Loan Amount: $725,000

Loan Term: 12 Months

LTV: 60%

Loan Position: First Position Deed of Trust

Mastering the Reverse 1031 Exchange: Rubicon Mortgage Fund’s Expertise in Action

In the dynamic world of real estate investing, investors are always on the lookout for strategies to maximize their returns and minimize tax liabilities. One such powerful tool is the reverse 1031 exchange. At Rubicon Mortgage Fund, we specialize in facilitating these complex transactions, helping our clients achieve their investment goals with ease and efficiency.

Understanding the Reverse 1031 Exchange
A reverse 1031 exchange allows investors to acquire a replacement property before selling their relinquished property. This strategy is particularly useful in competitive markets where desirable properties may not be available when the investor is ready to sell their current property.

Case Study: South Lake Tahoe Investment Property
Recently, Rubicon Mortgage Fund had the opportunity to demonstrate our expertise in reverse 1031 exchanges by assisting a client in acquiring a non-owner-occupied single-family home in South Lake Tahoe.

The Scenario:

• The clients owned a rental condo in Martinez, California.
• They identified a remodeled single-family home in South Lake Tahoe as their desired replacement property.
• The clients wanted to expand their investment portfolio into the lucrative South Lake Tahoe market.

Rubicon’s Solution:

1. We provided 80% of the purchase price for the South Lake Tahoe property.
2. This high loan-to-value ratio was possible due to the substantial equity in the clients’ Martinez condo.
3. Our team expertly navigated the complexities of the reverse 1031 exchange process.

Why Choose Rubicon for Your Reverse 1031 Exchange?

1. Extensive Experience: With numerous 1031 exchanges under our belt, we understand the intricacies and potential pitfalls of these transactions.
2. Expertise in Handling Complexity: We’re well-versed in managing the multiple moving parts involved in reverse 1031 exchanges.
3. Short-Term Lending Specialists: Unlike traditional lenders who may shy away from the short-term nature of these loans (typically 6 months), Rubicon excels in executing these deals efficiently.
4. High Loan-to-Value Ratios: When appropriate, we can offer higher LTV ratios, giving our clients more flexibility in their investments.
5. Quick Execution: Our experience allows us to move swiftly, ensuring you don’t miss out on prime investment opportunities.

Navigating the Reverse 1031 Exchange Process

While this can be complex, Rubicon Mortgage Fund simplifies the process for our clients:

1. Property Identification: We assist in evaluating potential replacement properties.
2. Financing: Our team quickly assesses your financial situation and provides competitive lending terms.
3. Exchange Coordination: We work closely with qualified intermediaries to ensure all IRS requirements are met.
4. Timely Execution: We understand the time-sensitive nature of these transactions and work diligently to meet all deadlines.

Conclusion
At Rubicon Mortgage Fund, we pride ourselves on our ability to facilitate complex real estate transactions like reverse 1031 exchanges. Our deep understanding of the process, coupled with our flexible lending options, makes us the ideal partner for investors looking to optimize their real estate portfolios.

Whether you’re eyeing a property in South Lake Tahoe or anywhere else in California, trust Rubicon Mortgage Fund to guide you through your reverse 1031 exchange with confidence and expertise.

Contact us today to learn how we can help you leverage the power of reverse 1031 exchanges in your real estate investment strategy.

Loan Amount: $725,000

Loan Term: 6 Months

CLTC: 40%

Loan Position: First Position Deed of Trust

1. Securing an Investment: In a competitive real estate market, waiting to sell your existing property before purchasing a new one can result in missed opportunities. A Reverse Exchange allows you to secure a new property right away.
2. Tax Deferral: By deferring capital gains taxes, investors can reinvest all proceeds into the new property, maximizing their purchasing power and potential return on investment.
3.  Market Timing: Investors can take advantage of market conditions, acquiring a property when prices are favorable, without rushing the sale of their current property.
4.  Flexibility: The Reverse Exchange provides flexibility by allowing investors time to make upgrades or improvements to the newly acquired property before placing it on the market for lease or sale.

Rubicon Mortgage Fund recently facilitated a $550,000 Cash-Out Refinance Loan on a building in Berkeley, California. The property in question is a stabilized 5-unit building under the ownership of a local long-term real estate investor. The loan became necessary due to the impending maturity of the existing mortgage.

The borrower’s initial loan application with a traditional bank was declined primarily due to structural concerns related to the building’s foundation. Like many older structures in Berkeley, this building’s brick foundation presented a risk factor that conventional lenders deemed challenging.

The banker handling the transaction recommended Rubicon Mortgage Fund for the cash-out refinance loan, given our specialization in asset-based lending. We successfully settled the borrower’s outstanding note/debt, providing the necessary liquidity for renovations, notably reinforcing the brick foundation.

Upon completion of the renovations, the borrower intends to transition back to their traditional banking relationship, underscoring our role as a bridge lender in this context.

Furthermore, the property’s location in a family-friendly neighborhood enhances its appeal and investment potential, reflecting positively on its overall value.

Loan Amount: $550,000

Loan Term: 12 Months

LTV: 44%

Loan Position: First Position Deed of Trust

Rubicon Mortgage Fund recently reaffirmed its commitment to supporting real estate ventures in Northern California by funding a commercial real estate acquisition loan for a multifamily acquisition in the region. In this instance, a loan of $400,000 was secured within a 30-day timeframe. The borrower’s intention is to retain ownership of the four-unit condominium for the long term, aiming to bolster their cash flow over time.

With a strategic vision in mind, the borrower plans to undertake minor renovations within the units to enhance their appeal and consequently elevate rental rates. These renovations consist of new appliances, interior and exterior paint, new carpets, and updated porches. Notably, the exit strategy involves a 1031 exchange sale of another property out of state, demonstrating a prudent approach towards fulfilling financial obligations to Rubicon Mortgage Fund. Upon the sale the net proceeds will go towards paying Rubicon’s loan off in full.

This transaction was initiated through a referral from a respected local commercial real estate broker, underscoring our dedication to collaborating within the Northern California market. Moreover, the borrower brings a wealth of experience as a seasoned investor in the northern California commercial real estate landscape, aligning perfectly with our mission to support local initiatives.

Situated within a larger residential development surrounded by similar condominiums, this four-unit property represents a promising addition to the regional real estate landscape. At Rubicon Mortgage Fund, we take pride in our involvement in commercial real estate acquisition loan’s that contribute to the vibrancy and growth of the northern California market.

Loan Amount: $400,000

Loan Term: 6 Months

LTV: 27%

Loan Position: First Position Deed of Trust

Rubicon continues to provide short-term bridge financing solutions throughout CA. In one of Rubicon’s recently closed transactions, Rubicon provided a loan for a client to complete a reverse 1031 exchange. Due to a reverse 1031 exchange complexity, many lenders shy away from this dynamic transaction because of its moving parts to enable a successful closing. The client will sell the relinquished property in the next six months as an existing strategy.

Loan Amount: $475,000

Loan Term: Six Months

LTV: 45%

Loan Position: First Position Deed of Trust