Accredited vs Sophisticated investors

[Steve Veen]

If you are a Multifamily syndicator, I’d love your feedback on this:

What percentage of your deals require accredited investors only as opposed to being open for sophisticated investors?

Thanks,

Steve

[Brian Burke]

We can accept up to 35 non-accredited investors in each offering, because we use the 506(b) exemption.  This exemption allows non-accredited investors but prohibits advertising.  If we were to use the 506(c) exemption we would be allowed to advertise but we would be prohibited from accepting non-accredited investors.  I've done one 506(c) out of like 30+ syndications.  I really don't need to advertise because investors come to me from word-of-mouth and referrals, so if I don't need it there's no reason to restrict who I can accept just so I can advertise.