Through Yieldstreet, accredited investors can invest in alternative assets like supply chain financing, fine art, real estate, commercial financing, and even litigation financing.
Yieldstreet is a crowdfunding platform that provides average investors with opportunities to invest in alternative investments on a limited basis.
The platform offers high-yield investments in physical assets that provide dependable passive income.
You might wonder if you should sign up for the platform and invest in alternative assets. To help you make a decision, read our YieldStreet Review 2022:
Yieldstreet At A Glance
- Yieldstreet offers investments in debt investments across commercial loans, art, aerial and marine, real estate, and even litigation finance, like a legal settlement.
- It was founded in 2015 by Michael Weisz and Milind Mehere and is headquartered in New York City.
- Yieldstreet is open to accredited and non-accredited investors. It only offers investment to non-accredited investors through the Prism Fund.
- Many of the Yiedstreet investments are illiquid- meaning this platform is better for growing long-term wealth rather than stocks that you can sell off quickly.
- Long-term investments have lower risks and more stability over time
Who is Yieldstreet Best For?
Yieldstreet is a platform where people can invest money. It’s a better platform for people who have invested and know what they’re doing.
With holdings in everything from private equity and venture capital to real estate and commodities, these funds offer exposure to a wide range of asset classes.
Overall, Yieldstreet is also a good platform for:
- Investors who want to invest in real estate projects, marine projects, and more
- People with at least $2,500 to invest
- Individual investors who are investing for the long term
- People looking to make above-average quarterly distributions on their money
The platform requires most investors to be accredited, meaning they have a net worth of:
- at least $1 million, excluding their primary residence
- be single investors with at least $200,000 in income for the last two years
- or $300,000 if married
As we mentioned, there’s the Prism Fund for non-accredited investors, where people can invest with as little as $2,500.
If you’re looking for an investment platform with a different selection of investing opportunities, you’ll want to check out Yieldstreet.
Let’s get into how it works and what you can do with the platform:
How It Works
How Yieldstreet works is simple: accredited investors have quick and straightforward access to alternative investments with high investment minimums.
Some investments on Yieldstreet have a minimum $10,000 initial investment, while others may start at only $2,500 – but regardless, the projects you invest in are worth millions of dollars.
Because of the commitment involved in these alternative assets, the expected annual investment return is higher than what you might find elsewhere.
You essentially loan money to businesses and get paid back according to the annualized return rate over a six-month to five-year period.
Of course, investments made on Yieldstreet are illiquid, meaning it takes longer to get your money out if you want to sell your investment.
Assets Available on Yieldstreet
Some of the assets investors can choose from on Yieldstreet include:
- Short-term notes: The short-term notes on Yieldstreet have had a targeted annualized yield of 4.6%.
- Fine Art: Yieldstreet has shares of art that people can invest in. Most of the time, people need to have $10,000 or more to invest.
- Real Estate: The types you can invest in on Yieldstreet include single-family homes, multi-family homes, commercial developments, and industrial developments.
- Supply chain: The minimum investment to tap into the supply chain financing portfolios on Yieldstreet is $10,000 or more.
- Structured Notes: Yieldstreet offers structured note categories to invest in, including tech, consumer, and diversified portfolios. There’s a minimum investment of $15,000 in the structured notes.
The cost of investing in YieldStreet funds is significantly higher than brokerage account fees for other investment options, like mutual funds.
Yieldstreet Management LLC charges annual management fees on all offerings. The yearly management charge usually is between 1 and 4% each year.
The annual management fee is shown on each offering’s page for the investment opportunity.
Yieldstreet has minimums for certain alternative investments. On each investing offering page, there are minimums and maximum limits listed.
The Prism Fund and Short-Term Notes’ initial investment requirement is $2,500.
The minimum investment in other assets on Yieldstreet varies by the offer and usually starts at $10,000.
However, the higher the deal, the higher the investment- we saw some on the list starting at $60,000, likely for accredited investors.
To invest in cryptocurrency on Yieldstreet, you’ll need a larger deposit than if you used Coinbase or Gemini. It takes at least $250 million to put into crypto on Yieldstreet.
How To Invest With Yieldstreet
Yieldstreet Prism Fund
The Yieldstreet Prism Fund is an excellent way for individual investors to invest in a portfolio of investment opportunities with multiple asset classes across five classes: legal, private business credit, commercial, real estate, and art.
The Prism Fund is available to all investors on Yieldstreet who can invest a minimum of $2,500.
It’s the only investment option open to non-accredited investors who don’t meet the Securities and Exchange Commission (SEC) requirements for accredited investing.
Yieldstreet says the Prism Fund pays a quarterly distribution that is set at 8%. The annual fees for managing the fund are set at 1.5%.
With Yieldstreet Direct Investments, you can invest in one asset option with a minimum investment of just $10,000.
You’re lending money to the originators (borrowers) and earning a return on the interest payment and yield paid by the borrower.
It reminds me of peer lending, but the end goal of investing is much more detailed, but borrowers can still default when projects aren’t turning out.
To be eligible to invest in Yieldstreet Direct Investments, you must be an accredited investor with a net worth of at least $1 million or an annual income of at least $200,000 for the last two years.
When you make a direct investment in one of the alternative asset deals through Yieldstreet, you’ll receive detailed information about each investment deal.
You’ll receive information about the investment minimums, the interest payments, the estimated future profits, and the net annualized returns, whether it pays quarterly distributions or yearly.
Yieldstreet also charges an annual management fee to help manage the loan and collect payments from borrowers. The fee amount and investment period will be listed in the detailed investment summary.
With a Self-Directed IRA, you’ll be able to choose alternative investment deals that are not typically available in a traditional or Roth IRA, such as real estate investments, private loans, and more.
To open a Self-Directed IRA with Yieldstreet, you must have a traditional or Roth IRA currently funded elsewhere, like at Betterment.
You then transfer your assets to Yieldstreet and choose from various alternative investments.
Annual fund expenses will be charged from your IRA at the end of each year to pay account maintenance fees.
The Yieldstreet Wallet is a checking account that earns annual interest on the funds held in the account.
It’s automatically created when you create an individual investor account on Yieldstreet and acts similarly to a savings account.
You don’t need to be an accredited investor to have a Yieldstreet Wallet, and the account has no minimum balance requirement.
Having funds in a Yieldstreet Wallet can help speed up your investment process. Your payments and distributions will be set to your Yieldstreet Wallet account.
The funds are held at Evolve Bank & Trust, an FDIC-insured bank, which means that your funds are insured up to the maximum allowed by law which is currently $250,000 per individual.
Pros & Cons
- Gives individuals the ability to invest in private structured credit deals
- Offers a variety of alternative asset classes to accredited investors
- Generally has a lower risk profile than most investment platforms offering equity investments
- The fund pays declared dividends
- Non-accredited investors have one investment offering – the Prism Fund
- Yieldstreet investments are highly illiquid investments
- It doesn’t offer a secondary market to help improve liquidity
When it comes to personal finance, people have different financial goals.
Some want to make their money grow slowly by investing in the stock market. Others want to find ways to make money with passive income each month.
Let’s look at some alternatives to Yieldstreet to see if one might better fit your investment goals and funding:
Fundrise is an excellent choice for investors looking to invest in a portfolio of commercial real estate projects without the hassle of day-to-day property management.
Most investments offer a mix of eREITs and eFunds, giving you exposure to different market sectors.
In addition, they charge annual management fees of 0.85% for managing the real estate funds (eREITs/eFunds) that make up a Fundrise portfolio.
But their investment minimum is only $10, so investing in real estate is available to everyone!
Want to know more about investing in real estate for less? Read out Fundrise Review here.
If one of your investment goals is to own a single-family residence and rent it out, Roofstock may be perfect!
With Roofstock, you can easily invest in properties with tenants already living there, so you don’t have to worry about finding and negotiating with tenants yourself.
Roofstock does all the work for you, and you can invest with a minimum of only $100.
Not only does this save you time, money, and effort, but it also means that you can focus on what’s important: making more money!
Find out more about it in our Roofstock Review.
When it comes to investing in commercial real estate, Crowdstreet is one of the best options for investors.
The platform offers a great selection of deals with a minimum investment of $25,000, making it a more expensive option than others.
There are no fees to join Crowdstreet. Each investment deal comes with fees, but this can work in your favor as an investor.
This structure means that you only pay fees when investing in a deal, which can save you money in the long run.
Is Yieldstreet legit and safe to use?
Yes, Yieldstreet is an alternative investments platform that offers opportunities usually reserved for hedge funds or institutional investors.
Accredited investors can create a diversified portfolio with access to alternative investments.
Do you have to be accredited to invest in real estate?
No. It depends on whether you are investing on an investing platform that offers alternative investments or buying real estate locally.
With Yieldstreet, you’ll need to be accredited for direct investments and more diverse opportunities.
But by joining Fundrise, you don’t need to be an accredited investor and only need $10 to start, making real estate investing easily available to everyone.
You don’t need to be accredited to invest locally in real estate, but you may have more restrictions if you buy real estate through an investing platform like Yieldstreet or Fundrise.
Why should I invest in real estate?
Real estate is a popular investment choice for many reasons. For one, it’s an asset class that has been around for centuries and is considered a relatively safe investment.
In addition, real estate provides many investors with several benefits, including stability, income potential, and the ability to leverage investments. Additionally, real estate is one of the few investments you can own outright or through a pooled investment such as a REIT, mutual fund, ETF, or IRA.
Yieldstreet offers a platform that makes it easy for investors to find and invest in high-yield opportunities.
Their experienced team vets each opportunity before it is made available on the platform, so you can feel confident knowing your money is being put to good use.
It would be nice if more individual deals were available to non-accredited investors on the platform- but you never know what the future might hold!
Still, if you have some money to invest and want to try out something other than the stock market or bonds, Yieldstreet is definitely worth checking out to grow your money.