Accredited investors have the privilege of investing in certain assets and alternative investments that are not available to non-accredited investors. To be an accredited investor, you usually need to have a high net worth and/or a high (and stable) income.
It may be a good idea to pursue investment opportunities for accredited investors if you fit the criteria. Many of these opportunities offer higher returns and/or more passive income than many traditional investments available to all traders.
This article will explore some of the best investment opportunities for accredited investors. Keep reading to learn more about what it means to be an accredited investor, plus seven great investment opportunities for accredited investors.
Investment opportunities for accredited investors
Who is an accredited investor?
First, what exactly is an accredited investor? It is important to understand the definition of an accredited investor before exploring investment opportunities that are intended only for accredited investors.
An accredited investor can be either an individual or a business entity with privileged access to trading securities. Because of their wealth and/or experience, these individuals or companies do not have the same need for regulatory disclosure files that provide some measure of protection.
High net worth individuals can be accredited investors, as can banks, brokers, insurance companies, and trusts. To be considered an accredited investor, it is necessary to meet at least one requirement regarding net worth, asset size, income, governance, or professional investment experience.
According to the Securities and Exchange Commission, an accredited investor must have had gross (or joint) income in excess of $200,000 (or $300,000) in each of the last two years. There must also be an expectation that this level of income is sustainable for the current year.
Accredited investor status is also available to people with a net worth (or combined net worth) of greater than $1,000,000. It is important to note, however, that this amount does not include their primary residence.
What are the investment opportunities for accredited investors?
Accredited investors have the privilege of many advantages as they are considered financially stable and experienced.
In fact, some investment opportunities are restricted to accredited investors only. For example, these could include:
- Participate in private placements
- structured products
- hedge funds
- other private equity
Accredited investors may also have privileged investment access to several alternative investments, such as publicly funded real estate investment.
Indeed, that is what is covered below, so read on to learn about seven great investment opportunities for accredited investors. (Note that some are also available to non-accredited investors.)
First National Real Estate Partners
First National Realty Partners is a highly rated real estate investment opportunity for accredited investors only.
First National Realty Partners operates much like a real estate investment trust. They own and rent real estate, and their investors receive dividends. There is also the possibility of capital increase.
What sets First National apart is that it focuses on corporate quality offerings. In their case, this primarily refers to retail spaces that feature a stable national brand, such as Aldi, Dollar Tree, or Walmart (among many others).
To invest with First National, there is a $50,000 minimum per deal. Asset management fees are 0.5% to 1.5%, depending on the deal. Since 2015, more than 1,400 investors have benefited from an average return of between 12% and 18%, far outperforming the stock market.
Click here to find out more about First National Realty Partners and to see if this might be the right opportunity for you.
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Multi
EquityMultiple has a unique proposition that blends traditional real estate investing with crowdfunding. The goal is higher returns than one would normally get through traditional investment opportunities.
Compared to some of the other companies reviewed here, EquityMultiple has a relatively low barrier to entry. The minimum investment for real estate bonds is $5,000. For investment pools and private equity, this figure increases to $10,000 and $20,000, respectively.
EquityMultiple is backed by Mission Capital Advisors and was started with the goal of providing more commercial real estate opportunities than traditional REITs offer.
EquityMultiple is appreciated by accredited investors for its broad range of asset classes and offerings, including preferred stock deals, large debt deals, and much more. Investors can put all their eggs in one basket or spread their investment across multiple opportunities.
Click here to learn more about EquityMultiple and all it has to offer.
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RealtyMogul
RealtyMogul is another real estate crowdfunding platform that aims to provide higher rates of return than those offered by traditional marketplaces.
RealtyMogul is available to both accredited and non-accredited investors, and the $5,000 minimum makes it one of the most accessible offers reviewed here. The company has been around since 2012 but has grown more in recent years. According to RealtyMogul, they’ve funded more than $2 billion in real estate value, with investors getting more than $170 million in profits.
However, RealtyMogul is still relatively new and doesn’t have the backing of a major company (like EquityMultiple above). Other downsides include the relative lack of liquidity and fees, which can vary widely for different investments.
RealtyMogul offers a variety of investments, and this may attract investors who want to spread their capital around. At the same time, some of their rules are rather complex and may be inappropriate for even relatively experienced investors.
If you would like to learn more about RealtyMogul, click here.
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CrowdStreet
CrowdStreet provides accredited investors with access to a variety of real estate projects. There are private equity investments as well as single-origin projects and funds.
CrowdStreet is becoming one of the fastest growing crowd funded real estate opportunities. It features an easy-to-use website, great educational resources, and the ability to earn passive income and raise capital on real estate through fractional ownership.
The main downsides to CrowdStreet are that your investment is relatively illiquid and the account minimum is $25,000. However, it is only open to accredited investors, for whom $25,000 is not necessarily a huge amount of money to invest.
CrowdStreet has a comprehensive vetting process, but projects may vary in terms of success (as is common in real estate). It’s always a good idea to do your due diligence.
Click here to learn more about CrowdStreet and the opportunities available to accredited investors.
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streetwise
Streitwise offers real estate investment opportunities limited to one geographic region, which is the area of expertise for its management team. This approach aims to provide high quarterly earnings, a return of approximately 10% annually over the past four to five years.
Streitwise is open to both accredited and non-accredited investors, and the account minimum is $5,000. In terms of fees, Streitwise charges a 2% annual fee, which is slightly higher than many of the offerings reviewed here.
REITs like those offered by Streitwise can be a great opportunity, especially when well managed. By focusing solely on real estate in St. Louis and Indianapolis, Streitwise aims to operate in its area of expertise and generate strong returns.
So far, Streitwise in general. They have a fixed loan-to-value ratio of 0.5, which indicates that they are adequately leveraged and well managed.
To learn more about Streitwise’s REIT, click here.
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Yeld Street
Yieldstreet offers a crowdfunding investment platform that not only focuses on real estate investments but other alternative investment opportunities, including art businesses.
Many investors may find Yieldstreet attractive because it offers a unique way to diversify using a single platform. With a minimum investment of $10,000, you can start investing in a variety of assets, including art, navy, litigation, and real estate.
A big advantage with Yieldstreet is that it is very transparent, providing detailed information on each investment and the expected annual return. Unfortunately, their fee structure is a bit complex, and fees can vary from 0% to 2% annually depending on the specific investment.
Yieldstreet may offer great returns, but some assets also carry much greater risk. It is important (as always) that you do your due diligence.
Click here to learn more about Yieldstreet and the variety of offerings.
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What is the best investment opportunity for accredited investors?
As an accredited investor, you have ample opportunity to invest in certain assets that are not always available to other investors. Some of the investment opportunities for accredited investors reviewed above may also be open to non-accredited investors, although they may be priced in accordance with minimum deposit requirements.
The best investment opportunity for you as an accredited investor will vary greatly depending on your personal preferences, including rate of return, risk tolerance, asset type, and more.
It is worth taking your time to deeply explore the various options to see what best aligns with your investment strategy and preferences.
