Benzinga and Yahoo Finance LLC may earn commissions or revenue from certain articles through the links below.
If you’ve spent any time looking for places to park money lately, you’ve probably been relying on the same numbers as everyone else: 4 to 5 percent coming from high-yield savings accounts or short-term CDs, maybe a little more if you shop aggressively.
This range is starting to look like the new standard for “safe” money.
What fewer people realize is that there is a distinct segment of the market (private real estate lending) in which some funds target income closer to 8%, with returns determined by interest payments rather than property appreciation.
It is the space in which Private credit fund arrived operates in.
Since the launch, the fund paid an annualized dividend of 8.1% or moregenerated almost entirely by interest on short-term real estate loans.
It’s not risk-free and it’s not as liquid as a savings account, but for investors willing to accept these tradeoffs, it shows how private credit can far outperform many traditional return options.
Basically, the fund lends money to professional real estate operators in the form of short-term loans, typically lasting six to 36 months.
Individual loans are typically between $100,000 and $500,000 and are used for projects such as renovations, rehabilitations, bridge financing between purchase and sale or basic residential construction.
Rather than concentrating risk on a single transaction, the fund simultaneously holds dozens of loans in different markets.
Each project represents only a small part of the overall portfolio, which helps spread the risks if an individual loan encounters difficulties.
Importantly, these loans are secured by residential real estate in a first lien position. This means the fund is the first to be repaid if a borrower defaults and the property must be sold.
Arrived also underwrites loans with conservative after-repair loan value targets (often below 70%), creating a cushion between what is loaned and the estimated value of the finished property.
The goal is to produce something closer to a bond-like income streameven if it is still a private loan, and not a government bond or a guaranteed product.
According to Arrived’s own information, the Private Credit Fund has distributed annualized dividends of approximately 8.1% since its launch. The focus here is on income, not growth.
Returns depend almost entirely on interest payments, with little expectation of stock price appreciation.
Dividends are paid monthly, which means investors view income as arriving in a steady stream of small cash payments rather than a single annual payment.
Using a simple example, an investment of $10,000 at an annualized rate of 8.1% would generate approximately $810 per year in pre-tax income, assuming future performance resembles the historical figure – which, of course, is never guaranteed.
Arrived also reported that the fund aims to maintain its yield around 2 to 3 percentage points above short-term Treasury yields over time.
This means that payments can increase or decrease as interest rate conditions change, rather than remaining fixed forever.
The return comes from the interest paid by borrowers on their short-term loans.
These loans typically carry higher rates than traditional bank mortgages because they finance more complex or urgent projects – rehabilitation, construction or transitional properties that banks often don’t touch.
After accounting for defaults, fees and operating costs, the remaining net interest is distributed to investors as cash dividends.
Loan underwriting focuses on a few core pillars: experienced borrowers with established track records, careful sizing of the loan relative to the value of the property, and first-rate security on the underlying real estate.
Together, these factors are designed to support a relatively stable revenue stream, although risks such as project delays, borrower issues, or a downturn in the real estate industry can still impact results.
This is where expectations need to be clear. Unlike a savings account or money market fund, the Private Credit Fund has limited liquidity.
Investors are generally expected to hold their securities for approximately six months before requesting redemptions, and withdrawals are generally processed on a quarterly basis, subject to available liquidity and manager approval.
There is no FDIC insurance, and even though loans are guaranteed and conservatively underwritten, the capital is still at risk. Defects may occur, property values may fall, and returns may vary.
Because of this profile, this fund tends to be best suited to investors who already have their true emergency fund, who want higher income than currently offered by government bonds or CDs, and who are comfortable trading cash and safety for yield.
It also appeals to people who like the idea of real estate-backed, interest-driven returns, rather than relying on real estate appreciation or stock market growth.
This is not a substitute for cash or low-risk government bonds.
It falls somewhere in between: a higher-yielding option for money you don’t need immediately, but still want to generate income.
For investors looking to move beyond the 4-5% world without fully diving into stocks or speculative assets, a private credit fund targeting 8% can be a useful building block.
Not because it’s flashy or guaranteed, but because it offers a clearer income profile than many alternatives, provided you’re honest about the risks and the lock-in that comes with it.
This item This income fund has generated a consistent 8.1% annualized dividend – and it’s open to non-qualified investors originally appeared on Benzinga.com
© 2026 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
