Yieldstreet Review – Diversifying Into Real Estate
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If you’re not an accredited investor but want to diversify your portfolio with real estate, art, and more, Yieldstreet is for you.
8.5/10
Cost
8/10
Features
8.5/10
Ease of use
9/10
Services
8.5/10
One thing that might frustrate newer investors is learning the importance of diversifying their portfolio and then finding out there are different asset classes required and special guidelines to be met to do so. This is the case with many alternative assets, such as commercial real estate, fine art, litigation finance, marine finance, and even investment opportunities in commercial companies through short-term notes.
Traditionally, these investment options would require you to be an accredited investor. An accredited investor meets certain financial criteria and is thus allowed to invest in certain financial products. Typically, accredited investors have high liquidity and net worth, earning at least $200,000 year-over-year for two years or more – or having a net worth of $1M or more (not including the value of your primary residence).
As you can imagine, reaching this network level can be difficult if you only invest in a self-directed IRA or the stock market. Adding real estate investments and other types of investments to your portfolio can be a major boon regarding diversification. Yieldstreet offers an investment platform that lets individual investors have a piece of the pie without being accredited investors. Learn more about how Yieldstreet works in this review so you can get started investing in real estate and other alternative asset classes.
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What is Yieldstreet?
As you’ve already read, Yieldstreet is an investing platform that offers a wide range of alternative asset classes to individual investors without the need for applying for accredited investor status. Yieldstreet does this by functioning similarly to various crowdfunding platforms and leveraging the power of the collective to help you gain access to high-yield investment categories like real estate, art, and more.
Yieldstreet was founded with the belief that hedge funds and the wealthy shouldn’t be the only sorts of investors able to enter the lucrative world of real estate investing, commercial investing, and other areas of alternative investment like art and litigation finance. As such, many asset classes you can invest in on Yieldstreet are aimed at generating passive income later in life without the annual income requirements typically required of accredited investors.
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How does Yieldstreet work?
Getting started with Yieldstreet is relatively simple and straightforward. You create an account by signing up for the platform on the Yieldstreet website.
When creating an account, you’ll be asked if you’re familiar with alternative investments. This question helps ensure that you get the materials and resources necessary to use Yieldstreet best and understand your investment decisions.
If you select that you’re new to alternative investments, you’ll first be sent to a page that explains a little bit more about what alternative investments are and how Yieldstreet helps you take advantage of them. From there, you’ll be asked what your primary financial goals are for using Yieldstreet. If you’re familiar with alternative investment classes or are a seasoned investor, this is the page you’ll be sent to immediately from the previous screen.
Yieldstreet offers four main goals or reasons to use their platform: generating income, diversifying your portfolio, investing outside the stock market, or generating long-term growth. Once you’ve answered this question, you’ll be prompted to provide information about the approximate size of your investment portfolio.
Finally, you’ll be asked whether or not you’re an accredited investor. It’s worth noting that although Yieldstreet makes its investment assets more accessible to individual investors without accredited status, the platform also features lots of assets only for accredited investors. You'll access even more investment opportunities if you’re already accredited — or become accredited during your investments on Yieldstreet.
After you’ve answered these questions, Yieldstreet will recommend one of several funds or investment opportunities. The most commonly recommended fit is the Yieldstreet Prism Fund, a multi-asset class fund offering set up for generating passive income. Yieldstreet offers individual offerings and short-term options if you’re an accredited investor.
Once you’ve selected the right account type and fund for your goals, Yieldstreet asks for some basic personal information to create your account. This includes entering your legal first and last name, as well as entering an email address and password to use to log in to your account. You’ll then be asked whether you want to set up an investment account now or keep learning about alternative investments. If you set up your investor account at the same time you register for Yieldstreet, you’ll be asked whether you’re looking to create an individual account, Yieldstreet IRA, or an entity account for your business.
You’ll then need to confirm your identity. Yieldstreet lets you verify your identity by entering your legal name, address, date of birth, and social security number. You’ll also enter your phone number on this page, which can be used to receive updates about your Yieldstreet investment account via text message.
Once you’ve completed the account creation and identity verification process, you’ll be ready to fund your investment portfolio with Yieldstreet.
How much does Yieldstreet cost?
One thing to note about Yieldstreet is that when looking at its estimated returns, they include their fees. You don’t have to do the math yourself, but knowing that Yieldstreet charges its users fees is important.
Typically, Yieldstreet charges a management fee ranging between 1% to 4% on all offerings on an annual basis.
Other than the management fees associated with Yieldstreet, creating and funding an account on the platform is completely free of charge. That said, you must have a minimum investment of $10,000 to get the ball rolling with Yieldstreet’s Prism Fund.
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Yieldstreet features
Variety of investment options
Compared to other investment platforms that offer access to asset classes usually kept behind closed doors for accredited investors, Yieldstreet offers a robust variety of investment options. From real estate and art to marine, aviation, and legal investment opportunities, there’s plenty to choose from when using Yieldstreet.
Easy to use
If you’re trying to invest in many alternative assets as an accredited investor, there are a lot of hoops to jump through. With Yieldstreet, you don’t have to deal with a pile of paperwork and can get straight to investing in the assets that most interest you. From account creation to tasks like adding funds to your Yieldstreet wallet or choosing an investment, Yieldstreet makes the entire investment process straightforward and user-friendly.
Reasonable fees
When you consider the typical consumer interest rates lenders offer borrowers, the management fees Yieldstreet charges are much more attractive than the kinds of interest payments most consumers come into contact with. All of this means you get to keep more of the return on your investment, which is a big deal for many investors looking to maximize their earnings each year.
Who is Yieldstreet best for?
Individual investors without accreditation
Since Yieldstreet’s stated goal is to provide access to investment opportunities usually reserved for the 1%, it’s unsurprising that It is best for individual investors without accreditation status. If you’re interested in getting into real estate or art investing but don’t have a high enough net worth or income to be designated as an accredited investor, platforms like Yieldstreet are one of your only options to diversify your portfolio with alternative investments.
Accredited investors
Even though Yieldstreet is designed for everyday investors, a lot more variety is offered to accredited investors using the platform. If you’re interested in choosing your asset classes rather than using the Yieldstreet Prism Fund (or want to dabble in Yieldstreet’s short-term offerings), you must be an accredited investor.
Who shouldn’t use Yieldstreet?
Investors who are just starting out
While many of the functionality and promises offered by Yieldstreet are quite compelling, it’s worth remembering that not every investment opportunity is right for every investor. Generally speaking, it’s wise to only invest about 10% of your portfolio in alternative investments. If you’re new to investing, sticking to stocks, bonds, mutual funds, or index funds may make more sense. While these aren’t as sexy as investing in pieces of art or condo complexes, they’re much more stable for someone just getting started building their nest egg.
Pros and cons
Pros
- Accessible. One of the biggest benefits of using Yieldstreet is that it gives individual investors access to something that they otherwise couldn’t use. Since Yieldstreet handles the due diligence process, you can have peace of mind that what you’re investing in has already been vetted, rather than having to perform that work yourself. While it’s true that more investment options are available for accredited investors on the platform, for many individuals having access to something may be better than having access to nothing.
- Great user interface. Yieldstreet’s user interface is slick, modern, and easy to use. From creating an account to navigating the website’s support area, the user experience on Yieldstreet is clean and straightforward.
- Good learning resources. If you’re new to the world of alternative investing, Yieldstreet has plenty of materials to watch and read so you can learn more about the benefits of investing in alternative asset classes.
Cons
- More functionality for accredited investors. Even though Yieldstreet wants to help the 99% access alternative investment opportunities, a lot of the features offered by Yieldstreet are still reserved for accredited investors. While Yieldstreet may help you reach accredited investor status faster than if you were limited to just investing in stocks and bonds, that can still be a disappointing realization to make.
- Can be illiquid. Once you’ve invested, you’ve invested for the duration of the investment as set forth by Yieldstreet. This means that you can’t access your money until your investment has run its course. Occasionally, that target date could be past what’s originally quoted to you by Yieldstreet, so it’s important to only invest money you don’t need to see for a while if you’re using their platform.
- No live chat for customer support. While Yieldstreet does offer customer support via email and a knowledge base with an FAQ, most investment platforms these days still offer live chat support as well. For people who aren’t always able to make a phone call to get their questions answered, this can be frustrating for someone who’s already read through the knowledge base and still has questions about their account or portfolio.
Yieldstreet vs. competitors
Yieldstreet isn’t the only game in town regarding alternative investment crowdfunding platforms. Here’s how Yieldstreet stacks up against two major competitors: Crowdstreet and Fundrise.
Platform | Management fees | Minimum investment | Asset classes |
Yieldstreet | Between 1% and 4% | $10,000 | Real estate, venture capital, private equity, crypto, art, transportation, and more |
Crowdstreet | Between 0.25% and 2.50% | $25,000 | Real estate, commercial |
Fundrise | 1% | $10 | Real estate |
Crowdstreet
CrowdStreet and Yieldstreet represent two innovative platforms in the alternative investment space, each with a distinct focus and approach to democratizing access to investments traditionally reserved for institutional investors.
CrowdStreet concentrates on commercial real estate investments, offering investors direct access to various real estate projects, including multifamily units, office spaces, and retail developments, emphasizing transparency and direct investor-to-sponsor communication. In contrast, Yieldstreet spans a broader range of alternative assets, including real estate, marine finance, legal finance, and art finance, appealing to investors looking for diversified opportunities beyond real estate.
While CrowdStreet allows investors to handpick individual projects aligning with their investment goals, Yieldstreet typically offers curated portfolios or funds, aiming to spread risk across different assets. Both platforms cater to accredited investors, but they differ in their investment minimums, fee structures, and the range of assets offered, with CrowdStreet focusing deeply on the real estate market, whereas Yieldstreet provides a broader palette of alternative investment opportunities.
Fundrise
Fundrise and Yieldstreet are platforms that offer unique approaches to alternative investments, catering to different investor preferences and goals within the realm of non-traditional investment opportunities.
Fundrise primarily focuses on real estate investments, making it accessible for accredited and non-accredited investors to participate in the real estate market through eREITs (electronic Real Estate Investment Trusts) and eFunds. It's designed to simplify investing in real estate with relatively low minimum investments, offering diversified portfolios across various real estate projects for long-term growth and income.
On the other hand, Yieldstreet spans a wider array of alternative investment opportunities beyond just real estate, including marine and art finance, legal finance, and more, targeting accredited investors seeking diversification in their investment portfolios.
Yieldstreet's offerings often have higher minimum investments than Fundrise's, catering to a different investor base with a preference for a broader mix of asset classes. Both platforms aim to provide access to investments typically less correlated with the stock market. Still, they differ significantly in their investment product offerings, minimum investment requirements, and accessibility to different types of investors.
FAQs
What are alternative investments?
Alternative investment asset classes are different investment opportunities that generally offer returns with a low correlation to the stock market. Whether this is real estate, art, or marine vessel deconstruction (when a vessel is sold for parts), investing in assets that aren’t a part of the stock market can help you protect your portfolio through diversification. As such, many people like to invest in alternative investments as a way of generating more of a guaranteed passive income for later in life.
When do I make money from your investments on Yieldstreet?
The answer to this question depends on what exactly you’ve invested in. In some cases, your investment will be on a predefined schedule that offers monthly, quarterly, or annual payouts. In other cases, such as with pre-settlement litigation advances, your payout will occur when a specific event occurs. Still, other returns may happen years from now, based on the schedule described to you when you select a certain option or fund.
Should I pre-fund my Yieldstreet Wallet?
Yieldstreet accepts funds via ACH bank transfers. If you’d like, you can pre-fund your Yieldstreet Wallet to cut down on the time it takes to fund certain investments; however, that isn’t necessary if you’re willing to wait for your bank to process the transfer.
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- Over 100 Stock Picks with 100%+ Returns
- Averaged Stock Pick Return over 593% (vs. 165% for the S&P)
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- 30-Day Membership-Fee-Back Guarantee
- Joy Wallet Reader Deal: The Motley Fool is offering 50% off its top stock-picking service for new members (Limited Time)
Is Yieldstreet legit?
For individual investors who are eager to diversify their portfolios with options beyond the traditional stock market, Yieldstreet offers a lot. From investing in art and real estate to more unique options like pre-settlement litigation advances and maritime deconstruction, the variety offered by Yieldstreet is second to none. That being said, most individual investors will have to start using a Yieldstreet Prism Fund (a multi-asset fund) rather than get to pick exactly what they’re interested in investing in. That functionality is reserved for accredited investors who choose the platform for simplicity and due diligence.
While it’s generally recommended to focus on the index and mutual funds if you’re new to investing, the diversification opportunities offered by Yieldstreet will be attractive to investors willing to put up a portion of their portfolio in alternative investment classes. Especially if you don’t currently have accredited investor status, Yieldstreet provides a pathway to wealth creation that otherwise wouldn’t be available. Yieldstreet is thus as much philosophy about gatekeeping in the financial industry as it is a platform for exploring and leveraging investment vehicles outside the stock market.
Ultimately, it’s important only to invest money you can afford to lose. Still, with industries like aviation and real estate continually boasting impressive returns, alternative investment classes have a lot of potential. If you’re interested in learning more about alternative investing or want to get involved, Yieldstreet is a good platform for that work.
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Writer
Brent Ervin-Eickhoff is a Chicago-based writer, stage director, and filmmaker with a background in digital marketing and content creation. In addition to Joy Wallet, Brent has written for Complex, Volkswagen, HowlRound, Picture this Post, and Third Coast Review, among others. He currently serves as the Associate Director of Marketing for Content Creation at Court Theatre at the University of Chicago. Brent graduated from Ball State University with Academic Honors in Writing.
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