Ways Around Accredited Investor Qualifications
Sorry for the one paragraph, I had spaces in my post, not sure where they went.
Check out groundfloor.us - they do not require accredited status.
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- Real Estate Broker
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there are NO way around them if its a requirement of a certain fund or company . Search for those that allow non accreds they are out there.
in our world we do ONE note one investor and you don't have to be accredited.. although usually a waiting list to get a note but they get filled in 30 to 45 days..
@Robert Naucke Jr, most of the crowdfunding companies don't require accreditation but i would thread carefully and read their reviews. It's usually not easy fro a newbie to get funding unless you have someone to back you.
Originally posted by @Temitope Adebayo:
@Robert Naucke Jr, most of the crowdfunding companies don't require accreditation but i would thread carefully and read their reviews. It's usually not easy fro a newbie to get funding unless you have someone to back you.
This is incorrect. Most crowdfunding offerings DO require accreditation, even while there is an increasing number of offerings that don't.
@Larry Fried @Robert Naucke Jr
Thanks Larry for the correction, well taken.
I found your article, please can you give me more details about this company. Thanks.
Have I Found the Holy Grail of Passive Real Estate Investing?
@Robert Naucke Jr, the requirement that one must be accredited to invest in certain alternative asset classes is regulated by the SEC, so no, no way around it... unless that person/company wants to go to jail. While many agree the accredited status is high, there are reasons for it (namely to protect everyone involved, especially the investor) and the SEC has also allowed non-accredited/sophisticated folks to invest in these types of deals through a different structure - the 506(b).
It is 100% okay for you to reach out to Sponsors or other people putting together the deals you're referring to. In fact, that is the ideal situation for Sponsors/those raising money. Requirements will still be the same though - past relationship, understanding of investments knowledge/accredited status, etc. The SEC doesn't put steadfast rules on it (i.e. "Sponsor must know investor for 21 days exactly before presenting them with an investment opportunity"), but some guidelines are in place that all Sponsors/Operators in the space will follow.
That being said, you're best off finding a Sponsor who may offer investments structured as 506(b) if you really want to get in to the space. Keep in mind though that most have a minimum investment of $50K-$100K with hold periods anywhere from 3-10 years (ish, this varies of course), so you'll be tying up a good chunk of your solo401k as most of the time it's advised that these types of deals be considered "illiquid."
Some sponsors have a different interpretation of the rules. I reached out to one recently. Because I'm not accredited, one of them would only consider me for a Reg D. 501(b) offering. But since I don't have a "pre-existing relationship" with them, they won't accept my money. I was hoping that we could start a "relationship" (that sounds funny every time I say it, lol) for future offerings but I guess not. :-/
You should just look into buying some crowdfunded REIT's like Fundrise or Realty Mogul's eREIT. If you only have $83k to invest, that's not going to get you into many deals, so you're not going to have a lot to choose from. At least with the REIT's you get diversification and the minimum is very low.
As far as pooling money with others, all people in the deal have to be accredited. I guess many of these offerings allow you to "self-certify," but I would never suggest lying about your accreditation status.
Another one is Rich Uncles, which is focused on commercial RE. Check those REIT's out, I think they're good deals for aspiring investors.
On the other hand, if you are really determined, I would suggest not only networking with sponsors you find on here or online, but joining a mentoring group like Lifestyles Unlimited, as that way you can establish relationships with people doing deals, plus you can learn a lot about how multifamily real estate and syndications work.
Realty Mogul and Fundrise both have offerings that do not require you to be accredited. I would check them out.
@Jillian Sidoti I got really excited reading about Realty Mogul and Fundrise and others but then I read that if you aren't an accredited investor you can only invest 5% of your earnings! I want to invest significantly more and right now 5% of my earnings is just a waste of time. Do these sites check your income?
Anyone still losing money due to lack of accreditation? I’m currently going through primerica to get my series 65.
Anyone else interested in this?