Quarterly Update - 2013 Q3

October 2013

Dear Rubicon Mortgage Fund Investor or Prospective Investor: 

Rubicon Mortgage Fund, LLC is pleased to announce that investors who reinvest each month have received a return of 7.135% in the first three quarters of 2013. The Fund currently has 33 loans in its portfolio and holds two REO properties. We funded four new loans during the third quarter totaling approximately $2,250,000, and we received seven pay offs from current borrowers. The Fund’s portfolio of loans, totaling approximately $15,000,000, consists solely of first trust deeds.

Troubled Loan and REO Status Updates:

Kings Beach Lake Tahoe (NOD):
As we mentioned in our last quarterly letter, the Fund made a loan for $750,000 as part of a $3,100,000 loan on two contiguous lake front properties in October 2011. The borrower made a principal payment in 2012 bringing RMF’s outstanding balance to $630,000 which reached maturity in May 2013. When the borrower did not pay off the loan or comply with the offered extension we issued a NOD in May 2013. This past month, the Fund received full payment on the loan, (which included the outstanding principal, as well as accrued interest calculated using the 18% default interest rate and penalties) making this an extremely profitable loan for the Fund.

Fund Growth and Outlook for 2013:

The Fund added 13new investors this quarter and 7 existing investors added capital for a total increase of approximately $1,900,000. This consistent growth has allowed the Fund to continue to diversify its portfolio while remaining focused on quality loans.

We will continue to remain true to our investors in our objective to put capital preservation above all else including short term returns. Management has been extremely patient and selective about making new loans. As a result we have priced some loans more competitively for opportunities that we believe are desirable due to quality and ultimate risk. Interest rates remain low and money supply remains high keeping private money loan prices down towards historical lows. We believe that remaining focused on risk ultimately will best satisfy our investors despite current returns in the 7-7.5% range. Once interest rates increase, and the excess supply of money decreases,we expect the Fund’s rate of return to rise.

Please note that our best sources of referrals come from our current stable of Investors.  Please feel free to give our contact information to any interested colleagues, and as always, contact us directly with any questions.

Sincerely,

Rubicon Management