Who is an Accredited Investor?
An accredited investor is a person or entity that is allowed to invest in securities, such as private real estate offerings, that aren't registered with financial authorities (SEC).
In order to be considered an accredited investor you must meet one of the following requirements:
- Annual income of $200,000, or $300,000 if married, for the previous two years with the expectation of earning at least the same amount in the current year.
- A net worth of at least $1 million (excluding your primary residence), either individually or jointly.
Accredited investors are allowed to invest in these unregistered securities because they are deemed to be "more sophisticated" and therefore don't need the same protection from regulatory agencies as non-accredited investors.
What if I'm Not an Accredited Investor?
Luckily, if your not an accredited investor you may still be able invest in these types of private offerings. Rule 506(b) of Regulation D allows unlimited accredited investors and up to 35 non-accredited investors to invest in a private placement.
It would be the responsibility of the issuer of the security, such as Babylon Property Group, LLC, to determine if a non-accredited investor is sophisticated enough to understand the risks involved in dealing with unregistered securities.
The Bottom Line
Whether you are an accredited or non-accredited investor, there are ways you can invest in unregistered securities such as private real estate offerings or other alternative investments.
Babylon Property Group, LLC can assist both accredited and non-accredited investors who are interested in private real estate investments. For more information please contact us by phone at (631) 253-1609 or email at email@example.com.