What is Yieldstreet
Yieldstreet is an online service that offers investors the ability to access alternative investments in commercial real estate, marine projects, and art. Investment minimums start at $10,000.
Our Take
Yieldstreet allows investors to take part in crowdfunding for a broad array of alternative investments, inclusive of real estate, commercial, legal, and art. Most offerings are open only to authorized investors. Jump to:
| FEES: | 0% – 2.5% |
| ACCOUNT MINIMUM: | $500 |
| PROMOTION: | None |
Pros & Cons
Pros
- Access to real estate, commercial, maritime, legal, and artistic investments.
- Opportunity for individuals to invest in privately structured loan agreements.
- Asset-backed investments that can provide some protection in the event of a default.
Cons
- Highly illiquid investments.
- Most investments are open only to accredited investors.
- There are limited offers.
Full Review
While some crowdfunding real estate sites allow you to buy a portion of commercial real estate, Yieldstreet has instead crowdfunded the loan taken to cover the investment – and many other deals.
Yieldstreet launched its first litigation financing offer in 2015, which allows investors to borrow money to cover costs before the expected decline in business comes. He excels in a variety of offerings, including financing the offers of industrial and residential real estate, commercial loans such as cash advances from buyers, the purchase of oil tankers and the arts. Investors receive interest payments and return on principal for the duration of the loans.
While most trades are for accredited investors only, Yieldstreet launched the Prism fund in August 2020, which is open to non-accredited investors with a minimum investment of $ 500.
in November 2021, more than $ 2 billion was invested in the platform.
Yieldstreet features you should know
Minimum Investment: The minimum investment starts at $ 500, the Company states that the minimum investment is usually $ 10,000, but the offer may vary. Some previous deals have set a minimum investment of up to $ 60,000. It offers its short-term bonds for Prism Fund and Yieldstreet.
Offered Investments: Yieldstreet focuses on securing debt investments in various real estate, shipping, arts, commercial loans and litigation.
Each investment offer is displayed on the company’s website with key details, including the total size of the offer, the minimum and maximum investment received, the duration, and the expected annual return on investment. Yieldstreet also describes why the company wants the investment, the costs, the risks (and how it seeks to reduce those risks), and the expected repayment schedule.
Asset-Based Investments: All Yieldstreet offerings are backed by underlying assets, such as real estate, maritime assets or legal settlement, which provides the company with a way to recover any outstanding loans. However, the return on your investment is not guaranteed and all investments involve risk, including the possibility of losing the main investment.
Fees: Yieldstreet collects an annual management fee that ranges from 0% to 2.5% on average. Yieldstreet may also charge the originator a listing fee.
Other types of investments may also incur a flat annual fee of $ 100 to $ 150 in the first year and $ 30 to $ 70 each subsequent year, depending on the structure of the business. These costs are deducted from the initial interest payment. These fees are published on the individual pages of the offer.
Most offers are for accredited investors only: Most Yieldstreet investment transactions are only available to accredited investors. The Securities and Exchange Commission defines these investors as investors with net worth of more than $ 1 million (excluding the amount of primary residence) as annual income in each of the last two years of less than $ 200,000 for individuals or $ 300,000 for couples.
Funds for non-accredited investors: In 2020, Yieldstreet launched Prism Fund, a fixed income portfolio of five asset classes: arts, commercial, legal, private corporate loans, real estate, and corporate preferred bonds. The fund pays quarterly distributions set at an annual rate of 8%, the company said. Investors will pay a maximum of 1.5% of the annual fee for the fund. The fund closes in March 2024, but the company states that the liquidation of the fund’s assets can take a maximum of 12 months.
Provides a self-governing IRA: You can invest in Yieldstreet through a self-governing IRA. The IRA must be established through Yieldstreet, which uses IRA Services as a pending intermediary. You can also invest in a trust, LLC, such as a 401 (k) solo established as a trust as an LLC.
Illiquid investments: Once you invest in Yieldstreet, the investment cannot be repaid for the duration of the offer, which may exceed the planned “target duration”, notes Yieldstreet. So once you have the money, you are determined to see the investment.
Limited investment availability: Each transaction is open to investments for a limited time on a first-come, first-served basis, so you can stay unattended even if you arrive at the site ready to invest.
Is Yieldstreet Right For You?
Yieldstreet offers individual investors the opportunity to invest in privately structured loan agreements, offers that are usually reserved for hedge funds and institutional investors.
One caveat: The basic rule is to invest a maximum of 10% of your portfolio in alternative investments offered by Yieldstreet. It is often considered prudent to focus most of your portfolio on index funds rather than mutual funds, which will give you a broad and diverse exposure to the stock market.