The bottom line: Yieldstreet allows investors to participate in crowdfunding for a wide array of alternative investments, including real estate, commercial, legal and art. Most offerings open only to accredited investors.
Pros & Cons
- Access to real estate, commercial, marine, legal and art investments.
- Ability for individuals to invest in private structured credit deals.
- Investments backed by assets, which may provide some protection in event of default.
- Highly illiquid investments.
- Most investments open only to accredited investors.
- Limited offerings available.
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While some crowdfunded real estate sites allow you to purchase a piece of commercial real estate properties, Yieldstreet instead crowdfunds the debt taken on to finance those investments — and a host of other deals.
Yieldstreet launched its first offering in 2015 in litigation finance, which pairs investors with a plaintiff looking to borrow cash to cover expenses before an expected lawsuit settlement arrives. It has since branched out into a variety of offerings, including financing industrial and residential property deals, commercial loans such as merchant cash advances, the purchase of oil tankers and fine art. Investors earn interest payments and return of principal investment over the life of the loans (although there’s always a risk of default).
While most deals are for accredited investors only, Yieldstreet launched the Prism Fund in August 2020, which is open to nonaccredited investors with a minimum investment of $5,000.
As of October 2020, more than $1.5 billion had been invested on the platform. Yieldstreet was ranked 46th on the 2020 Inc. 5000, a list of the fastest-growing privately held companies in the U.S.
Yieldstreet is best for
Accredited and nonaccredited investors looking to diversify their portfolio.
Investors who don’t need their cash back for years.
Investors looking for income-producing investments.
Yieldstreet at a glance
Most offerings available only to accredited investors.
Minimums vary by investment, but typically begin at $10,000. Prism Fund minimum investment is $5,000.
No redemption program for most investments (Prism Fund may be available for redemptions in June 2021).
1% to 2.5% management fee. Additional fees may apply.
Real estate, commercial, marine, legal and art financing deals.
This is our judgement of how easy it is to find critical information on the Yieldstreet website, including platform fees, account minimum and redemption options (if offered).
This is our judgement of how easy it is to find critical information about investment offerings, including investment fees, risks, risk mitigation efforts, the process for vetting investments and how investment returns are distributed to investors.
Customer support options
Phone and email support.
Yieldstreet features you should know
Minimum investment: The company says the minimum investment is typically $10,000, but that can vary by offer. Some past deals have set investment minimums as low as $5,000 and as high as $60,000. For the Prism Fund, minimum investment begins at $5,000.
Investments offered: Yieldstreet focuses on securing debt investments across a variety of real estate, marine, art, commercial loan and litigation deals.
Each investment offering is featured on the company’s website with important details, including the total offering size, minimum and maximum investment accepted, duration and expected annual investment return. Yieldstreet also details why the company likes the investment, the expenses, risks (and how it is attempting to mitigate those risks) and expected time schedule for repayments.
Asset-based investments: All offerings on Yieldstreet are backed by an underlying asset such as real estate, marine vessels or a legal settlement, which gives the company a way to potentially recoup defaulted loans. Still, the return of your investment is not guaranteed, and all investing involves risk, including the possibility of losing your principal investment.
Fees: Yieldstreet collects an annual management fee that ranges from 1% to 2.5% on average. Yieldstreet may also charge the originator a listing fee.
Some types of investments may also carry a flat annual fee that ranges from $100 to $150 the first year, and $30 to $70 each subsequent year, depending on the structure of the deal. These expenses are deducted from initial interest payments. These fees are disclosed on the individual offering pages.
Most offerings for accredited investors only: Most investment deals on Yieldstreet are available only to accredited investors. The Securities and Exchange Commission defines these investors as those with a net worth of more than $1 million (not including the value of a primary residence) or annual income in each of the last two years of at least $200,000 for individuals or $300,000 for a couple.
New fund for nonaccredited investors: In August, Yieldstreet launched its new Prism Fund, a fixed-income portfolio across five asset classes: art, commercial, legal, private business credit, real estate and corporate preferred bonds. The fund will pay quarterly distributions set at an annualized rate of 7%, the company says. Investors will pay 1.5% in annual fees for the fund. The fund’s termination date is March 2024, but the company notes that liquidation of fund assets may take up to an additional 12 months.
Offers a self-directed IRA: You can invest in Yieldstreet through a self-directed IRA. The IRA must be set up through Yieldstreet, which uses IRA Services as the custodian broker. You can also invest with a trust, LLC or a solo 401(k) that is set up as a trust or LLC.
Illiquid investments: Once you commit to a Yieldstreet opportunity, the investment can’t be redeemed for the duration of the offering, which can extend beyond the planned “target duration,” Yieldstreet notes. So once your money is in, you’re committed to seeing the investment through. Investors in the Prism Fund, however, may have an opportunity to redeem their shares in June 2021, the company says.
Limited availability of investments: Each deal is open for investment for a limited period of time on a first-come, first-served basis, so you may walk away empty-handed, even if you come to the site ready to invest.
» Compare before investing: Best real estate crowdfunding platforms
Is Yieldstreet right for you?
Yieldstreet offers individual investors an opportunity to invest in private structured credit deals, offerings usually reserved for hedge funds and institutional investors.
One caution: A rule of thumb is to invest no more than 10% of your portfolio in alternative investments such as the ones Yieldstreet offers. It's generally considered wise to focus the bulk of your portfolio on index funds or mutual funds, which give you broad and diversified exposure to the stock market.
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