Natick Investment Project

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Current Funding Status:

Tranche A: 75k/400k Committed

Tranche B: 0/450k Committed

Project & Economic Context

I. About the Collateral

This project contemplates the purchasing and subsequent redevelopment of a single family property located in Natick, Massachusetts, whereby the original 1880 structure of roughly 2200 SF is to be torn down, and a new 4000-4300SF luxury new construction is erected on the same general footprint, the same property, together with a cash reserve, serve as the collateral for this investment.

  • Property located on South Main Street of Natick, Massachusetts.
  • 1 mile away from the Natick Center, Natick commuter rail station, Natick elementary school, and Natick high school.
  • 25 minutes away from Boston City, 10 minutes away from the Natick Mall
  • Land just shy of 0.5 acre, city water, city sewer, natural gas connection.
  • Situated on a gentle slope with minimal flooding risk, outside of any known historical building zoning, wetland or flood zoning.
  • Natick median single family sale price of $990,000.00 as of Oct of 2025, with luxury homes in comparable areas routinely sell for 1.5-2.2 million.
  • Current plan calls for 4200SF luxury new construction with 8ft partially finished basement, 3 car garage. 5 bedrooms, 4.5 bathrooms.
  • Targeting 1.8 million sale price for current market, but could reach 2.1 million by 2028 without major market shifts.
  • Existing property is to be purchased for $300,000.00 only, about $250,000.00 below market price, due to Borrower’s skin in the game arrangement.
  • Key Element 1: Due to the significantly lower acquisition cost tied to this investment, investors of this project enjoy a much lower LTV ratio throughout the entire project lifespan.
  • A Borrower funded, $25,000.00 collateral reserve shall exist for this investment, dedicated to supplement the primary collateral. (Loan Commitment and Escrow Agreement section 4.7)

II. Risk Adjusted Returns

The economic terms of this investment offering are quite simple:

  • Standard base interest is set at 12% per annum, simple interest, calculated on a weekly basis.
  • All Deposit Principal received accrue base interest starting from the date of receipt.
  • All Funding Principal for each project stage accrue base interest starting from the date of release.
  • All funds received from Tranche B Early Funders into the Early Funding Escrow Account (Tranche B only) accrue interest starting from the date of receipt. (see section III of the Funding and Deployment page of this website, and Article VII, 7.9 of the Loan Commitment and Escrow Agreement)
  • Tranche B Lenders shall enjoy an one time success premium upon successful exit of the project, equal to 13% of the total Tranche B released amount, due to the more elevated risk profile compared to Tranche A Lenders. Tranche B Early Funders have the success premium reduced to 3% due to the early and persistent interest accrual on such funds.
  • Due to the extremely de-risked nature of the Tranche A investment, Tranche A Lenders do not enjoy any tranche specific success bonuses but shall retain all base interest rate for the Deposit Principal received and Funding Principal released.
  • Should any prospective investor elect to fund more than 70% of the aggregate investment amount for this project ($850,000.00), such investor shall be deemed a Majority Lender, and shall enjoy an additional one time success premium upon successful exit of the project, equal to 3% of all released amount regardless of Tranche designation, as well as Majority Lender decision rights where required under the master Contract.
  • Under the assumption that the project successfully exits 30 months after Closing, the IRR for Tranche A investors is 12% nominal, 13.5% if funding as Majority Lender. IRR for Tranche B investors is 17% nominal after success premium, 18.5% if funding as Majority Lender.

Reference: Loan Commitment and Escrow Agreement, Article X.

III. About the Borrower

I’ve been in the business of residential construction and renovation for over 12 years, to date, I’ve handled over:

  • 100 full gut bath renovations often with structural modification and expansion, mostly luxury finish in wealthy towns.
  • About 20 kitchen renovations of various size and scale .
  • 2 additions, both in Natick through referral, 2015 and 2017.
  • 1 full house interior full gut and rebuild in Dover, 2019.
  • Partial interior structural redesign and rebuild (roughly 50% of the interior space) also in Dover through referral, 2021.
  • 1 full house interior full gut, structural redesign and rebuild with new basement walls poured and keyed to existing field stone foundation, 2023.

Unlike most contractors, my business model has always focused on quality over speed, we rarely hired outside subs, and maintained a small in house crew with me executing the skilled works. So it’s fair to say that I have hands on experience with all stages of a construction project.

For this present project, I’m following my old business tradition, self execution with a small in house crew, and hire out only when practical or otherwise necessary.

Key Element 2: While the project timeline is inevitably extended by 8-12 months, the estimated labor and contractor savings resulting from this arrangement amounts to roughly $250,000.00 over the entire project, drastically reducing project default risk due to cost overrun even despite the extra carry cost, while allowing even further compression of LTV at each stage of the project.

Key Takeaway:

The Key Elements described above, when taken together, represents a roughly $350,000.00 project cost reduction over the span of 30-36 months after accounting for the extra carry cost, which directly translates to significantly lower total borrowed amount against the same collateral value, and are the key drivers for the unusually long project time span, as well as the unusually low LTV value even with deferred interest fully accounted for.

Dive into LTV & Capital Exposure