Accredited investors have access to a greater variety of investment alternatives, which, in turn, helps them to make better educated decisions concerning their own finances. If you are interested in becoming an accredited investor, you can find out more information here.
Who Is Considered to Be a Qualified Accredited Investor?
Accredited Investor Criteria for “Individuals” (Must fulfill one of the followings)
Net worth over $1 million, excluding primary residence.
Income over $200,000, or $300,000 included with a spouse, in each of two prior years with a reasonable expectation to earn the same for the current year.
Investment professionals in good standing holding Series 7 securities license, the Series 65 investment adviser license, or the Series 82 private securities offerings license.
General partners, directors, or executive officers of the company selling the securities.
Certain "knowledgeable employees" of investments in a private fund.
Accredited Investor Criteria For “Organizations” (Must fulfill one of the followings)
Entities owning more than $5 million in assets.
Entity types that qualify include corporations, LLCs, trusts, partnerships, employee benefit plans, 501c(3) organizations, or a "family office" or "family client" of the entity.
Entities where all the equity owners are accredited investors.
Registered investment advisers and SEC-registered broker-dealers.
A bank, insurance company, business development company, registered investment company, or small business investment company.
How To Demonstrate That You Meet The Accredited Investor Requirements
It is imperative that you give evidence that you are an accredited investor in order to participate in restricted investment opportunities. If you are interested in taking part in limited investment possibilities, it is vital that you submit this evidence.
The vast majority of investors are under the mistaken assumption that accredited investors are required to go through an official "accreditation procedure." However, this is not the case. The Securities and Exchange Commission (SEC) stipulates that companies that trade in unregistered securities must evaluate whether or not individuals who are considering investing in those securities meet the requirements necessary to be considered accredited investors.
Before an investor may be accepted as a shareholder in one of these companies, the company will frequently request that the investor provide documents and financial reports for the company to review. Below are the most common documents/steps the companies might ask of you in order to verify your accredited investor status:
Fill out a questionnaire
Tax returns
W-2 forms
Credit report
Any other documents showing your net worth
If you don’t want to manually provide these sensitive documents to every private security company you choose to work with, as an alternative, you also have the option of submitting a 3rd party verification letter proving your accreditation. We will discuss who are those qualified individuals below.
Who Can Write a Letter for an Accredited Investor?
As a result of Rule 506(c), accredited investors have the option to submit a letter of verification as an accredited investor from the following individuals:
a registered broker dealer
a tax attorney
a certified public accountant or
A registered investment advisor
This verification letter does not follow any specific standards or recommendations that were provided for its structure. It is sufficient for it to just indicate that the investor satisfies the conditions for accreditation in order for it to be considered satisfactory. In addition to this, it should clarify the requirements the investment has met effectively. If an investor chooses to employ a method that involves a third party for the purposes of verification, then they are able to avoid the more conventional technique, which is for the investment vehicle to manually check the investor's status.
As soon as their status has been confirmed, they will be allowed to start participating in the investment opportunity of their choosing as soon as it becomes available.
As An Accredited Investor, You Get Exclusive Access To The Best Apartment Syndication Investment Opportunities
Real estate syndication is one of the most rewarding investment options that is open to accredited investors, and these investors ought to be aware of the availability of this opportunity as well as the fact that it exists. One of the most major benefits provided by this approach is that the property, once it has been purchased, is administered by the syndicator. The passive investors (LP) won’t have to take on the usual tasks a landlord normally would, such as collecting rent, interacting with renters, and responding to unforeseen circumstances. Real estate syndication may be a good choice for qualified investors who are searching for a passive investment that will put their money to work while they rest and take it easy at the same time.
WE'RE HONORED TO BE IN BUSINESS WITH YOU
Building wealth doesn’t always require you to do all the work you normally would as an independent real estate owner/investor. You can also accomplish the same goal by taking advantage of a syndicated real estate project.
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