First Investment as a Non-accredited investor

10 Replies

I'm looking to invest in a real estate project through crowdfunding. Nothing too big. Since Reg A+ quite a slew of new platforms have popped up offering deals to investors such as myself (non-accredited). I'm seeking advice on which of these sites would be best to put my money into. 

Here are a few that caught my eye: 

FundWisdom

ENDVEST

GroundFloor

I would appreciate it if you guys offered your feedback on these services, thanks! 

I admit that I'm not familiar with these particular platforms, but Reg. A+ offerings require SEC approval (which will likely take 3-6 months) before the issuer can actually start accepting investments. The early Reg. A+ offerings have been in "testing the waters" mode, meaning that they can accept non-binding indications of interest from investors, but can't take any money. Given that Reg. A+ just took effect last month, it may be several more months before we see those offerings "go live."

I don't know FundWisdom and only recently saw Endvest.  Groundfloor can do non-accredited deals because it uses Georgia intrastate exemption.  Like other intrastate rules, this allows all residents of a state to make investments in that state.  My assumption is that if you are not a GA resident, you won't be able to participate in those deals.

Regulation A+ is going to be a mess for a while.  Various states are proposing pre-notice filings during TTW and others are outright suing the SEC.  I wouldn't expect A+ offerings to take hold for a while until the smoke clears on this nonsense.  

Originally posted by @Vincent Keegan:

Here are a few that caught my eye: 

FundWisdom

ENDVEST

GroundFloor

I would appreciate it if you guys offered your feedback on these services, thanks! 

Sure. I'm doing an in-depth review of the top 60+ sites, so this is very fresh in my mind.

1) FundWisdom: not really real estate crowdsourcing. Investing in startups.

2) ENDVEST: they currently have one deal for accredited investors and one which may be available to nonaccredited investors. However, for both of them, you cannot actually conduct a transaction online. You express interest, and provide your email and phone number and then presumably a rep calls you.

Personally, this is a red flag. Many times, sites like this are just in beta, or belong to old-school brokers rather than real crowdfunding sites. Old-school brokers, have a conflict of interest because they only list their own properties/investments. They are a far cry from the marketplaces (at least the ones with good underwriting ) which tend to reject the majority of investments.

3) GroundFloor: they are not available to you because there only available in Georgia. They are unlikely to be available nationwide anytime soon because they are operating under a state law exemption, that doesn't allow national operation.

hope this helps!

@Vincent Keegan, there are other ways to offer crowdfunding investments available to non-accredited investors than Reg A+, because like other comments suggest, Reg A+ has quiet a way to come... Our crowdfunding platform doesn't solicit our offerings, and we do accept investments from both non-accredited & accredited investors. 

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HI, 

What has anybody tried or heard off holdfolio.com? This might be a site to check out let me know what you find out.

Thanks for the suggestion of FundWisdom. We are building a resource to help make it easier to find and place investment in these new offerings. We have focused primarily on platforms that feature startups, however we do cover real estate offerings through these platforms. We are seeing more interest in real estate from our audience so will look to partner with more real estate focused platforms. Ian's resource or Sal's of Crowdcrux looks like the best place to start for now.

It looks like this thread is a bit stale, but passive RE investing options for non-accredited investors have evolved a lot in the past 8 months. Top platforms such as RealCrowd and CrowdStreet will be offering RegA+ offerings this fall and Realty Mogul has followed in Fundrise's footsteps by offering a REIT product. I recently put together a comprehensive post on the RE investment options for non-accredited investors today - http://astudentoftherealestategame.com/passive-real-estate-investment-opportunities-for-non-accredited-investors/ 

I'm excited to see nonaccredited investors having more options. However, I am pretty disappointed with what I've seen so far.

The problem with all these new regulation A+ offerings is that it's so expensive to put them together that they have really high fees. On top of that, Fundrise explicitly states in their prospectus that they intend to dilute the shares further in order to prop up the return in the 1st few years.

At least the Realty Mogul offering isn't doing this. However the Fundrise Reit caps expenses at $1 million while Realty Mogul caps it at $1.5 million (3% on $50M ouch! And even more if they don't fund fully for any reason).

Due to the large expenses, all of these funds start off life digging themselves out of a huge hole. It's a race against time, and hopefully we don't have a downturn in the next couple of years. If we do, life could get difficult. 

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