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!

[Bill F.]

@Bryan Satter What kind of banks are you speaking with? BoA, Wells Fargo and the like or smaller regional/local banks? Also who you are speaking to makes a difference.

Going of what you have said it sounds like you haven't talked to enough banks to find the right one. 

Have you tried going to your local REIA and asking around there? I know my REIA has one mortgage broker who is there regularly and if he can't source your loan he knows which banks in the area are looking to make that kind of loan.

Also check out BP Podcast #55:

https://www.biggerpockets.com/renewsblog/2014/01/3...

This talks about how to build your baker's book, what underwriters look at, and a bunch of other great stuff. 

Good Luck.