Whenever you are researching real estate, you may frequently come across the term 'accredited investor.' This is especially true if you are looking into real estate or multifamily investments. Accredited investors are individuals or groups of people that have the ability to make riskier investments because of their experience and financial status. They are integral part of real estate crowdfunding efforts, which enable even those without a lot of financial means to be able to make investments in real estate. There are a few facts about accredited investors that you should know before you get involved with any multifamily real estate accredited investors.
Many novice investors are not able to invest in any risky investments simply because of their lack of experience and financial capacity. However, accredited investors have the ability to invest in many different ventures, no matter the risk. They have the money and professional knowledge to put into assets that might not be available to everyone else because of their understanding of the complexities of investments.
In order to be qualified as an accredited investor, they must have a net worth of at least $1 million. This means that they should have earned that much money throughout their lifetime. When net worth is calculated, it does not include the money from your spouse or the value of your primary home.
Accredited investors are also either registered brokers or investment advisors. This provides them with the training and knowledge to make smart decisions with their money. It also enables them to be involved in crowdfunded investments, because they will be responsible for other people's money as well. This job experience gives them the professional knowledge to deal with many investment complexities.
To be considered an accredited investor, they must also continue to make a high income each year. Those who have made $200,000 as an individual for the past two fiscal years, you can stay as an accredited advisor. However, if things are expected to change in the following year, this could hurt your chances of staying in this status. If you are a part of a married couple, you must both make at least $300,000 collectively every two years in order to stay on as an accredited investor.
These are a few facts to help familiarize you with the role of an accredited investor in your joint or crowdfunded investment. These individuals are great resources to help you make the investments you want without having the financial means to do so. If you are interested in multifamily real estate accredited investors, contact us to hear more about how we can help you today.