Rubicon Mortgage Fund, LLC recently closed a $460,000 cash out loan on a single-family residence in Bethel Island, California. While the property is residential in nature, it is a non-owner occupied investment and will soon become the centerpiece of a brand-new waterfront business.
From All-Cash Purchase to Business Expansion
The borrowers initially purchased the property outright, paying all cash. Their vision for the site goes beyond simple ownership, they are transforming it into a boat rental business to serve the growing recreational community in the area.
The property itself is 2,407 square feet on a 4,835 square foot waterfront lot. With resort-style surroundings, a country club atmosphere, and an active boating culture, Bethel Island is attracting attention as one of the region’s up-and-coming destinations. The borrowers are currently making improvements, such as repairing and enhancing the outer deck, to prepare for the launch of the business.
Why a Non-Owner Occupied Loan Was the Right Fit
Since the property will not serve as the borrowers’ personal residence, it falls under the category of a non-owner occupied property. This type of loan is often used by real estate investors and entrepreneurs to acquire, renovate, or expand properties that generate income.
In this case, the borrowers needed capital to complete renovations and cover start-up costs for their new waterfront venture. By securing a cash out loan, they could access the equity in the property they had purchased outright without needing to sell or take on additional investors.
Lending to a Trust
An interesting element of this transaction is that the borrowers hold the property in a trust. Many lenders have limitations or restrictions when lending to trusts, but Rubicon Mortgage Fund, LLC has the flexibility to accommodate this structure. This adaptability allowed the borrowers to keep their preferred ownership arrangement while still gaining access to the funds they needed.
Strong Borrow
