Yieldstreet offers accredited investors a platform to access alternative investments in various asset classes, providing opportunities to diversify beyond traditional stocks and bonds. In this comprehensive review, we’ll explore the features, benefits and potential drawbacks of Yieldstreet, helping you determine whether it’s the right fit for your investment portfolio.
Yieldstreet offers alternative investments in various asset classes — including commercial real estate, marine projects, litigation finance and art, among others — to both accredited and non-accredited investors. Most investments require a $10,000 minimum, but limited opportunities exist with minimums as low as $5,000. Overall, we think YieldStreet is best for intermediate to advanced investors who are seeking portfolio diversification and passive income, and who can hold their investments long-term.
- Some of the investment options are open to non-accredited investors.
- Multiple asset classes are available.
- Offers funds that contain multiple assets for easier diversification.
- Most investments have high minimums and require accredited investor status.
- The available investment opportunities are often limited and can sell out fast.
Since its inception in 2015, Yieldstreet has invested over $3.4 billion across these various asset classes.
Yieldstreet offers two primary types of investments, catering to different investor preferences and risk profiles: funds and direct investments.
- Funds. Funds pool investor capital and allocate it across multiple assets within a specific asset class or multiple asset classes. One example is their Prism Fund, which contains assets from many different alternative asset classes, from real estate to fine art.
- Direct investments. Yieldstreet also offers direct investments in individual assets, allowing investors to hand-pick specific opportunities that align with their investment objectives and risk tolerance. For example, you can invest directly in a specific commercial real estate project.
The platform has delivered an impressive net annualized return of 9.7% since 2015.
Yieldstreet Investment Options & Process
Yieldstreet has strict guidelines and a vetting process for the assets that are allowed on the platform.
The vetting process consists of five stages:
- Originations and screening. To minimize risk, Yieldstreet’s originations team conducts a mthorough screening of investment opportunities and partners, avoiding those with a history of material litigation or government investigations.
- Diligence. The investment teams assess the track record, experience and reputation of originators and opportunities in their respective asset classes, while evaluating their long-term potential and alignment with Yieldstreet’s investment ethos.
- Assessment. The respective Yieldstreet investment team responsible for the relevant asset class conducts an in-depth evaluation of various components of the investment opportunity, including investment thesis, collateral valuations, borrower/sponsor information, and more.
- Committee review. Each investment opportunity must pass through additional checkpoints and committees to identify and address any potential risks before moving forward.
- Investor decision. Once an investment opportunity has made it to the Yieldstreet platform, it is up to you to make an informed decision based on the comprehensive information provided.
According to Yieldstreet, less than 10% of investment opportunities presented to the company make it onto the platform.
Once approved, Yieldstreet places the opportunity on the platform with details such as minimum investment, term, payment schedule and tax document type.
Many of the investments found on Yieldstreet are available on a first-come, first-served basis and sell out quickly. Therefore, there’s no guarantee that the exact asset class or opportunity you’re interested in will be available when you’re ready to invest.
To give you an idea, the following investment opportunities were available at the time of publication.
|Asset Class||Investment Name||Description||Min. Investment||Term||Payment Schedule||Tax Document|
|Legal||Pre-settlement Plaintiff Funding II||Diversified pool of secured pre-settlement funding advances.||$50K||30 mos.||Monthly||K-1|
|Other||ST Income Notes Diversified Portfolio XXIII||Diversified portfolio targeting quarterly income payments.||$15K||8 mos.||Quarterly||1099-INT|
|Real Estate||Park45 Multi-Family Equity||Class-A multi-family property in Houston, TX.||$15K||33 mos.||Quarterly||K-1|
|Private Credit||Consumer Goods Leasing Portfolio I||Secured portfolio of 1,000+ consumer leases.||$10K||34 mos.||Weekly||1099-INT|
|Real Estate||Savannah Build-For-Rent Portfolio I||Dedicated rental community of 142 to-be-built single family homes.||$15K||48 mos.||Quarterly||K-1|
|Real Estate||Portland Multi-Family Debt||Loan backed by under construction multi-family property.||$10K||25 mos.||Monthly||1099-INT|
|Art||Art Equity Fund IV||Equity in diversified fund of globally acclaimed artworks.||$15K||4.5 yrs.||Event-based||K-1|
|Private Credit||Consumer Lender Corporate Loan I.B||Secured loan for financial services company growth.||$15K||13 to 37 mos.||Weekly||K-1|
|Real Estate||Growth & Income REIT||Exposure to multiple commercial real estate properties.||$5K||Quarterly||Quarterly||1099-DIV|
|Multi-Asset Class Fund||Yieldstreet Prism Fund||Diversified private markets fund.||$10K||Quarterly||Quarterly||1099-DIV|
In addition to the above opportunities, the platform offers a high-yield deposit account through Evolve Bank & Trust that pays a 3.25% APY and is FDIC Insured up to $1,000,000.
Who Can Invest with Yieldstreet, and What are the Requirements?
Most investment offerings on the platform are accessible only to accredited investors due to regulatory requirements, with minimum investments typically ranging from $10,000 to $50,000.
However, some opportunities — specifically, the Yieldstreet Growth & Income REIT — are open to non-accredited investors with a minimum investment of $5,000.
How to Choose and Evaluate Offerings on Yieldstreet
The Prism Fund and Growth & Income REIT offered by Yieldstreet are tailored more toward hands-off investors who are seeking broad diversification.
The Prism Fund, in particular, offers a diversified portfolio across multiple asset classes.
Similarly, the Growth & Income REIT focuses on a diverse set of real estate investments, allowing investors to benefit from different segments of the real estate market.
On the other hand, direct investments require a more hands-on approach, as they involve higher levels of risk due to their more concentrated nature.
You’ll need to perform extensive due diligence to understand the specifics of each offering and evaluate the associated risks. While direct investments can offer potentially higher returns, they also demand a greater degree of investor involvement and knowledge.
Once you’re signed up, Yieldstreet lets accredited and non-accredited investors see all the assets on the platform and start performing the due diligence process.
Once you select a specific investment, you’ll access much more information about the particular investment.
You’ll find details such as the investment overview, premise, strategy, expected returns, and fees here.
Each opportunity then comes with an offering memorandum.
It’s here you’ll find:
- Deal structure. How the investment is structured, the legal entities involved, and the relationship between the various parties.
- Risk factors. Potential risks associated with the investment, allowing you to assess whether the risk-reward ratio aligns with your investment goals and risk tolerance.
- Due diligence report. Insights into the thorough background checks and research conducted by Yieldstreet on the investment opportunity, covering aspects like the borrower’s creditworthiness and the asset’s valuation.
- Financial projections. Expected cash flows, income and expenses to help you gauge the investment’s potential performance.
- Exit strategy. Explains the planned approach for realizing returns on the investment, such as selling the asset or refinancing the loan.
Overall, this is where a lot of the investment analysis comes in, and why direct investing on the platform is better for intermediate to advanced investors who can objectively value an investment based on these details and their goals.
As an investor with Yieldstreet, you’ll encounter two types of fees:
- Management fees. Yieldstreet charges these fees for managing and overseeing the investment. Management fees typically range between 1-4% annually. For example, if you invest $10,000 in an offering with a 2% annual management fee, you would pay $200 annually for Yieldstreet’s management services.
- Flat annual fees. These are fees investors pay each year for expenses related to the investment. The amount varies depending on the legal structure of the offering (either SPV or BPDN structure), but on average, they’re around $100. These fees are paid from the initial interest distributions you receive from your investment.
The target return displayed for each offering is net of fees.
Yieldstreet also generates revenue from listing fees. These fees are charged to the person or company that brings the investment opportunity to Yieldstreet. While these fees don’t directly impact investors, they are important to Yieldstreet’s overall revenue model.
Liquidity on Yieldstreet
Liquidity varies across the funds and investments offered on Yieldstreet.
- Illiquid holding. Some investments on Yieldstreet are illiquid, meaning you must maintain your position until the investment expires. In this case, you have no option to sell your shares prior to maturity.
- Limited liquidity. Some funds, like the Prism Fund, offer limited liquidity with no guarantees. How this works is that the Prism Fund’s board of directors can repurchase shares from investors. However, there are limitations: no more than 20% of shares outstanding from the previous calendar year can be repurchased, and a maximum of 5% can be repurchased each quarter. If the number of shares submitted for repurchase exceeds the fund’s intended repurchase amount, the shares will be repurchased on a pro-rata basis instead of a first-come, first-served basis.
Remember that an investment’s maturity date may not always expire when projected. In some cases, investments can extend beyond their projected maturity dates and remain illiquid until they’re eventually resolved.
Real Estate Alternatives to Yieldstreet
While Yieldstreet provides a range of alternative investments, its higher minimums and broader focus across multiple asset classes may not be the perfect fit for those seeking a platform with numerous options solely within the real estate sector.
Arrived is a platform allowing investors to buy shares in individual rental properties, earning passive income from rent and potential appreciation. Arrived does not require accredited investor status.
CrowdStreet is a real estate investing platform that specializes in connecting accredited investors with commercial real estate investment opportunities. As one of the many accredited investor opportunities available today, the platform offers a variety of investment types, such as individual deals, funds, and portfolios, allowing investors to diversify their real estate holdings.
|Minimum investment||$5,000 – $10,000||$100||$25,000|
|Asset classes||Real estate, litigation finance, etc.||Real estate only.||Real estate only.|
|Accreditation requirements||Primarily for accredited investors, with limited opportunities for non-accredited investors.||No accreditation required.||Accredited investors only.|
|Our review||Arrived Review||Crowdstreet Review|
For complete coverage of all the real estate investing platforms, see our rankings of the best crowdsourced real estate platforms.
Other Alternatives to Yieldstreet: Percent and Masterworks
As Yieldstreet offers a diverse set of alternative investments outside of real estate, platforms that focus solely on these individual sectors, such as Percent and Masterworks, are further alternatives.
Percent is an online investment platform specializing in private business debt offerings. Investors can access various debt investment opportunities with lower minimum investments and a wider selection of business types compared to Yieldstreet.
Masterworks is a platform that allows investors to buy shares in fine art. The big difference between Yieldstreet and Masterworks is that with the latter, you’re buying shares of specific pieces of artwork.
|Minimum investment||$5,000 – $10,000||$500||$1,000|
|Asset classes||Real estate, litigation finance, etc.||Business debt.||Fine art only.|
|Accreditation requirements||Primarily for accredited investors, with limited opportunities for non-accredited investors.||Accredited investors only.||No accreditation required.|
|Our review||Percent.com Review||Masterworks Review|
You’ll receive either a K-1 or 1099 at the close of the year for every different investment you have. For example, if you diversify into three separate investments, you’ll get three different tax forms.
Yes, you can invest in an IRA with Yieldstreet. They offer both traditional (tax-deferred) and Roth (tax-free) IRAs, providing investors the opportunity to diversify their retirement portfolios with private market alternatives.
Yieldstreet does not offer a secondary market for investors to trade or sell their investments before the investment term ends. Investments on Yieldstreet are generally illiquid, and investors should be prepared to hold their investments until maturity.
Yieldstreet Review: Summary and Final Verdict
Yieldstreet is a unique and innovative platform for alternative asset investing, offering a range of investment opportunities across various asset classes such as real estate, litigation finance and more. The platform caters mainly to accredited and higher-net-worth investors due to its higher minimum investment requirements and lack of liquidity.
While Yieldstreet provides options like the Prism Fund and Growth & Income REIT for more hands-off investors seeking diversified investment options, it is still essential for investors to conduct their own due diligence to determine how these offerings fit within their overall investment portfolios.
Investors considering direct investment opportunities should be prepared for higher risk levels and the need for more extensive due diligence.
Yieldstreet has its drawbacks, such as limited liquidity and a more exclusive investor base. However, for those who meet the accreditation requirements and are willing to invest time in understanding the platform’s offerings, Yieldstreet can be a valuable addition to a well-diversified investment portfolio.
It is particularly well-suited to experienced investors looking to diversify their holdings beyond traditional stocks and bonds, and who are interested exploring the world of alternative investments.
Disclosure: I am a paid partner of Yieldstreet, a company that operates an online investment platform, and have been compensated for referring investors to Yieldstreet investments. This financial relationship may influence the content, topics or posts made on this platform. The views and opinions expressed on this platform are purely my own. This content is not intended to provide investment advice. Investing involves risk, including loss of principal. Please carefully review Yieldstreet’s Offering Circular before making any investment.