Home 5 Industry 5 Understanding Accredited vs. Non-Accredited Investors: What It Means for You

Understanding Accredited vs. Non-Accredited Investors: What It Means for You

Understanding Accredited vs. Non-Accredited Investors: What It Means for You

When it comes to investing, the distinction between accredited and non-accredited investors holds significant weight. Understanding these terms and their implications is crucial for anyone looking to navigate the world of investments and finance. 

What is an Accredited Investor? 

An accredited investor is an individual or entity that meets certain income or net worth criteria set by the Securities and Exchange Commission (SEC) in the United States. These criteria are in place to ensure that accredited investors possess the financial sophistication and ability to bear the risks associated with certain types of investment opportunities, such as private placements, hedge funds, and venture capital. 

Who Qualifies as an Accredited Investor? 

In the U.S., an individual is considered an accredited investor if they meet one of the following criteria: 

  • They have an annual income of $200,000 or more for the past two years ($300,000 or more for married couples) with the expectation of the same income in the current year. 
  • They have a net worth exceeding $1 million, either individually or jointly with their spouse, excluding the value of their primary residence. 
  • Entities such as certain financial institutions, trusts, and organizations with assets exceeding $5 million may also qualify as accredited investors. 

The Significance of Accredited Status 

Accredited investors have access to a wider range of investment opportunities not available to non-accredited individuals. These opportunities often include private equity, hedge funds, and other alternative investments that may carry a higher level of risk but also offer the potential for greater returns. 

Non-Accredited Investors 

On the other hand, non-accredited investors do not meet the income or net worth requirements set by the SEC. As a result, they may have limited access to certain investment opportunities that are available to accredited investors. This regulatory distinction aims to protect less financially sophisticated investors from the higher risks associated with certain types of investments. 

Many real estate investment opportunities, particularly private placements and certain real estate funds, often limit participation to accredited investors due to regulatory requirements and the complex nature of these investments. This is because these opportunities may involve a higher level of risk and require a certain level of financial sophistication to navigate effectively. As a result, they are typically reserved for accredited investors who meet specific income or net worth criteria as defined by securities regulations. 

At REEP Equity, you do NOT have to be an Accredited Investor to invest in our properties and generate passive income. We prefer to open investment avenues to a wider range of hard-working individuals looking for new ways to make their money work harder for them.  

To learn more about our apartment investing opportunities, getting started is simple. Sign up to Join our Invest Network and have a conversation with our Investor Relations team to: 

  • Hear what has driven REEP to success and learn about the proven track record.  
  • Learn more about Multifamily investing and get all your questions asked.  
  • Better understand your financial objectives and how we can help you reach them.  
  • Learn the process of investing in real estate.  
  • Be one of the first to know about REEP’s investment opportunities.  

Other Articles

Don’t Miss a Beat

Sign-up For Emails About Industry News and More

Find us on your favorite social media channels

Skip to content