$700,000 Cash Out in Manteca, CA
How Cash-out Refinance Helped an Investor Unlock Equity for a New Development Project
Loan Amount: $700,000
Loan Term: 12 Months
LTV: Under 60%
Lien Position: 1st Deed of Trust
Real estate investors often have substantial equity tied up in their properties but accessing that working capital is not always straightforward.
Traditional lenders generally prefer stabilized assets with rental income, owner occupancy, or a clearly defined use. When a property is vacant, recently renovated, or entitled land, financing options can become limited.
That was the situation facing an experienced California real estate investor who needed working capital to move another development project forward.
Rather than viewing each property individually, Rubicon Mortgage Fund, LLC took a broader look at the investor’s portfolio and structured a solution that unlocked the equity he had already built.
The Challenge: Plenty of Equity, Limited Financing Options
The borrower owned two properties free and clear: a 6.5-acre parcel of land and a recently renovated non-owner-occupied single-family residence. While both assets had substantial equity, neither property fit neatly into a conventional lender’s box.
The entitled land generated no income, and the home had recently been renovated but was not owner-occupied or rented. At the same time, the borrower needed working capital to cover entitlement costs, permitting fees, and other soft costs associated with a separate development project already in motion.
Rather than evaluating each property independently, Rubicon Mortgage Fund, LLC looked at the borrower’s overall portfolio and identified an opportunity to structure a more effective financing solution.
Looking Beyond a Single Property
Initially, the borrower sought financing against one property. After reviewing the request, Rubicon explored a different approach.
By cross-collateralizing the 6.5-acre land parcel and the recently renovated single-family residence, Rubicon was able to provide a larger loan amount while maintaining a conservative loan structure.
This flexible loan structure allowed the borrower to unlock equity tied up in his real estate holdings and deploy capital toward another project without selling assets or bringing in outside partners.
Why Flexibility Matters in a Cash-out Refinance
Many investors do not realize that multiple properties can sometimes be pledged together to create a financing solution.
Traditional lenders often evaluate assets independently, which can limit available loan proceeds.
Private lenders have greater flexibility to consider the complete picture.
In this case, the borrower had substantial equity, a strong track record, and a clear use for the funds. By taking a portfolio-level view of the collateral, Rubicon was able to structure a loan that met the borrower’s objectives while maintaining a conservative risk profile.
The Exit Strategy
The borrower has multiple paths to repayment.
The renovated home may ultimately be sold, potentially generating a significant profit based on recent comparable sales in the area.
The borrower also owns the land free and clear and continues to evaluate future development opportunities for the site.
With flexibility built into the business plan and substantial equity supporting the loan, the borrower was able to access capital without disrupting his broader investment strategy.
Frequently Asked Questions about Cash-out Refinance
What is a cross-collateralized loan?
A cross-collateralized loan uses multiple properties as collateral for a single loan. This approach can help borrowers access additional proceeds when one property alone does not support the desired loan amount.
What is a land equity loan?
A land equity loan allows a property owner to borrow against the value of owned land. Funds are commonly used for development costs, business purposes, or new real estate investments.
Why would an investor cross-collateralize properties?
Cross-collateralization can increase borrowing capacity, improve loan structure, and allow investors to unlock equity across multiple assets rather than relying on a single property.
Need financing for a development project, land acquisition, or cash-out refinance?
Rubicon Mortgage Fund, LLC specializes in flexible asset-based lending solutions for experienced real estate investors throughout California.
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