Investment payoff: Yieldstreet’s Park City Luxury Property Refinancing

Key takeaways

  • Yieldstreet partnered with Avatar Financial to finance a $13.1M loan.
  • The term was 12 months with a targeted return for investors of 8.65%.
  • The loan was paid in full, in line with its maturity.

Yieldstreet helped refinance an existing investment on the platform, and that refinancing paid off in full with gains hitting our targeted return for investors. 

Here’s what happened

In March 2021, we partnered with Avatar Financial (Avatar) to lend $13.1M to refinance an existing Yieldstreet investment.  Yieldstreet’s position in the new loan, a first mortgage, totaled $9.85M.  The term was 12 months and the targeted investor yield was 8.65%.

The refinancing was secured by an ultra-luxury house that was under construction and two single-family homes that had already been completed – all located in Park City, Utah. Construction on the ultra-luxury house was expected to finish in October 2021 and the plan was to sell the house and use the proceeds to repay investors.  

That property was 65% complete at the time of the loan and we marketed the investment based on an “as complete” loan to value ratio (LTV) of 35.6%.  In other words, we believed the value of the finished ultra-luxury home was far greater than the amount investors were lending. So, Yieldstreet’s investment was equivalent to 35.6% of the luxury home’s value once it was completed. Also, the LTV excluded the value of the two single-family homes that helped secure the loan.

Sign Up On Yieldstreet

The borrower remained current on their monthly interest payments, and in July 2021, sold the two single-family houses, de-risking a portion of the investment.  Yieldstreet investors were repaid their pro-rata share of approximately $3M in principal, roughly 30% of the initial investment. 

Construction of the ultra-luxury home was completed last fall and a Certificate of Occupancy was issued in December 2021.  The property was sold just before its March 2022 maturity.  Investors were paid in full and achieved the targeted yield.

The $10K question

Another way to look at this deal is to consider what would have happened had you invested the minimum of $10,000 when the deal launched in March 2021.  The investment was paid off a year later in line with the expected maturity.  The borrower returned all the principal, in this case, your $10,000 with a return that yielded approximately $700. 

You may be wondering why $700 and not $865?  Investors were being paid for the risk they took by lending the money.  Since 30% of the original capital was paid back early, some of the risk was removed and that de-risking left a smaller pool of capital on which the 8.65% targeted yield was achieved.

Learn more about the ways Yieldstreet can help diversify and grow your portfolio

How helpful is this content?

Share this article:

Join a community of 400,000+ members

  • Gain access to unique offerings previously reserved for the ultra-wealthy

  • Customize your portfolio for income, growth, or a balance of both

What investors are saying about Yieldstreet

Apr 2022

The due diligence, risk management, and product education materials are thorough, excellent, and easy to use and understand.

Manoj J
Member since 2019
Apr 2022

Excellent and unique selections that I can't find elsewhere.

Jonathan S
Member since 2019
Apr 2022

The platform delivers in a very concise manner. Easy to get a clear understanding at a glance from the web or mobile app.

Tim S
Member since 2021
The testimonials presented on this page have been provided by actual investors in Yieldstreet funds without compensation. Yieldstreet has selected the testimonials, and certain testimonials have been edited to remove personally identifiable information and for brevity. Testimonials were not selected based on objective or random criteria, but rather were selected based on Yieldstreet's understanding of its relationship with the providers of the testimonials. The uncompensated testimonials presented here may not be representative of other investors' experiences, and there can be no guarantee that investors will experience future performance or success consistent with the testimonials presented.

The Yield

Our weekly podcast providing ideas about how to make money work for you and bring you closer to your dreams.

Since inception, over $2.8B has been invested on Yieldstreet

Join today for free to access alternative investment opportunities.