Accredited VS Non-Accredited Investors!

Does it matter if I’m not an accredited investor? Wait, what is an accredited investor?

By Sean Flanagan

In short, an accredited investor is someone who has a high net worth. He/She has an annual earned income over $200,000 ($300,000 with a spouse)

OR

Has a net worth exceeding $1M excluding his/her primary residence.

If an investor does not meet that requirement then by default they are a non-accredited investor. 

Why does it matter? Well, the SEC (the Securities and Exchange Commission) regulates and determines the requirements for being an accredited investor. You can read more on the SEC website here, but that is the general gist of it. 

When it comes to real estate often times the apartment buildings are purchased by more than one single person. This is due to the size and cost of an apartment building. Yes, there are individuals who purchase large apartment buildings. Often times, it is usually either an institution or group who raise money to purchase apartments. The simple act of pooling investors money together to be invested in real estate with the expectation of a return on their capital is called “syndication”. 

Different syndicators have different deal structures set forth by the SEC. Some of the real estate offerings are only open to “accredited investors” and other offerings are open to both “accredited investors” and non-accredited investors. 

See why it matters now if you are accredited or non-accredited. The SEC even goes as far as if you can market or advertise your real estate offerings to the general public or not. Think of it this way for accredited investors the SEC makes it easy to get an offering up and running. For an offering that is open to non-accredited investors it takes much longer and cost a lot more in legal fees. Why is that?

So, how do I find out about real estate offerings that I actually could participate in? You just have to know which syndicators are doing deals open to both accredited and non-accredited investors. 

Still lost, no worries send me an email at invest@jamesonassetmgmt.com and we can talk about your investment goals.

The best investment on earth is earth!

~ Sean

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