So you’re thinking of investing your hard-earned money? This YieldStreet review will shed light on everything you need to know about the crowdfunding platform.
You’ll also discover if YieldStreet is a good investment, including the pros and cons you should know.
The best thing about investing is the returns!
Yes, you want a safe and reliable investment, with you receiving your returns regularly and at the stipulated time.
What Is YieldStreet?
YieldStreet is a crowdfunding investment platform whereby people like you could put in their money and receive a percentage of 8-20% in returns after a stipulated time.
Like most investment platforms, YieldStreet has a minimum amount of 10,000 dollars.
They offer a wide range of investment opportunities from real estate to art to commercial and legal.
One notable thing about the platform is that YieldStreet has a unique vetting process for bringing in investors.
You would have to meet specific criteria before you can be allowed to invest on YieldStreet.
There are no risk-free investments, and considering the percentage interest you would be getting (8-20%), you can be sure that there would be some level of risk involved.
However, on the positive side, YieldStreet investment has been going on strong for five years with no late payment on interests and no defaults.
Now we are going to discuss the review in total.
Is YieldStreet a Good Investment?
First, here’s something you need to know about its background.
YieldStreet began operating in 2015 for litigation finance: this pairs an investor with a plaintiff looking for some funds to cover some expenses from an expected settlement from a law case.
Now, It is no longer just a litigation financer.
YieldStreet has now branched into other forms of investments like real estate, oil tankers, and art, thereby diversifying their portfolios.
Most of their loan repayments have been going on steady, but there are always risks of defaulters.
So to put it simply, if you invest in YieldStreet, there are two ways by which you can earn a percentage interest—on the returns made on real estate or sale of oil or art, and also on interest received on the repayment on loans.
Investor Criteria
Accredited Investor
YieldStreet only allows a certain type of investors into their platform. These are people with a $1,000,000 net worth or earns $200,000 per year for the preceding two years.
Prism Fund
They also do not accept every investor into their program to ensure you have to meet specific criteria.
However, they recently (August 2020) decided to open up to all investors whether they meet their standards or not so far as your investment is $5,000 and above.
Over $1.5 billion is the investment liquidity of YieldStreet as of October 2020, a few months after the beginning of Prism Fund, pushing up its rank to number 46th on the 2020 Inc 5000, a list of the US fastest-growing private companies.
YieldStreet Features
Minimum Investments
YieldStreet says that the minimum investment is $10,000, but since the beginning of the prism fund, the minimum investment could range from $5,000–$10,000.
The company would tell you where you belong, either as a prism fund or accredited investor.
Asset-Based Investments
All loans given are backed by several assets like real estate or actual legal settlements.
So, when there is a default in the loans or a disagreement, such defaulters would have to forfeit their assets.
It is also a way to recoup the lost profit and ensure that in YieldStreet, investors don’t lose their capital.
You should note that it doesn’t negate the risk of an investment as all investments are risky.
Investment Offers
Every investment offer is detailed on their website, including offering site, investment sites, minimum and maximum investments accepted, and investment durations and expected returns.
The site also gives details on each portfolio, risks, actions that are taken to mitigate risks, why the company decided to go into such an investment, and their payment schedule.
YieldStreet does a lot to be very visible with all their investment plans, schedules, and risks.
What Types of Investments Does YieldStreet Offer?
Litigation Finance
As explained earlier, this finance option is for those involved in litigation, whereby the plaintiff is expected to receive a settlement.
This investment method is unknown, and YieldStreet is the first investment platform to give loans for such court cases.
Yieldfield only gives loans to cases that have a great chance of success, such as accident victims, police brutality, or wrongful imprisonment.
The main risk involved in litigation financing is when the plaintiff loses the case, which has so far not happened, but it’s still a possibility.
Accounts Receivable Financing
This one is financing for business ventures with a requisition order but is not liquid enough to purchase it.
YieldStreet provides the funds. The company with the order would already have security on the order itself since it’s already in a requisition order.
The only risk is when the customer refuses to pay up for the required purchase.
YieldStreet recently funded a production company with $3.1 million, which was paid back in about a month—making a massive 20% interest in one month.
Sports Star Finance
Also, another interesting one is the Sports Star Finance loans to newly signed sports stars.
These are mostly NBA stars who just signed a sports deal or are about to be.
They could request for a loan and be given approval and given an extended time to repay.
These loans are relatively low risks because the sports star has already signed a deal in place.
And the loan repayment is shared for a few months, which would be easy for the star to repay.
YieldStreet has given out several loans to sports stars, with repayment going on smoothly and some completed.
High-value Fine Arts
YieldStreet ventured into acquiring high-value fine arts. They do these by giving out loans with high-value arts as collateral in case of a default.
Hard Money Loans
These are the type of loans banks and other institutions give out to people. Loans backed in with real estate properties could be acquired once there is a default.
YieldStreet also gives out such hard money loans to people, too, depending on the size and duration.
Other Ventures
These are just some of the investment opportunities that YieldStreet has in place. There are a whole lot of others.
YieldStreet keeps looking for new and exciting avenues to invest your funds that would yield a tremendous interest with minimal risk.
However, the majority of the loans given also have sufficient collateral to back them up.
As such, even if there are defaulters, investors like you would have your initial investment back even if there was no profit.
Fees
YieldStreet charges a percentage of your investment for managing and running the assets, culminating up to 2.5% annually.
They also are certain investments that have specific fees attached to them. They range from $100–$150 from the first year to a much lower fee—could be as low as $30 in the subsequent years.
These are deducted from the interest payments and not from the investment capital.
YieldStreet lists all its fees on the individual offering pages.
Payment Methods
Once you are already an investor on any platform, you would want to receive payments on your returns.
In YieldStreet, you just have to put in your bank account details, and you’ll receive your returns at the stipulated time, which could be monthly, quarterly, or annually.
Return On Investments
Some returns are all based on when they receive returns on the investment made or at investment maturity.
Perhaps, when a financial litigation arrangement is made, or a sports loan is given, it is when the litigation is won, and settlement is given that you would be able to receive its returns.
For instance, an NBA player collected a loan of $200,000 since he would soon be receiving his payments to repay.
If he gets thrown out for misconduct or unforeseen circumstances before his payment, the loan would probably not be repaid even after it came to the end of term.
Risks Associated With Investing in YieldStreet
Although YieldStreet has taken the time to ensure that the risks associated with their investments are minimal, there are still some risks associated with it.
Collateral Risks
Every loan is backed by collateral, notwithstanding when a default happens, and the collateral needs to be auctioned.
They might have lost their value in the market or might be auctioned at a lesser amount.
Cash flow Risks
YieldStreet does not offer a secondary market.
Thus, if you as an investor become strapped for cash or an emergency occurs before the end of the investment tenure, there is no way to retrieve your funds until the term is over and your payment is made.
Bottom Line: Is YieldStreet Worth It?
Without a doubt, YieldStreet is a lucrative investment platform with an interest of 8–20%.
They offer a wide range of investment ventures, from high-priced fine art to litigation finance.
And most especially, the minimum investment amount has been reduced to $5,000.
Their fees are reasonably affordable, and they also explain in details everything about the investment they want to venture into, making it easy to decide if you would like to invest or not.
However, there are no secondary markets, which is probably a downside to the platform.
So if you are looking for a place to invest your money, perhaps you should try YieldStreet. It is a good platform.
Also Read: PeerStreet Review 2021: Is PeerStreet A Good Investment?
