Going mobile: Is there a YieldStreet app?
YieldStreet is one of a small number of online crowdfunded investing platforms that has an app for smartphones and tablets. And while the app isn't required for mobile users -- its website is mobile-optimized and works just as well as the desktop site -- it's nice if you prefer a standalone app.
IOS reviewers have given it a 4.5-star rating in the App Store, while Android reviewers have given it only 3.5 stars. A review of comments made by people giving it two stars or less found that many were dissatisfied that YieldStreet was only open to accredited investors (at the time).
YieldStreet risks: Is YieldStreet safe to invest with?
The biggest risk investors will face with investments on YieldStreet is a borrower's inability to repay the loan. Your investment is bankruptcy-remote from both YieldStreet and from the originator who brings the loan to YieldStreet to list on the platform, structured as separate legal entities with you, and other investors, as the owner of the debt in each investment.
To be specific, the loans on YieldStreet are short-term in nature, pay a high yield, and are secured by the asset described, either real estate, art, or a marine vessel. If the borrower defaults, and cannot satisfy the loan or reach a satisfactory agreement, then the asset gets foreclosed, and there are no guarantees that it will be liquidated at a high enough price to satisfy all creditors. That could mean you lose money, particularly if the loan you invest in is junior to other debt on the asset.
YieldStreet’s primarily asset-backed loans are lower risk than some investment options, but they’re not risk-free investments. The reason its offers yield higher rates than other alternative passive income options is that the yield compensates investors for the risk they’re taking by lending their capital to the borrower.
While losses have rarely happened, as most loans have either repaid on time or YieldStreet was able to work out a recovery, borrowers have defaulted on their loans in the past. As mentioned previously, a borrower tried to defrauded YieldStreet and other investors on some loans tied to vessel deconstruction. YieldStreet prevailed in this case, but it might not always be able to get a recovery, especially if the value of the assets collateralizing the loan lose value in an economic downturn.
However, as long as the economy keeps plugging along, the default risks should continue to be more than offset by the potential yields on this kind of short-term debt, particularly if you spread your capital across multiple loans and asset types. The risk is that defaults could move much higher if the macroeconomic winds were to shift. Keep that in mind, and invest according to your personal risk tolerance.
Overall, YieldStreet offers investors a unique opportunity to generate passive income backed by a variety of alternative asset classes. While not all loans have performed, it has a solid track record overall as the higher yields of its loans have proven to be more than adequate compensation for their higher risk profiles.