Two Plus Two Publishing LLC
Two Plus Two Publishing LLC
 

Go Back   Two Plus Two Poker Forums > >

Notices

Business, Finance, and Investing Making money, investing in markets, and running businesses

Reply
 
Thread Tools Display Modes
Old 02-12-2019, 04:46 PM   #1
Pretzel
journeyman
 
Pretzel's Avatar
 
Join Date: Feb 2003
Location: Portland, OR
Posts: 264
Yieldstreet.com - thoughts?

So a good friend of mine from high school started working for Yieldstreet.com last summer. Basically they invest in asset backed loans and then chop the loans up and let people buy into them for $10k+. Most of the loans are for 1-3 years and pay 8-12% interest. Being the good friend that I am I put in a little money and made one investment. I have money in there to make a second investment but haven't done it yet.
To me it seems like a pretty good deal, but I haven't done much research. The way the investments are described on the website they make it sound like there is almost no chance of default/loss. But most of these things pay 8-12%. Having an investment that pays that high of a rate seems to imply that there is significant risk.
To make investments you have to confirm yourself as an accredited investor, which was a bit annoying but wasn't that difficult. Then when the deals "go live" they sell out immediately. So if you don't set your alarm and log in the exact minute the deal starts you can't get in.
The fees seem about in line with what I would expect. They take 1% plus a flat $100 fee at origination of the deal. The $100 ends up being significant if you are investing in the 10k range, another 1%. Obviously if you are putting in 100k then it is less of a deal.
Just curious about what you guys think of this company. From a business standpoint it seems like a good model. Find the deals, chop them up, take 1% with the customer taking all the risk and providing all the capital.
From the investor standpoint it all depends how high the risk of default is. Time will tell for that.
Pretzel is offline   Reply With Quote
Old 02-12-2019, 05:04 PM   #2
coordi
Carpal \'Tunnel
 
coordi's Avatar
 
Join Date: May 2007
Location: a bundle of sticks
Posts: 19,000
Re: Yieldstreet.com - thoughts?

Sounds like same thing as prosper or lending club. There is a thread on here about that, somewhere. Statistics from established sites like this do show a low default rate. You can definitely make money doing it. Obviously know nothing about this site, but the precedent is there. You might be better off investing in a site with more history
coordi is offline   Reply With Quote
Old 02-12-2019, 05:32 PM   #3
JKC
journeyman
 
Join Date: Aug 2018
Posts: 271
Re: Yieldstreet.com - thoughts?

Quote:
Originally Posted by coordi View Post
Sounds like same thing as prosper or lending club. There is a thread on here about that, somewhere. Statistics from established sites like this do show a low default rate. You can definitely make money doing it. Obviously know nothing about this site, but the precedent is there. You might be better off investing in a site with more history

This may not be the thread, but I'd recommend against prosper/lending club for anyone considering it. The default rate is too high, they are taxed as normal income, and are likely to perform very poorly in a recession. I've been doing p2p lending for 5 years, letting my loans run out and putting the money in index funds.
JKC is online now   Reply With Quote
Old 02-12-2019, 05:42 PM   #4
Pretzel
journeyman
 
Pretzel's Avatar
 
Join Date: Feb 2003
Location: Portland, OR
Posts: 264
Re: Yieldstreet.com - thoughts?

The idea is similar to prosper and lending club. Difference is that yieldstreet invests in large loans (2-20 million) to real estate developers, shipping companies, etc and not small loans to individuals and small businesses.

I'm not planning to put any significant part of my money in this. Just signed up as moral support for my friendbworking there. Seemed like almost a can't lose from their side so I was wondering if I was missing something.
Pretzel is offline   Reply With Quote
Old 02-12-2019, 06:21 PM   #5
coordi
Carpal \'Tunnel
 
coordi's Avatar
 
Join Date: May 2007
Location: a bundle of sticks
Posts: 19,000
Re: Yieldstreet.com - thoughts?

Quote:
Originally Posted by JKC View Post
This may not be the thread, but I'd recommend against prosper/lending club for anyone considering it. The default rate is too high, they are taxed as normal income, and are likely to perform very poorly in a recession. I've been doing p2p lending for 5 years, letting my loans run out and putting the money in index funds.
No, that's good insight. It's been a significant amount of time since I've looked into it.

OP, what you are missing is no one is going to take an 8-12% loan on millions if they can get a better rate elsewhere, which means the lendee's aren't going to be prime. Conversely, no one would crowd source 8-12% out of the goodness of their heart
coordi is offline   Reply With Quote
Old 02-12-2019, 06:49 PM   #6
ibavly
2010 PSOP Champion
 
ibavly's Avatar
 
Join Date: Feb 2010
Location: Check out my gang listing
Posts: 23,965
Re: Yieldstreet.com - thoughts?

Quote:
Originally Posted by coordi View Post
No, that's good insight. It's been a significant amount of time since I've looked into it.

OP, what you are missing is no one is going to take an 8-12% loan on millions if they can get a better rate elsewhere, which means the lendee's aren't going to be prime. Conversely, no one would crowd source 8-12% out of the goodness of their heart
This

If you do due diligence and find a good deal that's cool, but the big players grab all the good stuff before you even hear about it
ibavly is offline   Reply With Quote
Old 02-13-2019, 01:10 AM   #7
kekeeke
adept
 
Join Date: Apr 2011
Posts: 861
Re: Yieldstreet.com - thoughts?

Quote:
Originally Posted by ibavly View Post
This

If you do due diligence and find a good deal that's cool, but the big players grab all the good stuff before you even hear about it
In general I hate this mindset so much. In life the pie is big my friend, there are plenty to go around for everyone. Plus 8-12% private money is fairly cheap as someone whos going to be on the market for private money. Here in canada you would need a relationship with the "private money" to borrow at 12%, let alone 8%, in fact sign me the hell up I will have deals for you.

Anybody who wants to loan at 8% backed up by quebec city real estate equity/collaterals needs to private message me. No amount under 50k CAD, short term loans (3 years - 5 years max).

Lets go.
kekeeke is offline   Reply With Quote
Old 02-13-2019, 04:52 AM   #8
somigosaden
grinder
 
Join Date: Dec 2013
Location: sean-a-paul, somigosaden
Posts: 539
Re: Yieldstreet.com - thoughts?

Pretzel, I don't understand what exactly you're trying to get out of this thread. It doesn't sound like you're all that interested in partaking in the service they offer, although it looks like most of the responses here deal with that. Are you looking to invest in Yieldstreet? Are you interested to know if your friend will have to look for a new job in a couple years should Yieldstreet crumble?

I'm reading your post as analogous to: My friend got a job at eBay, so I sold something there and may sell something else. Seems like eBay has a sweet business model just facilitating transactions while not needing any inventory. What do you guys think of eBay? // And then you get a bunch of responses telling you that it may or may not be worth it to sell on eBay because of chargebacks and Amazon and Walmart.
somigosaden is offline   Reply With Quote
Old 02-13-2019, 10:27 PM   #9
Pretzel
journeyman
 
Pretzel's Avatar
 
Join Date: Feb 2003
Location: Portland, OR
Posts: 264
Re: Yieldstreet.com - thoughts?

Fair point about not having a clear question.

The deals described are pretty high returns (8-12%) but sound like really low risk based on the descriptions. It seemed a little too good to be true to me. I wondered if people had experience with these types of loans to get a sense of how risky they really are.
Pretzel is offline   Reply With Quote
Old 02-14-2019, 03:28 AM   #10
TheGodson
veteran
 
TheGodson's Avatar
 
Join Date: Mar 2013
Location: Merica!
Posts: 2,216
Re: Yieldstreet.com - thoughts?

There is definitely risk involved. You don't get a nice investment wrapped up in a cute box that gives high return without risk.

Yieldstreet checks out as trusted on scamadviser.com. I also skimmed the website. In the FAQ it says that the asset classes are real estate, litigation finance, marine finance, and commercial finance.

I also read that they charge a 1-4% annual management fee. Yikes. This to me would be a deal breaker. It could make sense to scout out good deals and contact the borrowers directly.
TheGodson is offline   Reply With Quote
Old 02-14-2019, 02:53 PM   #11
TeflonDawg
Pooh-Bah
 
TeflonDawg's Avatar
 
Join Date: Oct 2006
Location: RetiredExtremelyDangerous
Posts: 4,671
Re: Yieldstreet.com - thoughts?

Need some context on default rates. Default rates in the longest bull market in human history vs in a correction, recession, or worse will be very different things...
TeflonDawg is offline   Reply With Quote
Old 02-14-2019, 04:11 PM   #12
Pretzel
journeyman
 
Pretzel's Avatar
 
Join Date: Feb 2003
Location: Portland, OR
Posts: 264
Re: Yieldstreet.com - thoughts?

Quote:
Originally Posted by TheGodson View Post
I also read that they charge a 1-4% annual management fee. Yikes. This to me would be a deal breaker. It could make sense to scout out good deals and contact the borrowers directly.
They are transparent with the fees and most of the deals I have seen are 1% plus $100 the first year and $30 each additional year. Yeah, if they were 3-4% I would stay away

Quote:
Originally Posted by TeflonDawg View Post
Need some context on default rates. Default rates in the longest bull market in human history vs in a correction, recession, or worse will be very different things...
That's a good point. They claim to have "low correlation to the stock market" but if the world economy tanks like it did in '07 i'm sure the default rates would skyrocket.
Pretzel is offline   Reply With Quote
Old 05-07-2019, 06:56 PM   #13
DavidDixonWPT
stranger
 
Join Date: May 2019
Posts: 1
Re: Yieldstreet.com - thoughts?

Hey everyone, first time posting. Helped develop the WPT video game for Playstation some years back, as well as other titles.

So one of my clients for the last 5 years is one of the companies that you would be investing in if you invested in Yieldstreet, and I can tell you from first hand experience that the interest rates are not only real, they're on the lower end when you look at the full picture, meaning if you had industry knowledge and the capital to invest, you can get even higher rates than that going right to the source.

If you're making 8%, my client is making 3 - 4 times that. I was bringing him the customers that he was making loans and advances to, being paid low 6 figures to do so, working part time.

His default rates were 6% to 8%, industry average is about 13%, but it goes up as the credit quality of the borrower drops. The loans / advances are priced higher to account for the high default rate, traditional banks are around 2% default rates

Many of these loans are short term, 2 to 6 months. He was making so much because he's flipping that money multiple times a year, so while you're making interest once, he's making it a few times.

The key to making more than what you would make on Yieldstreet is having access to a continuous flow of customers, which is what I did for him.
DavidDixonWPT is offline   Reply With Quote

Reply
      

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


Forum Jump


All times are GMT -4. The time now is 11:50 PM.


Powered by vBulletin®
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
Copyright 2008-2017, Two Plus Two Interactive
 
 
Poker Players - Streaming Live Online