All Forum Posts by: Amy Wan

@Tj Hines or, there are a ton of non-accredited investors who want to invest but the regulations bar them from doing so ;)

@Taylor L. Haha, sadly, yes.

Just cause you're the latest of a string of people asking for these deals, I'm going to plop this here:

https://www.biggerpockets.com/forums/432/topics/746959-accredited-investor-definition?highlight_post=4393210&page=1#p4393210

The SEC Investor Advocate seems to think that non-accredited investors dont have an appetite for private deals.

If you only want 6%, you might as well invest in that CA pension fund bond. I believe its 6%, tax free, guaranteed by the state...

@Taylor L. Here's the concept release he was talking about: 

https://www.sec.gov/rules/concept/2019/33-10649.pdf

It looks like a frightening document but the accredited investor discussion starts on page 32 and its about 30 pages long (and its double spaced)--so not THAT bad. Basically, the SEC has been talking about amending the definition of an accredited investor for years...as long as I can remember.

I came across a funny article this morning.

Your SEC Investor Advocate--who is supposed to advocate on behalf of investors--doesnt seem to think that non-accredited investors want to invest in private offerings, and that private companies don't want non-accredited investor money. This is in context of a discussion to revise the definition of accredited investors.

Funny thing is, I feel like every other day lately, there's been someone asking on a forum about finding syndication deals that will take non-accredited money. I guess some of you have to write your Investor Advocate.

Letter here:
https://cdn.crowdfundinsider.com/wp-content/uploads/2019/08/RIck-Fleming-Concept-Release-Comment-s70819-5800855-187067-1.pdf

You're basically paying the syndicator to spend the time and energy to do all the management and work for you. Thus, less return but less time.

Crowdfunding sites tend to have sponsors who are not newbies, but also sometimes lower quality deals. It really depends on the site. Every site tends to have its own focus. Single sponsors require more (or, I should say, the same amount of) vetting by you for track records and such. You can see @Ian Ippolito's realestatecrowdfundingreview website--he did a lot of due diligence on all the sites.

Some sponsors who are doing 506b deals accept non-accredited investors.

@Account Closed depends on how many PPMs that GC has read before. If they have some securities experience under their belt, drafted some PPMs before, or read at least couple dozen, they may be fine. Otherwise, I always stick to specialists over generalists. The GC's job oftentimes isn't to be the expert in the law, but to know and be able to find and facilitate the process with the experts.

I'll add one:

--Not properly structuring the deal (and disclosing all the ins and outs of the structure)

--Bringing in bad business partners/co-sponsors or bad investors

Having done this type of work before, I should say there is a lot of nuance here. You can create one large fund that outlines the overarching plan. That does not dictate whether its a 506B or C--your investor strategy and marketing strategy dictates which exemption you should use.