that? Doing the creative stuff takes a certain amount of experience or you can really make  gigantic mistake. I couldn't agree with @Jay Hinrichs more.

Steve Vaughan · Answer

What type of deed was used to transfer ownership from the behind on their mortgage seller to your company?  Quitclaim deed? Warranty deed?  Special Warranty?  Bargain and Sale?

As an officer/principle of your company who now owns the house, you should be able to execute a deed to whomever you wish.  By having the title but not the deed it sounds like you have a trailer or car or boat or something. Those have titles.  Are you saying you don't own the house you fixed up @Greg Horn?

Greg Horn · Answer

I don't have the deed... Just the title

Rocky V. · Answer

Pretty simple.  1st thing is deed the property from your company to yourself which will cost about $20.  Now refi but you may have to wait for seasoning requirements so make sure you talk to your lender first.

Greg Horn · Answer

everyone I ask says I can't buy a home my company owns because I own the company and something about arms length and such?

Clay Smith · Answer

I am pretty sure you can buy this as an FHA even.  There are no restriction on buying from yourself.  Just call Wells Fargo. If they will do it, anyone else will.

So I did a subject too... Now what?

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