Cue Earth, Wind & Fire — we’ve made it to September, and you can feel fall in the air! Football, pumpkin spice lattes, apple picking, flannel, and interest rate cuts—what more could you ask for? Here’s the latest from 890 Capital.

Fund Performance & Updates

The Fund's current average loan-to-value (LTV) across all outstanding loans is 69.6%, with an average loan size of $236,454. We had one borrower complete his fix-and-flip project ahead of schedule, successfully selling the property and repaying the loan—two months before maturity. This is the second loan to be fully repaid in the last month.

890 Capital has 12 outstanding loans, with all borrowers making payments on time, and zero defaults in the portfolio.

On the investor side, we’ve surpassed $50,000 in interest paid to investors and are quickly closing in on $100,000. We look forward to the day, in the near future, when we are paying our investors $100,000+ per month!

We are always seeking referrals. If you know anyone who may be interested in working with us, please let us know! To make it easier on you, we’ve created this short YouTube explaining what 890 Capital does. Share it with a friend and follow us on Facebook, Instagram, YouTube and LinkedIn for all of the latest updates!

Market Insights

Last month, we discussed investing with 890 via tax-advantaged IRAs and the uncertainty in the public markets. While uncertainty remains, a recent study caught our attention, examining how sports gambling impacts household savings. Conducted by researchers from the University of Kansas, Northwestern University, and Brigham Young University, the study revealed a negative influence, especially on “financially constrained households.”

The findings suggest that the legalization of sports gambling has reduced net investments by bettors by nearly 14%. Every dollar spent on sports betting reduces net investments by $2.13. What does this mean? Instead of safely investing in a steady, asset-backed portfolio like 890 Capital, some households are dipping into their savings to bet on sports.

Looking ahead, we have September 17th and 18th circled on our calendar as we await the Federal Reserve’s decision on interest rate cuts. The Fed is expected to lower rates by at least 25 basis points, which could offer some relief to the broader economy. However, these cuts may not immediately reduce mortgage rates, as much of the expected decrease has already been priced in. CoreLogic's Chief Economist, Selma Hepp, projects that mortgage rates will remain in the 6% range throughout the year.

What won’t change with these cuts? Our returns to investors. Regardless of whether the Fed cuts 25 or 50 basis points, 890 investors will continue earning a 10% annual yield, paid monthly.

Investor Protection

One of the most common questions we get from prospective investors is:

How is 890 Capital, and my investment, protected in a downside market?

• First Position Mortgages: 890 takes first-position mortgages on every asset we lend against. This means all loans are secured and cross-collateralized by a pool of hard real estate assets in the fund.
• Loan-to-Value (LTV) Limits: We only lend up to a maximum of 75% LTV to account for potential market corrections.
• Resale Capability: We maintain a direct relationship with an established real estate team that can quickly step in to fix and resell projects that borrowers cannot complete.
• Target Market: 890 lends to homes in the $100-700k after-repair-value (ARV) range. By staying within this market segment, we avoid exposure to the ultra-high-end market. If market dynamics change, we expect to first see corrections in the luxury segment, allowing us to adjust our underwriting accordingly.
• Asset Security: Investors are secured by the entire portfolio of assets in 890’s fund. If one asset underperforms, the remaining assets serve as collateral for investor protection.

Thank you for your continued support of 890 Capital. If you have any questions or would like to discuss your investment, please don’t hesitate to reach out. We’re here to ensure a profitable and secure journey for all current and future investors.

Warm regards, 

Frank Conway & Caleb Pearson

890 Capital