Loan Amount: $700,000

Loan Term: 12 Months

CLTV: 35%

Loan Position: First Position Deed of Trust

Construction Loan Success: How Rubicon Mortgage Fund LLC Helped a Repeat Borrower Navigate Complexities in California

Today, we’re sharing the story of a repeat borrower who sought additional construction funds for a project already underway. This scenario might seem straightforward, but it brought with it some unique challenges and opportunities that highlight the importance of strategic thinking in hard money lending.

The Collateral: Unique and Valuable Properties

The primary collateral for this loan was a lot that included an used auto dealership. Another property used for a residential duplex. The diverse mix of properties added an interesting twist to the project and provided solid value. Unique neighbors, indeed!

In addition to this lot, we also had a cross-collateralized piece of land. This ‘vacant-ish’ land, as we affectionately call it, is not truly vacant. It is large and in the process of being subdivided and sold. The proceeds from this sale are earmarked to pay off our loan, adding another layer of security to our investment.

The Strategy: Leveraging Cross Collateral

Cross collateralization is a strategic tool in the world of hard money lending. By using the vacant land as additional security, we were able to structure a deal that met the borrower’s needs while protecting our interests. The sale of a portion of this land will directly fund the repayment of our loan (exit strategy), ensuring that we are covered even if the primary construction project faces delays or issues.

The Outcome: Construction on Solid Ground

It’s important to clarify that the construction project is happening on half of the land that the owner intends to keep. This strategic decision allows the borrower to continue developing their property while ensuring that the sale of the other parcel provides the necessary funds to pay off the loan. By focusing on the land, they plan to retain, the borrower can maximize the value and utility of their property without overextending their resources.

Why Choose Rubicon Mortgage Fund LLC for Your Construction Loan in CA?

Navigating the complexities of construction loans in CA requires experience, expertise, and a willingness to look beyond the surface. At Rubicon Mortgage Fund LLC, we bring all these qualities to the table. Our team understands the local market, the nuances of construction projects, and the importance of flexible, creative financing solutions.

Whether you’re a repeat borrower or considering a hard money loan for the first time, we are here to help you achieve your goals. We assess each project on its own merits, considering the unique challenges and opportunities it presents. Our goal is to provide the funds you need while ensuring that both parties are protected and poised for success.

Conclusion

In the world of hard money lending, each project is a puzzle waiting to be solved. The story of our repeat borrower underscores the importance of leveraging cross collateral, and strategically planning construction projects. At Rubicon Mortgage Fund LLC, we are committed to helping our clients navigate these complexities with confidence and clarity.

If you’re looking for a construction loan in CA, consider partnering with Rubicon Mortgage Fund LLC. Our experience, expertise, and personalized approach make us the ideal choice for your financing needs. Contact us today to learn more about how we can help you turn your construction dreams into reality.