Clouded Title on LC - I want to refinance though

[Emilio Basa]

I purchased a multi family property in a very desirable location on LC. I have a lot of equity in the property and can sell it for 2x what I paid for it. I did have to rehab some of the property and I used credit cards to finance the repairs and materials. I contacted Visio Lending and they were going to refinance me out of the LC with a cash out refi. 

They worked very hard to make it happen only to find out that I don't own the property because the LC was not closed on LC. I'm still working with a great title company and the owner on obtaining clean title. We can have clean title upon closing, but now Visio is telling me they can only refinance the property after I purchase the property. They told me that they I can purchase the property with a loan via them and also refinance after 30 days with them as well. However they are charging me 2x because it is 2 loans (purchase and refinance) and also I need a sizable deposit to close the first loan! I decided to turn them down because I don't have the funds to obtain the first purchasing loan. 

Longgggggggggggg story short... I need some advice. I don't want to sell, but I'm considering it since I can use the profits to pay off all my debts and have enough money to purchase another property/properties. I really don't want to sell though, but how do I get the equity out? I was thinking about purchasing the property through a hard money lender, get clean title and pay interest only for a year. Then refinance out of the hard money loan. Any thoughts or advice would be greatly appreciated. 

[Ann Bellamy]

When you buy on a land contract, you don't own the property until you have paid off the entire property.  At that time, a deed is recorded giving you title.  At least, the ones I have understood have worked that way.  I am not an attorney, so this is not legal advice.

In addition, you should only listen to advice from people who know about Michigan laws and customs.  So my advice is pretty much just a guess, but here is what I am guessing:

1.  You can't refinance, because you don't own it to start with.

2.  You need to reach the point where you can qualify for conventional financing, and not refi the property, but buy it using conventional financing.  I'd worry about refinancing later.  And yes you have a purchase closing, because you never bought the property to start with.  And purchase financing does not provide cash back at closing.  So if you want cash out, you'll have to refinance later.  That's just part of what you signed up for without apparently knowing it when you bought it on a land contract.  That and a lot of additional risks to you that aren't mentioned in this post.

3.  Presumably, part of your contract with the "seller" was a down payment amount, or credit from each payment toward the purchase price.  What happened to that seller and to that money?  I think that may be important.

4.  A good real estate attorney in Michigan may be able to help you, that's where I'd go first.  If you can show a purchase contract with the seller with downpayment money already provided, that may get you part of the way to where you want to be.