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August 2024 – Mailbox Money

August 13, 2024

As we move towards the end of summer (that was fast!) I wanted to take a moment to update you on the progress and performance of 890 Capital. The fund continues to deliver strong results, providing our investors with returns of 10%+. 

Fund Performance and Updates

The average LTV of the Fund’s outstanding loans is 69.02% across all loans with an average loan size of $206,100. All borrowers are paying on time and we have had no defaults in the portfolio. 

One important update for existing investors and anyone who has read our fund docs relates to the collateralization of investor notes. We have received feedback from some of our investors regarding the clarity of this aspect in our documentation. To address this, we have made a change to our documents to ensure that it is explicitly stated that the notes are collateralized by the fund’s portfolio of real estate assets, as was always intended. This change has been formalized in the latest versions of our PPM and Investor Booklets. We appreciate your patience as we ensure all documentation accurately reflects our commitments.

Market Insights and Loan Forecasts

According to Bankrate, the current national average interest rate for the benchmark 30-year fixed mortgage has dropped to ~6.51%, down from 7.5%. For every 1% drop in rates, you can expect to see 5M borrowers entering the market nationally. 

Wars in Europe and the Middle East, a tense presidential election, recent market turbulence and Federal Reserve Chair Jerome Powell commenting “a reduction in the policy rate could be on the table as soon as the next meeting in September,” all that seems certain is continued uncertainty in the near-term. 

Meanwhile, our pipeline of loan opportunities remains robust, with more requests for loans than we currently have capital available. This “good problem” underscores the demand for the flexible, fast financing solutions while allowing us to be selective to ensure deals are properly underwritten. 

Tax-Advantaged Investing

We understand the importance of maximizing your returns, not just through strong fund performance but also through tax-efficient strategies. As ordinary income may impact your net returns, we have been exploring opportunities to mitigate this impact. We now offer the option to invest through retirement accounts / IRAs, leveraging an industry leading low-cost custodian. This provides steady, passive growth using retirement funds. 

By investing through a self-directed IRA, you can benefit from tax-deferred or tax-free growth defer taxes on your returns, allowing you to realize the full benefit of the 10%+ returns that our fund provides. 

Is any portion of your retirement account earning a steady, consistent return? If this is of interest to you, please let us know, and we can assist you with setting up your account. The process is quick and a white-glove approach. We are committed to exploring additional tax-efficient vehicles for our investors and will keep you informed of new opportunities as they arise.

Looking Ahead

As we look forward to the coming months, our focus remains on raising capital and delivering consistent returns while maintaining transparent communication with you. We continue to seek out high-quality opportunities that align with our investment strategy and are dedicated to ensuring the long-term success of the fund.

Thank you for your continued trust in and support of 890 Capital. If you have any questions or would like to discuss any aspect of an investment, please do not hesitate to reach out. We are here to support a profitable and secure journey with all investors.

 

We appreciate you!

Frank & Caleb

890 Capital LLC

 

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