Trouble in Philadelphia

[Bryan Satter]

Here is a sticky situation - happy to hear any suggestions!

I purchased a multi family in Philadelphia. Along with a partner we bought in the name of an LLC. Borrowed some private money (family, friends, etc). After making improvements, now looking for a cashback refi.

Any bank I ask will not lend if title is held in an LLC. They require me to change title to my individual name. Except Philly charges a 4% transfer tax to do that. So that option means out $6500 and also lose value of holding in an LLC. Then to get property back in LLC, that is another 4% transfer, now at a higher appraised value, so probably another $10,000.

Option 2 is to just accept a commercial loan from a private lender - charge about 9% on a 25 year loan. 

It is like I am being penalized for protecting myself in the LLC with the initial purchase.

Anyone have any experience with not being able to get a loan through an LLC (or a much higher interest loan!) or dealing with Philadelphia and its' transfer tax??

Thanks!