Is Airbnb a good investment? For a lot of investors in Charleston the honest answer in 2026 is "less than it looks on the listing." The gross revenue is real. What changes the picture is everything that comes out before the owner sees any of it.

My partner Caleb owns short-term rentals and long-term rentals, some of them paid off, and he has been moving capital out of them and into the fund. His summary: taxes, insurance, repairs and turnover have eaten the returns, and he doesn't expect appreciation to bail them out for a while. That is one operator's experience. Below is the math, with sources, so you can check it against your own. (For traditional twelve-month leases, see the companion post: is rental property a good investment?)

What a Charleston Airbnb earns

AirDNA tracks the Charleston short-term rental market at about 8,590 active listings. The average listing earned $86,600 in the twelve months through September 2026, at 63% occupancy and a $435 average daily rate (AirDNA, updated Oct 4, 2026). Revenue is up sharply year over year. So is supply: AirDNA counts 135% more active listings than a year ago, which is more competition for the same guests.

Other trackers come in lower. Rabbu put average Charleston revenue near $67,000 with 40% occupancy, and Airbtics near $74,000. We use AirDNA's higher figure below, which flatters the rental.

That $86,600 is gross. AirDNA's own definition is revenue before host expenses, including cleaning fees paid by guests.

Is Airbnb a good investment after fees, taxes and the mortgage?

Here is one illustrative property. It is not a real deal and your numbers will differ. Every input is either sourced or labeled as an assumption.

The purchase. A house at $704,000, the median Charleston County single-family sale price in September 2026 (Post and Courier, CTAR data). Investment-property financing with 25% down: $176,000 of equity and a $528,000 loan. A 30-year fixed at 7.28%, the Freddie Mac average as of October 1, 2026 (Freddie Mac PMMS). Investment-property rates usually run higher than that average, so this is generous too.

The year, self-managed:

Line	Amount	Basis
Gross revenue	$86,600	AirDNA Charleston average listing
Airbnb host service fee	($13,423)	15.5%, the single-fee rate most hosts now pay (Airbnb)
Cleaning	($11,250)	assumption: ~75 turnovers at $150
Utilities and internet	($3,600)	assumption: $300/month
Supplies	($1,800)	assumption: $150/month
Repairs and maintenance	($6,495)	7.5% of revenue, mid-range of the usual 5–10%
Insurance	($3,370)	South Carolina average projected premium; coastal policies usually cost more
Property tax	($12,672)	estimate: 6% assessment ratio × ~0.30 millage
Licensing, accounting	($1,000)	assumption
Net operating income	($32,990)	4.7% of the purchase price
Mortgage payments	($43,352)	$528,000 at 7.28%, 30 years
Cash flow	($10,362)	before vacancy surprises or a new roof

Operating costs come to about 62% of revenue. That sits at the top of the 40–60% range industry sources quote for owned short-term rentals, mostly because of two lines that hit South Carolina investors hard.

Property tax. South Carolina assesses a primary residence at 4% of market value and a second home or rental at 6%, and owner-occupied homes are also exempt from school operating millage. A rental pays more tax on the same house than its owner-occupied neighbor.

Insurance. Coastal South Carolina premiums have climbed 20–35% (in some places costs have even 2-3x) since 2023, and a July 2026 report projected the state among the steepest increases in the country over the next decade (Live 5 News).

Hire a full-service manager, which in Charleston typically costs 20–30% of revenue, and another $17,000 or more comes off.

Negative leverage: when the mortgage costs more than the house earns

The core problem is in two numbers. The property earns about 4.7% on its price before financing. The bank charges 7.28%. When borrowed money costs more than the asset yields, every dollar of debt makes the return worse. That is negative leverage, and at 2026 rates it is the default outcome for a lot of short-term rentals.

Paying cash fixes the cash flow but not the yield. A paid-off version of this house nets about $33,000 a year on $704,000 of capital, the same 4.7%.

The Charleston rule most out-of-town buyers miss

Inside the City of Charleston, a residential short-term rental must be the owner's primary residence, verified by the county's 4% legal-residence assessment. Investment properties are not eligible, except commercially zoned properties in one small overlay district (City of Charleston STR FAQ). Guests are capped at four adults, and the permit renews every year. Neighboring towns and the unincorporated county set their own rules, so check the exact address before you buy.

The same $176,000 in a fixed-rate note

The alternative we offer is a different kind of investment, so the comparison needs care.

At 890 Capital, investors buy notes issued by the fund. The fund makes short-term, first-position loans to real estate investors, mostly in the Charleston tri-county, and pays note holders a fixed rate: 10% on a one-year note, 10.5% on three years, 10.75% on five, with interest paid monthly by the 5th (Easy Cash Flow).

The $176,000 down payment from the example, placed in a three-year note at 10.5%, pays $18,480 a year, or $1,540 a month. There are no guests, cleaners or insurance renewals. The underwriting, servicing and collections are the fund's job, and the fund has closed 232 loans since April 2024.

What the rental gives you that a note doesn't

A fair comparison has to include this side.

• Appreciation. A note pays its rate and returns principal. It never rises in value. A house can. Charleston County's median price was down 3.6% year over year in September, but over long periods Lowcountry real estate has appreciated, and an owner keeps that upside.
• Debt paydown. The mortgage in the example retires about $5,000 of principal in year one. That is equity, though it isn't cash.
• Tax treatment. Depreciation can shelter rental income, and some short-term rental owners use it aggressively. Interest from a note is generally taxed as ordinary income. Talk to your CPA, because this alone can change the answer.
• Control and use. You choose the property, the price, the renovation and the exit, and you can stay there.
• Liquidity. Neither is liquid. A note is committed for its term, and the PPM sets the renewal and withdrawal terms. A house takes months to sell.

And the risks of a note are real. Borrowers pay late, some loans need workouts, and your principal is not insured. First-position liens and conservative loan-to-value (capped at 75%, averaging in the mid-60s) are there to protect principal, but they don't make it guaranteed.

So, is Airbnb a good investment?

It can be: for an owner-occupant who rents part of a home, for someone who will self-manage and wants the tax treatment, or for a buyer who got in at a lower price and rate. For an investor buying a Charleston house with financing today, mainly for income, the numbers above are hard to make work.

If you are weighing it, run your own version of the table first. If the cash flow is negative, ask whether you're buying a business or a hope for appreciation.

If you want to compare against monthly, fixed-rate income, read how a first position mortgage protects fund capital, browse our news and updates, or request investor access to see the offering documents. For a neutral primer on weighing risk, the SEC's Investor.gov guide is a good place to start.

This article is for informational purposes only and is not an offer to sell or a solicitation of an offer to buy any security. Any offering is made only to accredited investors under Regulation D Rule 506(c), by means of the fund's private placement memorandum, which describes the risks. The short-term rental example is illustrative, uses third-party market data and stated assumptions, and does not describe any specific property. Investing in private credit involves risk, including the possible loss of principal. Past performance does not guarantee future returns. Nothing here is tax advice. See 890capital.com for full disclosures.

Is rental property a good investment? For most of the last decade in Charleston, the answer was "yes, mostly because the house went up." Rent covered the mortgage, more or less, and appreciation did the heavy lifting. In 2026 rent still comes in, but appreciation has slowed and the cost of owning has not.

We ran the same exercise for short-term rentals. Here is the long-term version, with sources and stated assumptions.

What a Charleston rental brings in

The average rent for a house in Charleston was about $3,500 a month for a three-bedroom as of May 2026 (LocatingCHS). Across all unit types, the market is flat. Rental Beast reported Q2 2026 median rents up 1–2% year over year, with 42% of listings still offering concessions (Rental Beast). Charleston absorbed a large wave of new apartments in 2024 and 2025, and that supply keeps a lid on rent growth.

Is rental property a good investment after the real costs?

The illustrative property is the same house as in the Airbnb example: $704,000, the Charleston County median single-family sale price in September 2026 (Post and Courier, CTAR data), bought with 25% down ($176,000) and a $528,000 loan at 7.28% for 30 years, the Freddie Mac average as of October 1, 2026 (Freddie Mac PMMS).

Line	Amount	Basis
Rent, 12 months	$42,000	$3,500/month, three-bedroom house average
Vacancy	($2,100)	assumption: 5%, about 2½ weeks a year
Property management	($3,990)	10% of collected rent, the most common South Carolina quote (Belong)
Leasing fee	($875)	half a month's rent per new tenant, one new tenant every two years
Repairs and turnover	($3,360)	assumption: 8% of rent (paint, carpet and fixes between tenants)
Insurance	($3,370)	South Carolina average projected premium; a landlord policy on the coast usually costs more
Property tax	($12,672)	estimate: 6% assessment ratio × ~0.30 millage
Accounting, misc.	($500)	assumption
Net operating income	$15,133	2.1% of the purchase price
Mortgage payments	($43,352)	$528,000 at 7.28%, 30 years
Cash flow	($28,219)	about −$2,350 a month

The house would have to cost about $350,000, half the county median, before this rent covered the mortgage and the costs. Charleston houses that rent for $3,500 a month don't sell for $350,000.

The tax line is the one that surprises people

Property tax is the biggest operating cost in the table, and it's specific to South Carolina. The state assesses an owner's primary residence at 4% of market value and a rental or second home at 6%. Owner-occupied homes are also exempt from school operating millage. Move out of your house and rent it, and its tax bill can more than double even though nothing about the house has changed.

Insurance is the other line moving the wrong way. Coastal South Carolina premiums are up in some areas 2-3x since 2023, and a July 2026 study projected the state among the steepest increases in the country over the next ten years (Live 5 News).

What about a paid-off rental?

This is the case most landlords think they're safe in, and it is where the math is least obvious.

If you own the house outright, there is no mortgage and the cash flow is positive: about $15,000 a year in the example. But the right question isn't "does it make money?" It's "what does the money tied up in it earn?" The house could sell for roughly $704,000. Fifteen thousand dollars on $704,000 is a 2.1% yield (cash on cash return).

My partner Caleb owns rentals (short term, long term, AirBnbs, trailer parks, etc.), including paid-off ones, and this is the calculation that led him to move capital out of them and into the fund. Taxes, insurance, repairs and turnover took most of the return, and he doesn't expect appreciation to make up the difference for some time. That is his view, not a forecast, and your property may look different.

The same capital in a fixed-rate note

At 890 Capital, investors buy notes issued by the fund. The fund makes short-term, first-position loans to real estate investors, mostly in the Charleston tri-county, and pays note holders a fixed rate: 10% on a one-year note, 10.5% on three years, 10.75% on five, with interest paid monthly by the 5th (Easy Cash Flow). The minimum is $100,000.

Two comparisons, using the same figures as above:

• The down payment. $176,000 in a three-year note at 10.5% pays $18,480 a year, $1,540 a month. The rental in the example loses about $28,000 a year on the same $176,000.
• The paid-off house. $704,000 of equity earning 2.1% in a rental is about $15,000 a year. The same amount at 10.5% would be about $73,900 a year, before tax.

What a rental gives you that a note doesn't

• Appreciation. A note never rises in value. A house can, and over long periods Charleston real estate has. The county median was down 3.6% year over year in September, so it isn't helping right now, but the upside belongs to the owner.
• Principal paydown. About $5,000 of the mortgage is repaid in year one of the example. That builds equity, though it isn't cash.
• Tax treatment. Depreciation and deductible expenses can shelter rental income. Note interest is generally ordinary income. Ask your CPA. This can change the comparison, especially for high earners.
• Inflation and control. Rents can rise over time, and you control the asset, the tenants and when to sell. A note pays a fixed rate for its term.
• Selling costs. Selling a house to redeploy the money costs commission, closing costs and possibly capital-gains tax. Count that before comparing.

A note carries its own risks. Borrowers pay late, some loans need workouts, your principal is not insured, and your capital is committed for the term under the PPM. First-position liens and loan-to-value capped at 75% (averaging in the mid-60s) are there to protect principal, but they don't guarantee it.

So, is rental property a good investment?

It can be: when you bought years ago at a lower price and rate, when you need the tax treatment, or when you're buying for the long-run appreciation and can carry the negative cash flow. For an investor buying a Charleston rental today mainly for income, the numbers above are hard to make work. For an owner of a paid-off rental, the useful exercise is to divide your net income by what the house would sell for, and look at that number honestly.

If you want to compare it with monthly, fixed-rate income, start with our returns calculator, see how a first position mortgage protects fund capital, or request investor access to see the offering documents. The SEC's Investor.gov guide to risk is a good neutral primer.

This article is for informational purposes only and is not an offer to sell or a solicitation of an offer to buy any security. Any offering is made only to accredited investors under Regulation D Rule 506(c), by means of the fund's private placement memorandum, which describes the risks. The rental example is illustrative, uses third-party market data and stated assumptions, and does not describe any specific property. Investing in private credit involves risk, including the possible loss of principal. Past performance does not guarantee future returns. Nothing here is tax advice. See 890capital.com for full disclosures.

If you're weighing a private credit investment, the first thing to understand is how a private lending fund works month to month. Where the money comes from, who holds what, and what happens on the day a borrower doesn't pay.

Here is how it works at 890 Capital.

How a private lending fund works: the two sides

A private lending fund sits between two groups of people.

On one side are borrowers. In our case they are real estate investors buying houses that need work, renovating them, and then selling or refinancing. They need money fast, they need it for six to twelve months, and they need it released in stages as the work gets done. Banks generally won't do that (or at least not quickly), so these borrowers pay a higher rate than a bank would charge.

On the other side are investors (or note holders). They lend money to the fund, not to any one borrower. In exchange they hold a note issued by the fund with a fixed rate and a fixed term. At 890 that is 10.00% annualized on a one-year note, 10.50% on three years and 10.75% on five, with interest paid monthly.

The fund makes the loans and holds the mortgages. Each loan is secured by a first-position mortgage on the property, which means no other lender is ahead of the fund's claim on that house. Investors don't hold a lien on any individual property. They hold a claim on the fund, and the fund holds the liens. (We covered that structure in more detail in First position mortgage: what it means for private lending fund investors.)

The 1st: borrower interest comes in

Our loans are interest-only and due on the 1st of the month. A borrower who has drawn $300,000 against a renovation pays a month of interest on the entire amount of the loan (not just what is outstanding), and the principal comes back in one piece at the end, when the house sells or refinances.

Most payments arrive on the 1st or within the grace period written into the loan.

Some arrive late. That is ordinary in lending, and anyone who tells you otherwise is describing a fund with very few loans or not describing it accurately. When a payment is late, someone on our side calls the borrower, finds out why, and looks at the project. A late month on a house that is 80% finished is a different situation from a late month on a house where the work has stopped, and our response is different too.

The spread: what it pays for

The borrower rate is higher than the investor rate. The difference is the spread.

The spread is not profit in the simple sense. It has to pay for servicing every loan, inspecting draws, the legal and administrative cost of running a regulated fund, and the cost of a borrower who pays on the 20th instead of the 1st, or who needs a short extension to finish. A fund is only as durable as its spread is honest about those costs.

This is also why the investor rate is fixed. A note holder's 10% doesn't move when one borrower is late. The fund carries that timing risk, and the spread is what it carries it with.

The 5th: distributions go out

On the 5th, the fund pays investors. Each note holder receives one month of interest at their fixed rate. An investor with $250,000 in a three-year note at 10.50% receives a little under $2,200 a month.

Investors who prefer to compound can reinvest instead of taking the cash. Investors using retirement money or want tax advantaged growth can hold their notes in a self-directed IRA through any number of self directed IRA companies, in which case the distributions go to the IRA.

That is the monthly cycle: interest in on the 1st, reconciled in the days that follow, distributions out on the 5th. It is meant to be predictable.

Why the loans are short

The loans underneath the fund are short on purpose. Most run six to twelve months, sized to the renovation rather than to how long we would like to collect interest.

Short terms do three useful things for an investor. Problems show up early, in the draw requests and the monthly payments, rather than years in. The book keeps turning over: since April 2024 we have closed 237 loans totalling more than $80 million, and 98 of them have already paid off. And new loans are underwritten against current prices instead of being locked into last year's market.

The investor's note runs one, three or five years at a fixed rate. Over the life of a single note, the fund underwrites a lot of loans, each one against the values of the day and where the market is at that moment.

What happens when a loan ends

Every loan ends one of three ways. The house sells and the payoff comes out of the closing. The borrower refinances into a longer-term loan, which pays us off. Or the loan ends in a conversation: the work ran long or a buyer fell through, and the answer is a short extension on new terms, more equity from the borrower, or a change of plan.

If none of that works, the first-position mortgage is what protects the fund's capital. That is why we underwrite all three outcomes before lending, and why our loan-to-value is capped at 75% and averages in the mid-60s. The equity cushion is what makes the third conversation survivable.

What to ask any private lending fund

Whether you invest with 890 or anyone else, ask the same questions. What lien position does the fund hold? What is the loan-to-value at origination? How many loans are late right now, and what is being done about them? How are distributions funded, and on what date? The SEC's Investor.gov guide to risk is a good companion to that conversation.

If you want to see how this works in practice, start with Easy Cash Flow, read our recent news and updates, or request investor access to see the offering documents.

This article is for informational purposes only and is not an offer to sell or a solicitation of an offer to buy any security. Any offering is made only to accredited investors under Regulation D Rule 506(c), by means of the fund's private placement memorandum, which describes the risks. Investing in private credit involves risk, including the possible loss of principal. Past performance does not guarantee future returns. See 890capital.com for full disclosures.

Every private lender says "first position." Most investors nod at it. Fewer could say exactly what a first position mortgage does for them, what it does not do, and who actually holds it. This post answers all three, using the way 890 Capital is set up as the example.

What a first position mortgage is

A mortgage is a lien: a recorded claim against a property that secures a loan. A property can carry more than one. The order they were recorded in, and any agreements between lenders, decide who gets paid first if the property is sold or the loan goes bad.

A first position mortgage is the lien at the front of that line. If the property is sold, voluntarily or otherwise, the first lienholder is repaid before anyone behind it sees a dollar. A second-position lender is repaid only from what is left over. An unsecured lender has no claim on the property at all.

It does not make a loan safe. It decides who absorbs a loss first when one happens.

Who holds the mortgage in a private lending fund

This is where investor marketing in private credit often gets loose, so it is worth being precise.

At 890 Capital, the fund makes the loans and the fund holds the first position mortgages. Each loan is secured by a specific house, most of them in Charleston, Berkeley and Dorchester counties. Outside the tri-county we lend selectively, where we know the operator or the asset, and the bar goes up rather than down.

Investors do not hold a lien on any individual house. They hold notes issued by the fund, at a fixed rate for a fixed term (one, three or five years), with interest paid monthly by the 5th. You can see the current terms on the Easy Cash Flow page.

That distinction matters for two reasons. First, it is accurate, and you should be wary of any pitch that blurs it. Second, it is the reason the structure works: no single project decides your return. The fund's book of loans does. Since April 2024 the fund has made 230 first-position loans, 95 of which have already been paid off.

What a first position mortgage protects against

Being behind someone else. If a loan fails and the property has to be sold, there is no bank ahead of the fund waiting to be paid first.

A thin margin, if the loan was sized properly. Position only matters if there is value behind it. We cap loan-to-value at 75% and the book averages in the mid-60s, which means a house has to lose roughly a third of its value before the fund's position is under water. First position with 95% leverage is a much weaker thing than first position at two-thirds of value.

A borrower with no reason to fix the problem. A lender in first position has leverage in a workout. The borrower knows the lender can take the property, so a late loan usually gets caught up or restructured rather than abandoned.

What it does not protect against

A first position mortgage is a claim on a house. It does not guarantee anything, and it is worth being honest about the limits.

Time. Working out a late loan takes months. Taking a property back, finishing it and selling it takes longer. Interest keeps accruing, but money that is tied up in a workout is not being redeployed.

Cost. Legal fees, carrying costs, and the cost of finishing a renovation all come out of the recovery. The equity cushion has to cover those as well as any fall in value.

A bad valuation at the start. If the loan was sized off an optimistic appraisal, the cushion was never really there. That is why we underwrite the house before the borrower, using sales from a few blocks away rather than a few zip codes, and checking the renovation budget line by line before we look hard at the person.

Unfinished work. A half-renovated house is worth less than either the purchase price or the finished value suggests. That risk is managed by releasing renovation money in stages, after someone has stood in the house and checked the work. See how the hard money draw process works.

Liquidity. A note has a term. Your capital is committed for that term.

Loans do go late. Ours do. First position does not prevent that. It decides where the lender stands when it happens.

Questions to ask any lender about first position mortgages

If you are comparing private lending funds, these four questions separate a real first-position lender from a marketing line:

1. Is every loan in first position, or most of them? "Primarily" and "exclusively" are different answers.
2. What was the loan-to-value at origination, on average and at the maximum? Position without a cushion is not worth much.
3. Who holds the lien: the fund, or the investor? The honest answer for most funds is the fund. If someone tells you that you personally hold the mortgage on a house, ask to see the recorded assignment.
4. What happens operationally when a borrower misses a payment? Who calls, who visits the property, and how long before a decision is made.

A lender who answers all four without hedging is telling you something. So is one who does not. The SEC's investor education site has a useful plain-English primer on what investment risk actually means, and it is worth reading before you commit capital anywhere.

The short version

A first position mortgage means the lender is first in line on the property. In a fund like ours, the fund is that lender. Investors hold notes issued by the fund, and the fund's assets are first-position loans lent at roughly two-thirds of value. It is a plain structure. That is the point of it.

You can follow what we are lending on in our news and updates, or request investor access to see the offering documents.

For accredited investors only. This post is for informational purposes and is not an offer to sell or a solicitation of an offer to buy any security. Any offering is made only through the fund's private placement memorandum under Rule 506(c) of Regulation D. Investing in private real estate debt involves risk, including the possible loss of principal. Past performance does not guarantee future returns. See 890capital.com for full disclosures.

The hard money draw process is the part of private lending that almost nobody explains, and it is the part that does the most work. Investors ask about rates, terms and lien position. Those matter. But the mechanism that decides whether a renovation loan ends well is quieter than any of them: the money goes out in stages, and each stage is released only after somebody has physically looked at the work.

Here is how it runs at 890 Capital, and why it is worth understanding before you put capital into any private credit fund.

The money does not all move at closing

A bridge and rehab loan has two parts. There is the purchase money, which the borrower needs on the day they buy the house. And there is the renovation money, which they need over the following months as the work gets done.

At closing, only the first part moves. The renovation portion stays with the lender. On an average loan in our book of around $340,000, that can mean a meaningful share of the facility sitting undisbursed on day one.

This is the single biggest structural difference between a hard money loan and a lump-sum loan. A borrower who receives the whole amount at closing has every incentive to be optimistic about the schedule. A borrower who receives it in stages has to produce work before the next tranche arrives.

The hard money draw process, stage by stage

1. The borrower completes a stage of work

Framing. Roof. Mechanicals. Drywall. The exact stages depend on the scope, which is agreed line by line during underwriting rather than invented later. A scope with no slack in it is a warning sign we look for before a loan is ever approved.

2. The borrower submits a draw request

The request names the stage, the amount and the invoices behind it. It is a document, not a phone call.

3. Somebody goes and looks

This is the step that carries the whole structure. A person stands in the house and answers one question: did the work in the request actually get done? Not an appraiser's opinion from three months ago. Not a photograph. Somebody in the property.

Most of our book sits in Charleston, Berkeley and Dorchester counties, which is not an accident. An inspection you can do in twenty minutes is an inspection that happens on schedule. We lend outside the tri-county selectively, and when we do the bar goes up rather than down, precisely because proximity is part of the control.

4. The stage is released, or it isn't

If the work is done, we fund that stage. If it isn't, we don't, and instead we have a conversation about why. That conversation, early and repeated, is worth more than any covenant.

5. Repeat

Five or six times over a six to nine month loan. The money follows the work. It never leads it.

Why this matters more than an appraisal

Investors tend to anchor on the appraisal, because it produces a number and numbers feel solid. An appraisal is one person's opinion of one property on one day, formed before any work started.

A draw inspection is a different kind of evidence. It is repeated, it is current, and it is tied to money that has not yet left the building. Five inspections over six months tell you considerably more about whether a project is real than a single valuation does.

The two work together. The appraisal and the after-repair value set the lending limits at origination. The draw process is what keeps those limits honest while the loan is live.

What it means for the equity cushion

We cap loan-to-value at 75% and the book averages in the mid-60s. That cushion is set on the day the loan closes, against the value of the property as it stands.

The draw process is what stops that cushion from quietly eroding. If renovation money were released up front and the work never happened, the loan balance would climb while the property stayed exactly as damaged as it was at purchase. Staged funding means the balance and the condition of the asset move roughly together. The security keeps pace with the debt.

That is an unglamorous mechanic. It is also the reason a first-position mortgage on a renovation project is a defensible thing to hold rather than a hopeful one. You can read more about how we put capital to work on our Easy Cashflow page.

What goes wrong, and how the process surfaces it

The most common failure in a renovation loan is not fraud and it is not a market turn. It is a budget that assumed nothing would go wrong, meeting a house that had other ideas.

The draw process catches that early. A borrower who comes back for the second draw with the first stage half-finished is telling you something in month two rather than month eight. At that point the options are still wide: extend the schedule, restructure the terms, bring in a different contractor, or in the worst case stop funding and work out the position while the equity cushion is intact.

Loans go late. Ours do, like every lender originating at any real volume. The question is never whether a borrower will miss. It is how early the lender finds out, what position they are in when they do, and whether there is undisbursed money still on the table. Staged funding improves all three.

Questions worth asking any private lender

If you are evaluating a fund that lends against renovation projects, the draw process is a productive thing to ask about:

• Is renovation money released in stages, or disbursed at closing?
• Who performs the inspection, and are they employed by the lender or by the borrower?
• Is the inspection physical, or documentary?
• How many draws does a typical loan have?
• What happens when an inspection fails?

A lender who answers all five without hedging is telling you something about how the portfolio is run. So is one who cannot. The SEC's investor education site has a useful primer on evaluating investment risk that is worth reading alongside any set of fund documents.

The short version

Since April 2024 we have closed 228 loans and funded about $77 million, averaging around $340,000, all in first position, with loan-to-value capped at 75%. Ninety-five of those loans have already run the full cycle: bought, renovated, sold or refinanced, capital returned.

The draw process is a large part of why that cycle completes as often as it does. It is not clever and it is not fast. It is a person in a house, five or six times a loan, asking whether the work got done.

Recent updates from the fund are in our news section, and accredited investors can request investor access to see the documents.

For accredited investors only. Past performance does not guarantee future returns. See 890capital.com for full disclosures.

Private credit has spent three years as the asset class everyone has an opinion about. Most of those opinions are about the institutional end of it — the multi-billion-dollar direct lending funds competing with banks on large corporate loans. That is not the part of the market most individual investors can reach, and it is not the part that determines what happens to their money.

If you are an accredited investor looking at private credit outlook 2026 questions, the useful analysis is narrower and less exciting. It comes down to four things: how long your capital is committed, what the loan is secured by, how big each individual loan is, and what actually happens when a borrower stops paying.

What the private credit outlook 2026 actually rests on

The headline worry about private credit is that a decade of easy money pushed too much capital into the space, spreads compressed, and underwriting standards slipped to keep deployment up. That concern is legitimate, and it is mostly a story about large corporate lending, where the competition to place capital has been fiercest.

Small-balance real estate lending behaves differently, for a boring reason. A $340,000 bridge loan against a house in North Charleston cannot be syndicated, securitized, or sold to a pension fund. There is no auction dynamic bidding the terms down. The lender who writes it is the lender who lives with it.

That does not make it safe. It makes the risks legible. You can drive to the collateral.

Duration is the underrated variable

The single most useful question to ask about any private credit position is: how long before I find out whether the underwriting was right?

On a ten-year direct lending fund holding corporate loans, a bad vintage can take most of a decade to reveal itself. Interest keeps getting marked, distributions keep arriving, and the loss shows up at the end.

On a six-to-nine month bridge loan against a renovation, you know inside two draw cycles. The contractor either showed up or did not. The scope either held or it did not. The exit either exists or it does not.

Short duration is a risk control, not a product feature. It compresses the feedback loop between an underwriting decision and its consequences. Our own book runs six to nine months on an average loan of about $342,000. Since April 2024 that is 224 loans and roughly $76.7 million funded, with 94 of those loans having completed the full cycle and returned capital.

Loan size matters more than geography

Concentration risk usually gets discussed as a map question — how much of the book is in one metro. The more useful version is per-loan concentration.

A book of 224 loans averaging $342,000 behaves differently under stress than a book of twenty loans averaging $4 million, even when the geography is identical. In the first, one bad loan is a rounding error absorbed by the spread on the others. In the second, one bad loan is a hole.

This is the part of the private credit outlook 2026 conversation that gets the least attention, because it is arithmetic rather than narrative. It is also the part an individual investor can actually verify. Ask for the loan count and the average. Two numbers.

Defaults are the part nobody wants to discuss

Any lender who has been originating for more than a year has loans that are late. Anyone who tells you otherwise is either very new or not looking closely.

The question is not whether loans go sideways. It is what the lender's position is when they do, and how quickly you find out.

Three things determine that. Lien position: a first-position mortgage means you are first in line on the proceeds, ahead of any other claim on the property. The equity cushion: if the loan-to-value was 65% at origination, the property has to be worth roughly a third less than appraised before the loan itself is impaired. Whether the lender can act: a lender who knows the market can list and sell a Charleston-area house. A lender three time zones away is negotiating from a worse position.

None of that depends on the borrower's character or on anyone's opinion of the market. It is structural, and it is set on the day the loan closes.

The SEC's plain-English explanation of what risk actually means in an investment is worth ten minutes for anyone evaluating a private offering. It is deliberately unglamorous, which is the right register for this.

What we watch going into 2026

Three things, in order.

Charleston-area absorption. We lend Charleston-first — most of the book is secured by property in Charleston, Berkeley, and Dorchester counties. We lend beyond the tri-county selectively, and when we do the bar goes up rather than down. What matters is how long finished renovation product sits before it sells. That number, not the appraisal, determines whether a six-month loan becomes a nine-month loan.

Construction cost stability. Renovation budgets are the most common point of failure in a bridge loan. When materials and labor move, scopes that penciled at origination stop penciling halfway through.

Borrower repeat rate. The best predictor that someone will finish a project is that they have finished one before. A book weighted toward repeat borrowers is a book with a shorter list of things that can go wrong.

Questions worth asking any private credit manager

If you take nothing else from this, take the list:

• How many loans, and what is the average size?
• What is the weighted average loan-to-value, and what is the cap?
• What lien position, on every loan?
• How many loans are currently late or in default, in dollars and as a share of the outstanding book?
• What happens operationally when a borrower misses a payment?
• How long is my capital committed, and what is the exit?

A manager who answers all six without hedging is telling you something. So is one who does not.

Our own answers are on the how it works page, recent updates are in the news section, and accredited investors can request access to the full offering documents. We verify accreditation before sending anything.

The pitch is not that this is exciting. Money comes in, it goes out as first-position loans against houses that need work, borrowers pay interest monthly, and investors are paid monthly by the 5th. The spread is the business. If you want something that moves, this is not it.

For accredited investors only. Past performance does not guarantee future returns. See 890capital.com for full disclosures. Offered only to verified accredited investors under Reg D Rule 506(c). This is not an offer to sell securities; any offering is made solely through the Private Placement Memorandum. Investments are illiquid, restricted, and involve risk of loss.

Most people searching for passive income for accredited investors are not short of income. They are short of time. A physician in year twelve of practice, an owner two years past selling the company, a retiree with a rollover sitting in cash — all three have money that needs a job and no appetite for a second one.

That distinction is the whole thing, because a good deal of what gets marketed as passive is simply work that hasn't shown up yet.

"Passive" is really a question about whose calendar the work lands on

Take the three routes people most often compare.

Rental property is the one everybody knows. It is also the one where the gap between the brochure and the Tuesday is widest. Somebody screens the tenant, takes the call about the water heater, chases the late payment, and decides whether to renew or turn the unit. A property manager moves that work off your calendar for eight to ten percent of collected rent, but the decisions still route to you, and so does the capital call when the roof goes.

Dividend stocks and income funds are genuinely passive in the work sense. Nobody calls you. The trade-off is that the income moves with the market, and the thing generating it is a company whose management, competitors, and capital structure you don't control and mostly don't see. A dividend is a board decision. It can be cut in a quarter.

Private credit — lending against an asset rather than owning it — sits in a different spot. You are not the landlord and not the shareholder. You are the lender, and what you hold is a contractual claim to interest at a stated rate for a stated term, secured by something specific.

None of these is better in the abstract. They fail differently, which is the useful way to compare them.

What accreditation actually unlocks

The accredited investor thresholds have not moved since Dodd-Frank set them in 2010: individual income above $200,000 for the past two years (or $300,000 jointly), or net worth above $1 million excluding your primary residence. Since 2020 there is also a credential path — holders of a Series 7, 65, or 82 qualify regardless of income or assets. The SEC's own summary is the plainest statement of the rules.

Worth knowing: adjusted for inflation, the $1 million figure would be closer to $1.4 million today, and the House passed a bill in December 2025 that would index the thresholds and add education- and experience-based paths. It is with the Senate, and the SEC has not finalized anything. For now the 2010 numbers govern.

What accreditation buys is access to offerings that are not registered with the SEC. That is the entire benefit and the entire risk in one sentence. These investments are illiquid, they are restricted, disclosure comes by private memorandum rather than public filing, and the diligence a registered offering would have done for you is now yours to do.

So the honest version of passive income for accredited investors is this: you gain access to a wider set of structures, and you take on the obligation to actually read them.

The questions worth asking about any income investment

Four of them, in the order they matter.

What am I actually holding? Equity, debt, or a share of a fund that holds one of those? In most private real estate deals the answer takes a paragraph — an interest in an LLC that holds an interest in a partnership that owns the building, sitting behind a bank loan whose terms you will never see. If the answer takes a paragraph, read the paragraph twice.

What has to go right for me to get paid? This is the question that separates structures. An equity position in an apartment building needs rents to rise, or cap rates to compress, or both. A first-position loan against a house needs one thing: the borrower finishes the work and sells or refinances. Shorter list, and every item on it is something you can check.

What happens when it goes wrong? Not if. Any lender originating for more than a year has loans that run long, borrowers who go quiet, and projects that need a workout. The question is what the paperwork lets you do about it, and whether the cushion between the loan and the value of the collateral is wide enough to absorb the answer.

When do I get my money back, and what does it cost to leave early? Illiquid means illiquid. If you might need the capital in eighteen months, a five-year note is the wrong instrument regardless of what it pays.

Where we fit, plainly

890 Capital makes first-position bridge and renovation loans to builders and investors buying houses that need work. Charleston first — most of the book is secured by property in Charleston, Berkeley, and Dorchester counties — and selectively beyond it, where the bar goes up rather than down.

The numbers, as of this week: 224 loans closed since April 2024, about $76.7 million funded, average loan roughly $342,000 on a six-to-nine-month term. Ninety-four of those have run the full cycle and returned capital. We cap loan-to-value at 75% and the book averages in the mid-60s, which means a borrower has to be wrong by more than a third before the collateral stops covering the loan.

Investors buy notes from the fund. The fund holds the mortgages. Notes pay 10.00% for one year, 10.50% for three, and 10.75% for five, distributed monthly by the 5th, with a $100,000 minimum. If you would rather compound than spend it, distributions can be reinvested. Retirement money can participate through a self-directed IRA — we wrote about how that works here.

It is a boring structure on purpose. There is no quarter where it gets exciting, and no market call embedded in it. We are not betting on Charleston appreciating or on rates falling. We are betting that a borrower who bought at the right basis can finish a house and sell it. The spread between what borrowers pay and what investors receive is the business.

If you want something that moves, this is not it. If what you want is a predictable monthly number from an asset-backed position, and you are willing to give up liquidity to get it, that is the trade on offer.

You can see how the mechanics work on our Easy Cash Flow page, read what we have been writing in our news section, or request investor access if you would like the offering documents. We verify accreditation before sending anything.

Offered only to verified accredited investors under Reg D Rule 506(c). This is not an offer to sell securities. Any offering is made solely through the Private Placement Memorandum. Investments are illiquid, restricted, and involve risk of loss. Past performance does not guarantee future returns. See 890capital.com for full disclosures.

We have the same conversation most weeks. Someone who has done well in their own business, or in medicine, or in a career they are now winding down, has heard that private real estate lending pays around 10% and wants to know what the trick is.

There isn't a trick. There is a structure, and it has real trade-offs. This hard money lending FAQ is the version of that conversation we would have across a table, written down.

Hard money lending FAQ: the basics

A hard money loan is a short-term loan secured by real property, made to a real estate operator rather than a homeowner. The borrower is usually buying a house to renovate and resell, or building one, and needs money faster than a bank will move.

We make those loans in the Charleston tri-county: Charleston, Berkeley, and Dorchester counties. Every loan is in first position, meaning our lien sits ahead of every other claim on the property. Loans run about six to seven months on average. Investors in the fund are not buying houses. They are funding the loans and collecting interest.

What happens if a borrower stops paying?

This is the first question, always, and it should be.

Three things protect the capital, in order.

First position. If a property has to be sold to recover the loan, we are first in line. Not second behind a bank, not sharing with a mezzanine lender. First.

Conservative loan-to-value. We cap loans at 75% of value and our average has run in the mid-60s. That gap is the borrower's own money, sitting underneath ours. An operator who has real equity at risk behaves differently from one who does not.

Being local. We lend in three counties on purpose. When a payment slips, someone from our team can be standing in the house that week. Most trouble at that stage is still fixable: a draw that stalled, a contractor who walked off, a resale price that needs adjusting. Problems get expensive when nobody notices for ninety days.

If a loan cannot be fixed, we hold the lien and work the recovery ourselves rather than selling the paper at a discount.

Across more than 150 first-position loans since we started in April 2024, we have had zero foreclosures. That is not because nothing has ever gone sideways. It is because we price the risk at the front end and we do not let a late loan sit.

Is my money locked up?

Partly, and on purpose.

We offer three terms: 10.00% for one year, 10.50% for three years, and 10.75% for five. The minimum investment is $100,000. You pick a term because the loans underneath you have terms, and a fund that lets every investor leave on Tuesday cannot make a loan on Wednesday.

What is not locked up is the income. Distributions are paid monthly, by the 5th, and they have been every month since inception. Never gated, never queued, never partial. If you would rather compound than spend, our dividend reinvestment plan rolls each distribution back into your position automatically.

There is an early-withdrawal path under certain conditions, subject to fees. It exists because life happens. It is not the plan, and if you are likely to need the principal back inside a year, this is the wrong vehicle. We would rather say that on the phone than after the wire clears.

What is the catch on a 10% return?

Not a catch. A trade.

You are the lender, not the owner. As the lender you get a fixed rate, a first-position mortgage on real property, and a payment schedule. What you give up is the upside. If an operator buys a house well, renovates it sharply, and clears a large profit on the resale, that profit belongs to the operator. You get your rate.

That trade is the entire product. It sits between two things most people already own: less volatile than equities, better yielding than a CD or money market. It is not a substitute for either. It is the boring middle, and boring is the point.

Is this legal? Who is watching?

Yes. The fund is a Regulation D 506(c) private placement, which means we are permitted to talk about it publicly but can only accept accredited investors. Offering documents were drafted by a securities law firm and an outside accounting firm handles financial oversight. We are members of the American Association of Private Lenders.

If you want to understand what accreditation means, or what questions to ask any private offering before you fund it, the SEC's investor education site is the right starting point: investor.gov. We would rather you check us against a neutral source than take our word for it.

Why only Charleston?

Because underwriting is local knowledge, and local knowledge does not scale by adding a spreadsheet column.

Our real estate side has sold more than a thousand homes here and completed hundreds of renovation projects. That means when an operator brings us a resale number, we know whether that street supports it, whether that school zone supports it, and whether that number was achievable last spring but not this fall. A lender three states away is reading comps. We are reading the block.

The moment we lend somewhere we do not know that well, our best protection disappears and all we have left is the paperwork.

How do you get paid, and how do I know the numbers are real?

The fund earns the spread between what borrowers pay and what investors are paid. Our interests line up: we are only paid when loans perform, and a foreclosure costs us more than it costs any single investor.

Investors get monthly statements and a monthly fund update covering loans funded, loans paid off, capital deployed, average loan size, average loan-to-value, and distributions. If a number ever looks wrong, ask. We would rather answer an uncomfortable question than have you guessing.

What would have to happen for me to lose money?

Most funds will not put this in writing. Here it is.

You would need a property to sell for less than our loan balance plus recovery costs. Given a mid-60s average loan-to-value, that means a decline of more than a third in the value of a specific Charleston-area home, before we could act on it. And it would need to happen across enough loans at once to overwhelm the interest the rest of the portfolio is producing.

That is a severe scenario, not an impossible one. Real estate can fall. Anyone who tells you a real estate credit fund is risk-free is either careless or selling something. What we can tell you is where the risk actually sits, and what we do to keep it small: first position, conservative leverage, short duration, one market we know, and a hard no on deals whose exit is a hope rather than a plan.

Still have a question?

If yours is not answered here, ask it directly. The questions that make us uncomfortable are usually the ones worth answering in public.

Our monthly numbers go out to the Easy Cashflow list, past fund and market updates are in the news archive, and accredited investors can start a conversation at request investor access.

For accredited investors only. Past performance does not guarantee future returns. See 890capital.com for full disclosures.

Charleston tri-county real estate investing is where most of 890 Capital's capital works. Not all of it — we lend elsewhere in the Southeast and occasionally beyond — but the majority of our book is secured by property in Charleston, Berkeley, or Dorchester county, and that concentration is deliberate rather than incidental.

Investors ask about it more than almost anything else. If the model works here, why not run it everywhere? And when we do lend outside the region, what changes? Both questions have the same answer underneath them, and it has nothing to do with the loan documents.

What Charleston tri-county real estate investing actually requires

An appraisal tells you what a property is worth on the day someone looked at it. It does not tell you the road behind it takes on water in a hard rain. It does not tell you the last flip on that block sat for seven months before it cleared. It does not tell you the contractor named on the permit has walked off two jobs this year.

Those facts decide whether a loan gets repaid, and none of them arrive in a report you can order. They are local, they are current, and they are held by people who work that market every week.

That is the argument for concentration, and it runs against the instinct most investors bring from public markets, where spreading out lowers risk. In first-position private lending at our size, spreading thin across markets you do not know does the opposite. It is how a lender ends up holding a note on a house nobody in the office has ever seen.

Depth in a home market buys four specific things.

Valuation you can check yourself. Not what the comparable sales say, but what that street does. What the house two doors down actually closed at. What a roof costs this month, with these subcontractors, in this county.

Inspections that are a drive, not a vendor. Draw inspections happen in person. When a payment slips, someone from our team is standing at the property that week rather than scheduling a third party who has never seen it.

Operators with a track record we watched. Many of our borrowers are repeat. We have seen them finish. That is underwriting you cannot buy from a credit bureau.

A list of streets we will not touch. Knowing where not to lend is worth as much as everything above it combined.

Four submarkets, and why they are not interchangeable

The tri-county reads as one market on a spreadsheet. It is not.

Summerville is volume. Older stock off Main and out toward Ladson, a steady supply of houses in the 1,200 to 1,600 square foot range that need a kitchen, a roof, and an operator disciplined enough to stop there. Our most predictable exits sit here. It is also where we decline most often, because it is the easiest market in the region to overpay in.

North Charleston is the one people get wrong from a distance. It is not one market. It is several, and they change over a few blocks. Park Circle is not Chicora. Both read as North Charleston on a comparable sales sheet. We underwrite them as different towns, because that is what they are.

Goose Creek is newer and flatter. Fewer surprises behind the drywall, and buyers who want a finished house rather than a project. Lower margin, lower drama. We like it for exactly that.

Johns Island carries the most upside and the most ways to lose. Septic systems, flood exposure, wells, setback rules, and roads that were never built for what is going up on them. We lend there. The diligence runs longer and the loan-to-value comes down.

None of that appears on a comparable sales report. All of it changes how a loan gets structured, priced, and monitored.

When we lend outside the tri-county

We do lend beyond the home market, and it would be misleading to imply otherwise. What changes is not the paperwork. It is what has to be true before we fund.

Outside the tri-county, the local read has to be replaced by something else that carries equivalent weight: a borrower we have funded through a full cycle and watched exit, a sponsor whose record we know first-hand, or an asset simple enough that proximity matters less than structure. In practice that raises the bar rather than lowering it, and it means our out-of-area lending grows slowly and by exception.

What we do not do is fund a deal because the numbers looked good in an email from a market nobody here has worked.

What the concentration costs us

It would be dishonest to present a home-market bias as free.

We pass on good deals. Our pipeline is smaller than it would be if we treated the whole Southeast as equally underwritable. If Charleston softens, the weighting works against us before it works for us. Those are real costs, accepted on purpose rather than by default.

The offsetting position is that our risk is secured rather than merely spread. Every loan is a first-position mortgage on real property. Loan-to-value is capped at 75% and has averaged in the mid-60s, which means meaningful owner equity sits underneath us before a dollar of investor capital is exposed. Across more than 200 loans since April 2024, we have had zero foreclosures. Not because nothing goes wrong, but because problems get found early by people who are close enough to see them.

How this shows up for investors

For an investor, the practical effect is boring, which is the point. Notes pay 10.00% for one year, 10.50% for three, and 10.75% for five. Distributions go out monthly, by the 5th. The rate does not float with how the quarter went.

That predictability is downstream of where the capital sits. A lender underwriting markets it does not know either prices the uncertainty in at the front end or absorbs it later. We would rather concentrate where we can drive to the collateral, and keep the payment schedule the least interesting thing an investor has to think about.

If you want the mechanics of how the income works, Easy Cashflow walks through it. Recent fund activity is in our news. Accredited investors can request access here. For general background on evaluating private offerings, the SEC maintains resources at investor.gov.

For accredited investors only. Past performance does not guarantee future returns. See 890capital.com for full disclosures.

With about four months left in the year, here's our read on the Charleston real estate market in 2026, from the seat we actually sit in: a first-position lender writing short-duration loans on real property in the tri-county.

This isn't a forecast. We don't get paid to predict where prices go. We get paid to underwrite loans that hold up whether the market goes up, sideways, or down. So what follows is what we're seeing in the deals crossing our desk, and how it's shaping the loans we say yes to.

What the Charleston real estate market looks like in 2026

Three things stand out this summer, and none of them are dramatic. That's usually a good sign.

Inventory has loosened. Not a flood, but there are more homes sitting a little longer than they were a year ago. Buyers have marginally more room to negotiate. For a lender, looser inventory matters less than it does for a flipper: it changes how fast a finished home sells, not whether a conservatively underwritten loan gets paid back.

New-construction starts are running slower than this time last year. Higher financing costs and cautious builders have pulled some ground-up supply out of the pipeline. The knock-on effect is that move-in-ready, renovated homes are more competitive on the buyer side, because there's less brand-new product competing with them.

Right-priced product is still selling. The homes that move are the ones priced honestly for their finished condition and location. The ones that sit are the ones priced on last year's optimism. That gap, between honest pricing and hopeful pricing, is wider in 2026 than it was in the run-up years, and it's the single most useful thing to watch.

What it means for how we lend

Our model doesn't change with the weather, but the market does tell us where to be careful.

We lend first-position, every time. If a loan doesn't pay, we're first in line on the property, not behind a bank. In a choppier market, that seniority is the whole point.

We cap loan-to-value at 75% and average in the mid-60s. That cushion is what absorbs a soft sale or a price cut. When the finished-home market gets pickier, the LTV cushion is what stands between a slow sale and a loss.

We want a funded, credible exit before we wire a dollar. That has always been our first underwriting question, and in a year where honest pricing separates the deals that sell from the ones that stall, it matters more, not less. An operator who buys right and prices the exit realistically still has a clear path. An operator counting on the market to bail out a too-high purchase does not, and that's the loan we pass on.

The numbers behind the discipline

Since we started in April 2024, 890 Capital has deployed more than $56M across 150-plus first-position loans in the Charleston tri-county. Zero foreclosures. Average loan-to-value in the mid-60s against a 75% cap. Investors have received monthly distributions on time, by the 5th, every month since inception.

Deep into 2026, that record reads exactly the same as it did at the start of the year. In a business where "boring and predictable" is the goal, an unchanged record through a shifting market is the result we want.

Where the rest of 2026 goes

We're not going to pretend to know. What we do know is what we'll keep doing: lend first-position, keep LTV conservative, underwrite the Charleston tri-county block by block, and require a real exit before funding. A market that rewards discipline over optimism is, frankly, the market we prefer to lend into.

If you want to see how this translates into an income stream, our newsletter walks through the fund each month. Past market and fund updates live on the 890 Capital blog. Before investing in any private offering, it's worth reviewing the basics of private investments and accreditation at investor.gov. Accredited investors who want the full picture can request investor access.

For accredited investors only. Past performance does not guarantee future returns. See 890capital.com for full disclosures.