How Private Lending Deals Work
Worcester Financial offers our investors an average return of 9% on their investment. Our loans are short term and generally do not exceed 18 months. The loan is collateralized by real estate or a physical asset. We generally lend up to 70% of the after renovated value of the collateral. Our team underwrites the opportunities in-house and evaluates the risk based on borrower history and market conditions. Upon approval from our underwriting group, we send the opportunity to investors, allowing them to participate as a co-lender.
Worcester Financial is compensated by a combination of origination fees paid by the borrower at closing as well as a monthly servicing fee. The monthly servicing fee helps cover the cost of managing the loan portfolio and administrative expenses. The servicing fee generally does not exceed 2% annually. For example, if the borrower is charged an annual percentage rate of 11%, 9.5% is paid to the investor group and 1.5% is retained by Worcester Financial as a servicing fee. Loan Servicing and management is a benefit to the Investor but is always paid by the borrower.
What is the Risk Profile of Investing in Hard Money Loans?
Private lending is an excellent option for someone looking for passive income they can rely on monthly. Like any investment, there is still risk associated with these types of loans. If the borrower cannot repay the loan, we foreclose on the collateral and liquidate it.
Interested in becoming an investor with Worcester?
Contact us directly for more information.
Worcester Investments, LLC
720 Main Street
Kansas City, MO 64105