QUARTERLY UPDATE - 2014 Q3

Dear Rubicon Mortgage Fund Investor or Prospective Investor:

 

Rubicon Mortgage Fund, LLC is pleased to announce that investors who reinvested each month during 2014 have received a total compounded return of 7.093%.  We proudly have made money for our investors each of the 82 months since the Fund’s inception. The Fund is diversified with 53 loans in its portfolio. It also holds three REO properties, which represent less than 3% of the Fund’s portfolio. This quarter we funded eight new loans totaling approximately $7,800,000 and received six loan pay offs totaling $2,100,000. The Fund’s portfolio of loans now totals approximately $27,000,000 and consists solely of first trust deeds.

 

Current Market Place:

The Fund had a very solid quarter with regards to its investor return, especially in August, due to the fact that we received three large pre-payment penalties.  We continue to be active and are receiving several loans requests daily.  Traditionally, the fourth quarter is our busiest quarter for sourcing new loans. Rates remain competitive and quality deals remain our focus. Most experts believe that rates will increase in 2015. Given that the Ten-Year Treasury is under 2.5% this is not much of a stretch. If rates increase it will ultimately benefit the Fund and its investors. Since our average loan term is eighteen months, our interest rate risk is minimized, so higher rates will ultimately equate to higher returns.

 

Troubled Loan Update:

The Calpine Lodge is in contract to be sold!!  We had two separate buyers competing for the Lodge, resulting in a sales price of just over asking.  Rubicon will be carrying a Note back to the buyer who will put down 40% in cash. We will provide more details once the sale is completed. We do have a back-up offer in place, but we do need to keep the terms confidential for now.

 

During the summer the Fund foreclosed on a property in Lancaster, California. The real estate securing the loan is a small stand-alone, owner occupied restaurant. The Fund did not originate this loan, but rather purchased it from a troubled Southern California Fund at a deep discount approximately two years ago.  We are now in the final stages of closing a re-negotiated sale with our original Borrower.  We expect to receive our full asking price (which includes all of the prior loan’s principal, accrued interest and costs), but shall continue carrying the loan. We shall receive a small cash down payment, along with other real property as additional collateral. Overall, things are much better, but we will keep a closer eye on this borrower and his ability to perform.

 

Fund Growth for 2014:

This quarter the Fund’s investor capital grew by $4.1 million, largely from existing investors but also a number of new investors as well.  This consistent growth has allowed the Fund to continue to diversify its portfolio, while remaining focused on quality loans.

 

Contribution History

Reminder:

In an effort to maintain and further improve transparency with our investors and the public, we have made significant changes to improve our website www.RubiconFund.net. The site includes all of our annual audits and our recent quarterly updates. We also actively update the recent transactions tab so that you can follow the changes and status of the portfolio. The site has many user friendly features that will allow both current investors and potential investors to verify our success, as well as locating helpful documents. We will continue to send out electronic ‘blasts’ via Constant Contact with updates on our loan closing. This form of communication will allow you may see where you money is being invested.

 

Please note: Rubicon’s best sources of referrals come from our current stable of Investors. Please feel free to give our contact information to any interested colleagues, family members or partners. As always, contact us directly with any questions.

 

Sincerely,

 

Rubicon Mortgage Fund, LLC