My Yieldstreet Experiment

I created this post to track the performance of my investments with Yieldstreet. (Check out my full review of Yieldstreet here.) If you didn’t read my review, Yieldstreet allows investors to pool their resources to fund real estate loans and litigation financing advances.

Although it offers great diversification benefits, and a high degree of current income, the Yieldstreet platform suffers from a lack of available investment offerings, and slow processing times for investments. This means that your money will spend more time in transit (if you can find an open investment), and less time earning interest. Hopefully Yieldstreet can increase their offerings, and work on speeding up the processing times for investments.

Also, returns cannot be reinvested, which means the interest and principal payments from investments will sit around until you amass enough to invest in a new offering (with a minimum of at least $5,000). The workaround I’ve used so far is to link my Yieldstreet account to a high-yield savings account, such as through Synchrony Bank (which currently pays around 1% interest). This cuts down on the time your money is sitting by uselessly, because although a 1% return isn’t great, it’s better than nothing. Just be sure that your Yieldstreet investments don’t throw a wrench in your savings plans. Yieldstreet investments are not liquid, and they are significantly more risky than an FDIC insured savings account. Taking all this into consideration, I set up my Yieldstreet investments to automatically withdraw and deposit money into my savings account, so the process is easy, and my money spends a minimal amount of time sitting by uselessly.

February 2017 Update


So far, I have invested in only one of the litigation financing offerings, and I have received no payments or interest yet. The only frustration at this point has been the slow turnaround time. It took more than a week and a half for my investment to be debited from my bank account and start earning interest in my Yieldstreet account.

Current Thoughts:

Yieldstreet Litigation Financing
Litigation Financing Payments are “Event-Based”

Rather than pay on a set schedule, the litigation portfolio makes payments on an “event” basis, which means that every time a case settles, a portion of my principal investment and some interest will be deposited into my savings account. This is obviously less predictable than a regular monthly payment, but the investment should provide around a 13% return per year over the three-year investment term. Since I’m not relying on this money for income over the next three years, the erratic payments don’t bother me.

Investors rely on LawCash (the company that provides the loans to the litigants) to correctly structure the portfolio to include cases in different stages of litigation, to make sure that the portfolio can make somewhat regular periodic payments. I’ll try to track the regularity of the payments as I update this post. If you use Yieldstreet, let me know what your experience has been in the comments below!

March 2017 Update


I invested in a couple more offerings this month and late February:  One was a $5,000 real estate bridge loan that was just released. The other was a $20,000 commercial litigation financing offering. This offering was a bit unique. Instead of loans made to personal injury plaintiffs, it was a loan made to a top law firm that took several cases on contingency. The law firm is financing the up-front work, which reduces their risk and initial cash outlay, and in return, the investment is set up to provide upside potential to Yieldstreet investors. There is a 12% preferred return, and any additional recovery from the eight underlying lawsuits gets split among the various parties (the law firm, Yieldstreet, and Yieldstreet investors). I’m not expecting anything miraculous from this investment, but I wouldn’t be surprised if it returned around 20% annualized over the three-year term because of the upside participation.

Current Thoughts:

My original $5,000 litigation financing investment made its first payment (a whopping $3!). Evidently one of the smaller cases settled the day I made my initial investment, so this payment was applied completely to principal. Now that I have accrued interest on this investment, future payments will be allocated to outstanding interest first, because the underlying cases are all cross-collateralized, and then to the principal.

Also, if you’re interested in investing with Yieldstreet, I would recommend getting your account ready to go, because each new investment is selling out in a matter of minutes. The commercial litigation financing with upside that I described above had $3 million invested within the first 3 minutes! It was pretty crazy to watch. Yieldstreet has responded to some of the concerns I had by offering more investments (even though they sell out in a flash), and by being more proactive in letting investors know when something is going live. Since you need to be logged in the moment the investment opens, that communication makes planning easier. Let me know if you use Yieldstreet, and stay tuned for future updates!

July 2017 Update

I just wanted to give another quick update on my Yieldstreet investments. I have purchased five different investments so far, and all have been performing well.  Two of the investments are real estate financing offerings, and these pay on a fairly regular monthly schedule. Both real estate offerings have had one of the underlying loans paid off early, which does cut down on the returns (given the week or so that the money takes to transfer on either end), but other than that, I have no complaints.

The litigation financing offerings are also performing well. They seem to pay off principal and interest about evenly—in other words, if I receive a few payments, approximately half will be allocated to accrued interest, and the other half will be to principal. I’m very happy with both asset classes. The real estate offerings pay 9% annualized, while my litigation financing investments pay between 12-15%.

OK, I think that’s about all I have to add. Keep making those returns!

14 thoughts on “My Yieldstreet Experiment”

  1. I experienced the selling out issue first hand about a week ago when they had announced a litigation offering at 13%. It was my first experience with Yieldstreet, and I have to admit I was very disappointed. The website crashed, and I was unable to invest, even though I was in there within the first 5 minutes. I ended up sending them an e-mail expressing my frustration, and they called me to try and make things right.

    I might try giving one of their next offerings a shot, but so far they seem pretty light on opportunities. I understand they’re working on incorporating some auto-investing features, and other enhancements. Just seems like they’re a bit behind the other guys in the same space on some of those features.

    1. Yeah, I hear you on that frustration. So far their website has crashed during two of the offerings I’ve tried to invest in, which seems like a pretty rudimentary issue for a company with millions under management to be having… I think the demand has just skyrocketed lately, so they’re playing a little bit of catch-up on the technology end of things. Let me know if you decide to give them another try–I’d be interested to hear your thoughts once you get past the technology issues. By the way, I just checked their website, and they have three “upcoming” offerings, so it might be a good chance to try again. I think I’m going to sit these out, since I’ve already invested around $50k with them so far this year, but they look like interesting offerings.

      1. I was able to invest in their recent accelerated pre-settlement portfolio IX. I’m going to test things out with a small investment and see how that one goes. I like that it’s not real estate related since I want to balance out my peerstreet experiment. I’ll probably do a write-up on it once it gets going, and I get a feel for how it works.

        1. Great! I’d like to read your write-up once it’s done. I invested in a prior accelerated portfolio, and spoke with a Yieldstreet representative who was unable to really give me a clear answer as to what makes the portfolio more risky (and therefore have a higher yield than the normal litigation portfolio), but I think it comes down to the proportion of the overall value that is accrued interest. They still buy the portfolio at a discount, but I think a bigger proportion of the accelerated portfolio is interest, which obviously makes it somewhat more risky. As far as I could tell, the underlying loans or cases were not more risky somehow.

          I really like that the litigation funding should not be tied to the performance of stocks or real estate. It has its own risks for sure, but I can’t really imagine a scenario that those risks are the same–except of course the pending zombie apocalypse 😉

  2. I am watching / observing Yield Street from the sidelines. I was almost ready to pull the trigger on one of their Law Cash Litigation Funding offerings when I found the following:

    Apparently Law Cash was defrauded to the tune of $100,000 recently. This makes me nervous as the article points out it is difficult to do due diligence on the portfolio of cases in any given offering. If Law Cash professionals could be duped, anyone certainly could.

    1. Very interesting. Thanks for sharing the article! Fraud is a constant risk, and with smaller loans, it’s just not economically feasible to get too involved with the underwriting. From the perspective of an investor with Yieldstreet, there are levels of protection against this type of fraud though. Each portfolio of litigation funding offerings is made up of usually hundreds of individual loans, and the company has limits on what percentage of the total portfolio value a single loan can make up. They also diversify by law firm (so that a single law firm does not make up a bunch of fake plaintiffs), and even by what insurance company is ultimately potentially liable to pay if the lawsuit is successful. I believe there is also somewhat of a cushion built in, so that it is more likely the investors will receive their preferred return (Yieldstreet usually has some upside on the portfolios after the investors have been fully repaid). So even if a single loan is fraudulent, it probably won’t rock the boat too much given this cushion, and given the fact that a certain percentage of lawsuits are projected to fail anyway.

      In my Yieldstreet review, I cautioned that these investments were risky, but in my opinion, fraud isn’t as much of a concern on the portfolios because they are fairly broadly diversified. I think the article is interesting because it brings to light one of many risks that an investor might not think of (and one I don’t think I highlighted in my original review), so thanks for sharing! Let me know if you ever decide to invest with Yieldstreet, or if not, where you prefer to invest your money.

  3. I am also a recent investor in Yieldstreet (and separately Peerstreet). I agree that even for an accredited investor these should be a small part of your overall allocation. One aspect you haven’t mentioned is that you can use an IRA to make these investments. This can be very attractive when the yields are 9-15%. However I do have a couple caveats if you want to go down this path: 1. You need to be using a custodian company that can handle alternative investments like private LLCs. Vanguard is not going to work. Yieldstreet and Peerstreet have lists of custodians that they have worked with. Note: Fees vary dramatically. Do your homework. I suggest paying fees from outside funds so as not to dilute your qualified funds.2. After successfully navigating the Yieldstreet placement process (being quick on the draw when the offering opens), you will need to obtain and send all the LLC paperwork to the custodian before they are able to release funds. This is an administrative chore and delays the start of your investment. 3. Most of the available opportunities (litigation financing is the exception, some of the time) pay interest only , with principal returned at the end. This is good for the return but entirely illiquid (comment applies of course to taxable investment also).
    Anyway if you can tolerate all of these obstacles, tax free compounding of these high yields is available via self directed IRAs.

    1. Thanks for sharing this strategy! A tax-favored investment account would definitely be the best way to go for investments with high interest/earnings yields that are taxed as regular income. Sounds like a good amount of hassle to set up the account, but could definitely be worth it if you plan on investing over a long time horizon, rather than for current income.

      I know several other fintech companies have provided IRA options after getting established, so hopefully Yieldstreet will have something like that available down the road, without having to go the self-directed route.

  4. Have invested since June with a total of 7 different loans 5 litigation and 2 real estate. Agree with above opinions that the money exchange lags about a week or so but overall affects total return minimally. Biggest complaint is trying to get into the investment. The litigation ones sell out in 2 minutes. I have been unsuccessful 3 times and also 1 time system crashed as well. Very frustrating. Trying to ladder my investments like bonds so they continuously begin to pay out and can reinvest every month or so to keep the money active.

    1. Agreed. I keep hoping they’ll increase the number of offerings to take some of the pressure off the demand. I think they’re trying to open a line of credit, which could help them process and fund offerings more quickly.

  5. Peerstreet has an auto-invest option that puts you in a rotation for opportunities. This is much fairer than who can click the fastest at 12:00:00. I hope they offer something similar. It’s a little ridiculous that I can’t invest $xx,000 just because I can’t sit on their web page at the appointed hour. Nevertheless the returns are attractive and flowing well.

    1. That would be nice. In theory, I’d prefer highly-selective and well-underwritten investments, even if they weren’t as plentiful, but at some point, it’s not too beneficial if none are available. They send out emails the day before, letting investors know when an opportunity is launching, and I’ve had good luck as long as I can sit at my desktop and refresh the page at the proper time. They also offer some opportunities that are only open to new investors, but that’s obviously not a long-term solution.

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