Yieldstreet vs. CrowdStreet

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Contributor, Benzinga
November 3, 2023

Yieldstreet and CrowdStreet are two investment platforms growing in popularity with investors for their returns. While the two platforms allow you to build a personalized real estate portfolio for investing, that's the main similarity.

While CrowdStreet is only for accredited investors, Yieldstreet has two offerings for nonaccredited investors. CrowdStreet also requires a more substantial minimum investment. Read on for a full comparison of Yieldstreet vs. CrowdStreet to decide how each could fit into your investment portfolio.

What is Yieldstreet?

Yieldstreet is an alternative investment platform that gives investors various investment opportunities to diversify their portfolios. In Yieldstreet, you can choose from assets like real estate, commercial finance, consumer finance, litigation finance, art, marine finance and commercial loans. Yieldstreet aims to allow individuals to diversify their portfolios for the potential of higher returns. Yieldstreet allows investors to participate in crowdfunding, but most offerings are only available to accredited investors.  

Yieldstreet conducts a risk assessment and due diligence on each investment opportunity before offering it to investors. With an account minimum of $10,000 and management fees of 0% to 2.5%, Yieldstreet offers solid investment options for accredited and nonaccredited investors. However, it's worth double-checking fees as a 0% fee is excellent, while 2.5% is high. 

What is CrowdStreet?

CrowdStreet is an online crowdfunding platform only available to accredited investors. With CrowdStreet, individual investors are connected with real estate developers who raise capital for their projects while offering investors the opportunity for potentially high returns.

CrowdStreet is structured like a marketplace where investors can browse and invest in a variety of commercial real estate projects, including office buildings, retail centers, multifamily properties, other commercial and industrial real estate and land. 

CrowdStreet has higher minimums than Yieldstreet. Accredited investors must invest a minimum of $25,000. The investment period is usually three to 10 years. CrowdStreed has no options for early withdrawal, potentially leading to medium-term liquidity of investments. 

CrowdStreet offers individual investors access to institutional-quality commercial real estate opportunities. Investors can access CrowdStreet's tools and resources to make better informed investment decisions about due diligence, materials, financial projections and investor relations. 

Comparing Yieldstreet and CrowdStreet for Real Estate Investing

Should you invest in Yieldstreet or CrowdStreet for real estate investing? That depends on various factors, including your available funds and status as an accredited investor. 

User Interface and Platform Design

If you're debating between Yieldstreet and CrowdStreet, ease of use and intuitive navigation shouldn't be a consideration. Both offer simple navigation, intuitive interface and insights into investment opportunities, including relative risks. 

However, while Yieldstreet has a mobile app available on Android and iPhone, CrowdStreet doesn't appear to have an app available to investors. While it's consistently rated as one of the best real estate investing apps, the actual app doesn't appear to be available for mobile devices. Instead, you access the website and sign up or log in. 

Both Yieldstreet and CrowdStreet are easy to get started with. Benzinga opened account in about 5 minutes on both platforms. Answer a few questions about your income and status as an accredited investor, enter a little personal contact information and start browsing investment opportunities. 

Types of Investments Available

While Yieldstreet offers a variety of asset classes such as real estate, art or other assets, CrowdStreet offers only real estate. Both websites provide information on investment due diligence. Both Yieldstreet and CrowdStreet have benefits when it comes to analyzing investments and accessing information. CrowdStreet offers a bit more information on each investment opportunity, but investors also appreciate Yieldstreet’s easy-to-navigate platform and highlights section.

Any investment has inherent risk, so the risk levels of each investment platform are comparable, assuming you diversify your total investment portfolio across asset classes and investments. 

Minimum Investment Requirements

When it comes to investing with varying budgets, there is a clear winner. If you have a smaller investment budget for real estate or other alternative asset classes, Yieldstreet requires a small minimum investment — $10,000 compared to CrowdStreet's $25,000 minimum investment. Yieldstreet also has options open to nonaccredited investors, offering accessibility to a wider range of investors.

Returns and Performance

Historical performance of investments on each platform varies by investment type. CrowdStreet is known for its commercial real estate investments with good historical returns, but that can vary by individual investors' portfolios. Projected returns on Yieldstreet are 8%-20% annually. 

CrowdStreet's average annualized internal rate of return (IRR) is 17.7%, generally higher than Yieldstreet. According to CrowdStreet data, its average holding period is just 2.7 years, and  CrowdStreet’s investments can earn up to 19.7% or more. In addition, CrowdStreet doesn't charge fees to investors, preserving your capital and returns. 

Transparency and Due Diligence

Both CrowdStreet and Yieldstreet offer transparency in their screening and vetting processes. For Yieldstreet, all investment opportunities undergo a stringent four-step vetting process to review an investment opportunity through various risk lenses comprehensively. Less than 5% of all investment opportunities evaluated by Yieldstreet made it to investors 2023 year-to-date. The vetting process includes origination, screening, diligence, assessment and a committee review. 

CrowdStreet also performs thorough due diligence that involves not only the investment opportunity but thorough due diligence on the company offering the investment. This includes a background check, sample reporting review, financial vetting and track record review of any company. If the company passes due diligence, properties are evaluated with key materials, including financial models, market, rent and sales comps, legal and loan documents and financial statements. 

While both platforms perform due diligence, CrowdStreet's due diligence of companies appears more thorough, and the reports available to investors are more comprehensive. 

Platform Security and Regulation

In the day of cybersecurity threats, an investment platform must employ robust security. Yieldstreet’s security includes:

  • All data in transit is encrypted end to end with a minimum of 128-bit encryption.
  • All data at rest is encrypted via FIPS-140-2-compliant encryption technology.
  • Account passwords are cryptographically one-way hashed with a multi-iteration 16-byte random salt.

While CrowdStreet has strong privacy policies and it can be assumed it uses excellent encryption, that's not stated on the website. 

In September 2023, Yieldstreet was charged by the U.S. Securities and Commission (SEC) for misleading investors. Yieldstreet is open to nonaccredited investors and must comply with SEC guidelines.  

CrowdStreet Capital also complies​​ with SEC regulations that require customers to have access to an easy-to-read disclosure form regarding the nature of their relationship with the firm (in this case, CrowdStreet), called the Customer Relationship Summary, or Form CRS. You can find CrowdStreet's regulatory disclosures here

Pricing

The fee structures for Yieldstreet and CrowdStreet vary by investment but can be comparable. Investors should check the fees of individual investments as fees vary widely. Both funds disclose fees for investment type. 

CrowdStreet typically charges 0.50% to 2.5% in fees, with 0.25% to 2.5% tailored portfolios.

Yieldstreet fees range from 0%-2.5% annually. One investment option, the Yieldstreet Prism Fund, has a total annual fee of 1.5% and charges no load or redemption fees. 

Should You Invest in Yieldstreet vs. CrowdStreet?

Whether you choose Yieldstreet vs. CrowdStreet depends on your investment goals, available funds and whether you're an accredited investor. It also depends on how much you want to invest in high-risk, high-reward real estate investments. Yieldstreet offers more diverse investment options and asset classes and is open to nonaccredited investors, while CrowdStreet offers higher potential returns through real estate only. Learn more about other real estate investment apps or the best alternative investment platforms here

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Frequently Asked Questions

Q

Is Yieldstreet a good investment?

A

Yes, Yieldstreet can be a good investment, but you should perform due diligence. You’ll need a minimum of $10,000 to invest, and for better investment opportunities, you’ll need to be an accredited investor.

Q

Is CrowdStreet a good investment?

A

Yes, CrowdStreet can be a good investment, but you should perform due diligence. You’ll need a minimum of $25,000, and you must be an accredited investor.

Q

Is it safe to invest in Yieldstreet?

A

No investment is without risk. However, Yieldstreet performs due diligence and offers disclosures so you can build a diversified investment portfolio to help mitigate risk.

Q

Can anyone invest in CrowdStreet?

A

No, CrowdStreet isn’t open to anyone. To invest in CrowdStreet, you must be an accredited investor and plan to invest a minimum of $25,000 in the platform.

About Sarah Horvath

Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.

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