Is Yieldstreet The Best Alternative Investment Platform

Jeremy BiberdorfBy: Jeremy Biberdorf

October 15, 2023October 15, 2023

Yieldstreet Logo

Yieldstreet is a crowdfunding platform that lets you invest in alternative assets through debt investment. That means you’re lending money to finance assets like commercial real estate, shipping vessels, or litigation finance.

To use Yieldstreet, you invest a minimum of $5,000. The ideal individual investor has a sizable portfolio and wants to diversify beyond stocks and bonds. Yieldstreet has been around since 2014 and has a strong track record, with over $1.3 billion invested on the platform and nearly $750 million in returns paid out to investors. The average net return is an impressive 11.54% annual income.

Yieldstreet is best for seasoned investors who want to diversify into alternative assets and are comfortable with the risks. Here is a  Yieldstreet review to determine if it checks all the boxes for the best alternative investment platform.

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Yieldstreet Investment Offerings

Yieldstreet offers a wide range of alternative investment products across several asset categories. Let’s take a look at the main options available on their platform.

  • Real Estate: Real estate investments on Yieldstreet include commercial real estate market loans, real estate debt, multifamily property investments, and fix and flip loans for residential rehab projects.
  • Marine Finance: For those interested in the shipping industry, Yieldstreet offers investments in cargo vessels, tankers, container ships, and more.
  • Litigation Finance: If you want exposure to the legal industry, litigation finance investments on Yieldstreet provide funding for commercial lawsuits and legal settlements.
  • Art: Yieldstreet also offers rare opportunities to invest in art. They work with art experts to source, evaluate, and curate investment-grade artworks from world-renowned artists. Art investments provide portfolio diversification and have generated solid potential returns over time.

While the returns can be tempting, always remember that alternative investments are often illiquid investments and riskier than traditional options. For novice investors, it may be best to start slowly and gain experience before diving into some of the more complex offerings on Yieldstreet’s platform.

The Yieldstreet Investment Process

To get started, you’ll need to create an account on the Yieldstreet website and link a bank account to fund your investments. The signup process is simple and takes just a few minutes.

Once your account is set up, you can browse the current investment offerings on the platform. These include things like real estate, legal finance, commercial loans, and art. Review the details of any offerings that interest you, like the length of the investment, the annual percentage yield (APY), and the underlying asset securing it.

When you find an investment you want to fund, you simply select how much you want to invest and transfer the money from your linked bank account. Most individual deals require investment minimums of $10,000 to $25,000. The money is then pooled together with other investors to fund the offering you chose.

Yieldstreet handles all the paperwork, legal documentation, and management of the investment for you. They aim to provide strong diversification and risk mitigation through extensive due diligence and active portfolio management.

Yieldstreet Fees

Yieldstreet aims to charge lower fees than many traditional investing platforms. As an investor, the fees you pay will depend on the specific investment products you choose.

For short-term notes, Yieldstreet doesn’t charge any annual management fees. For other alternative investing products like Special Purpose Vehicles or Borrower Payment Dependent Notes, you’ll pay an annual fee of 0-2% of your investment amount.

The fees are highest in the first year but decrease in the following years. For example, SPVs charge $100 in year 1, $70 in year two, and $30 after that. BPDNs charge $150 initially, dropping to $30 after the first year.

If you invest in the Yieldstreet Prism Fund, you’ll pay a 1% management fee and 0.5% or less in administrative fees each year. While the Yieldstreet Prism Fund aims for higher returns to offset these fees, it does come with more risk than the platform’s other offerings.

For new investors, Yieldstreet’s lower fees make the platform an attractive individual investment option to start building your portfolio. Once you get familiar with how the platform works and see strong returns from your initial investment selections, you can consider diversifying into options like the Yieldstreet Prism Fund.

Over the long run, the compounding impact of even relatively low fees can significantly impact your rate of return and investment goals, so paying close attention to all fees remains important.

Is Yieldstreet the Best Alternative Investment Platform?

The platform’s legitimacy is out of question as it has proved to hold its own since its inception in 2014. If you meet the minimum investment requirements and can adhere to the investment terms, Yieldstreet can be an interesting way to get a diversified portfolio with alternative investment opportunities and potentially strong returns.

As an investment platform, Yieldstreet aims to provide accredited investors access to asset-based investments that were previously only available to retail investors and institutional investors. The types of direct investments Yieldstreet offers typically provide higher returns than traditional investments like stock markets, mutual funds, and bonds. However, with higher returns comes higher risk tolerance.

While Yieldstreet can provide strong returns, the fees are higher than a typical low-cost brokerage. Management fees range from 1-2% annually. There are also servicing fees, origination fees, and other asset-specific fees. To start your investment journey, click here to create an account on Yieldstreet.

Get Started With Yieldstreet

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Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

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