Expert Contribution

How a Private Money Lender

can be used for Bridge Financing

How a Bridge Loan is structured: 

Bridge Loans allow borrowers to purchase their new property before selling their existing property. By using a bridge loan, borrowers will use their existing property as additional collateral to make an extremely competitive offer, and possibly even purchase the new property with no down payment. Rubicon can offer up to a 60% loan using the combined value of the 2 properties, subject to Rubicon’s internal valuation. 

The flexibility a bridge loan provides to borrowers:

Bridge Loans enable borrowers to make aggressive offers on their purchase, to buy before they sell, while giving them more flexibility on their timeframe to relocate. The ideal scenario is when there is liquidity in the existing property and borrowers prefer the option to reduce the cash to purchase before selling. A Bridge Loan can also be a useful tool for an investor or borrower looking to relocate to a different submarket. This type of loan can additionally give clients the opportunity to improve the existing property as an attempt to get top dollar on the sale, after purchase of the new property, also eliminating the necessity to find a rental in the interim. 

How a Bridge Loan is paid off: 

Upon sale of the existing property, most of the proceeds pay off the loan with Rubicon, and any existing debt can be refinanced through a conventional lender. Bridge loans can also be used on reverse 1031 exchanges, where the replacement property is purchased using the relinquished property as additional collateral. Rubicon works directly with the 1031 Accommodator to facilitate this.

What is Rubicon Mortgage Fund: 

Rubicon Mortgage Fund, LLC is a direct private money lender in Lafayette, CA. We specialize in financing short-term secured loans and commercial lending on properties throughout California. Rubicon is an asset-based lender, where loans are secured by real estate and the amount of the loan relies on the value of the property or properties, not the borrower’s credit.

What makes Rubicon Mortgage Fund different from conventional lenders: 

Rubicon does not require appraisals or credit checks and is solely asset-based. Rubicon has experience financing both simple and complex transactions and works diligently to find a solution to fit borrowers’ needs. In many real estate transactions, timing is a crucial factor. Rubicon can offer a letter of intent within 24 hours and can typically finance a bridge loan in as little as 10 business days. The above example also works on all commercial property types. 

 


By Cesar Peña, Rubicon Mortgage Fund, LLC, Resident since 2020


About The Author

Residential Bridge Loans
Cesar Peña
Rubicon Mortgage Fund, LLC
925-239-6609

Cesar has been with Rubicon Mortgage Fund, LLC since 2013. Currently V.P. Director of Sales, Cesar is responsible for overseeing Rubicon’s loan originators and placing non-conventional financing for his clients throughout California. 

Cesar received his B.A. degree in Business Administration from Cal State East Bay, Hayward, CA, focusing in Finance and Real Estate Management. Cesar serves on numerous real estate organizations located in the Bay Area. CA BRE #01984871. 

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