The qualifications for an individual or business to be an accredited investor are detailed by the Security and Exchange Commission’s (SEC) in its Regulation D. Accredited investors can trade and invest in assets that aren’t registered with financial authorities.
Individuals can qualify as accredited investors based on income and net worth. Business entities, like investment companies, can qualify by having assets of over $5 million or having owners who are accredited investors. There’s no formal process for becoming an accredited investor or certification to state that you are one.
The basic idea behind accredited investors is this: For an economy to grow, new businesses, ventures and properties need investors. Entrepreneurs need investors to get up and running before they go through the process of an initial public offering (IPO) or registering a security. Both can be lengthy, expensive processes. However, the government wants to protect individual investors who may not have the experience and knowledge necessary to make informed choices or have the financial stability to be able to afford to lose their investment. Therefore, these investments aren’t available to just anyone.
Of course, accredited investors deal with registered securities and established companies as well. However, the range of investments available to them is larger than it is to the average investor.
Why Even Individual Accredited Investors Need Guidance
Even if your income and/or net worth qualifies you to be an accredited investor, that doesn’t mean you should make investments on your own — especially if you’re planning to expand your investment portfolio into a new area like real estate. It’s smart to trust your money to real estate investment professionals with years of experience and an in-depth knowledge of all real estate sectors and long-term real estate and economic trends.
By pooling their clients’ money, they can take advantage of opportunities that individual investors can’t. Further, they work closely with those involved in the day-to-day management of these assets to further ensure their success.
Get in Touch with Us to Find out More About Adding Real Estate to Your Portfolio
Call Realty Capital Partners (RCP) at (469) 533-4000 or email us at RCP@rcpinvestments.com. Tell us what your goals are, and our experienced real estate investment professionals will tell you how we can work together to find the right investment opportunities for you.