Accredited investors have the privilege to invest in certain assets and alternative investments that are unavailable to unaccredited investors. To be an accredited investor, you typically need to have a high net worth and/or high (and stable) income.
It can be a great idea to pursue investment opportunities for accredited investors if you fit the criteria. Many of these opportunities offer higher returns and/or greater passive income than many traditional investments that are available to all traders.
This article will explore some of the very best investment opportunities for accredited investors. Keep reading to learn more about what it means to be an accredited investor, as well as seven great investment opportunities for accredited investors.
Investment Opportunities for Accredited Investors
What is an accredited investor?
First, what exactly is an accredited investor? It’s important to understand the definition of an accredited investor before you explore investment opportunities that are meant solely for accredited investors.
An accredited investor can be either an individual or a business entity that has privileged access to trading securities. Due to their wealth and/or experience, these individuals or businesses don’t have the same need for regulatory disclosure filings that offer some measure of protection.
High net-worth individuals can be accredited investors, but so can banks, brokers, insurance companies, and trusts. To be considered an accredited investor, it’s necessary to fulfill at least one requirement regarding net worth, asset size, income, governance, or professional investment experience.
According to the SEC, an accredited investor must have gross (or joint) income surpassing $200,000 (or $300,000) in each of the two most recent years. There must also be an expectation that this income level is sustainable for the current year.
Accredited investor status is also available to people who have a net worth (or joint net worth) greater than $1,000,000. It’s important to note, however, that this sum does not include their primary residence.
What are investment opportunities for accredited investors?
Accredited investors receive the privilege of many benefits since they are considered financially stable and experienced.
In fact, certain investment opportunities are restricted only to accredited investors. For example, these can include:
- Shares in private placements
- Structured products
- Hedge funds
- Other private equity
Accredited investors also may have privileged investment access to various alternative investments, such as crowdfunded real estate investing.
In fact, this is what’s covered below, so read on to learn about seven great investment opportunities for accredited investors. (Note that some of them are also available to unaccredited investors.)
First National Realty Partners
First National Realty Partners is a highly-rated real estate investment opportunity for accredited investors only.
First National Realty Partners works much like a real estate investment trust. They own and lease properties, and their investors receive dividends. There is also the possibility for capital appreciation.
What sets First National apart is that they focus on institutional-quality offerings. In their case, this refers primarily 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. The asset management fee is 0.5% to 1.5%, depending on the deal. Since 2015, more than 1,400 investors have benefitted from an average return of 12% to 18%, far outpacing the stock market.
Click here to learn more about First National Realty Partners and see if it might be the right opportunity for you.
EquityMultiple has a unique offering that blends more traditional real estate investing with crowdfunding. The goal is higher returns than one typically gets with traditional investment opportunities.
Compared to some of the other firms reviewed here, EquityMultiple has a relatively low barrier to entry. The minimum investment for real estate notes is $5,000. For direct investment and investment pools, that number rises to $10,000 and $20,000, respectively.
EquityMultiple is backed by Mission Capital Advisors, and it was started with the goal of providing more commercial real estate opportunities than what is offered by traditional REITs.
Accredited investors appreciate EquityMultiple for its wide variety of asset classes and offerings, including preferred equity deals, senior debt deals, and much more. Investors can put all their eggs into one basket or spread their investment over multiple opportunities.
Click here to learn more about EquityMultiple and everything it has to offer.
RealtyMogul is another crowdfunding real estate platform that aims to provide higher rates of return than those offered by traditional markets.
RealtyMogul is available to both accredited and non-accredited investors, and its $5,000 minimum makes it one of the most accessible offerings reviewed here. The company has been around since 2012 but it has grown more in recent years. According to RealtyMogul, they have financed more than $2 billion in property value, with investors receiving more than $170 million in profits.
That said, RealtyMogul is still relatively new and doesn’t have the backing of a major firm (like EquityMultiple above). Other downsides include a relative lack of liquidity, and fees that can vary widely for different investments.
RealtyMogul does offer a variety of investments, and this may appeal to investors who want to spread their capital around. At the same time, some of their rules are rather complex and may be off-putting even to relatively experienced investors.
If you’d like to learn more about RealtyMogul, click here.
CrowdStreet offers accredited investors access to a variety of real estate projects. There are both private equity investments as well as single-asset projects and funds.
CrowdStreet has become one of the fastest-growing crowdfunded real estate opportunities. It features an intuitive website, great educational resources, and the ability to earn passive income and capital appreciation on real estate through fractional ownership.
The major downsides to CrowdStreet are that your investment is relatively illiquid and the account minimum is $25,000. That said, they are only open to accredited investors, for whom $25,000 isn’t necessarily a huge sum of money to invest.
CrowdStreet has a thorough 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 own due diligence.
Click here to learn more about CrowdStreet and its opportunities for accredited investors.
Streitwise provides real estate investment opportunities limited to one geographic area, which is the area of expertise for its management team. This approach aims to provide a high quarterly dividend, one that has returned nearly 10% annualized 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 a bit higher than many of the offerings reviewed here.
REITs like the one offered by Streitwise can be a great opportunity, especially when managed well. By focusing only on properties in St. Louis and Indianapolis, Streitwise aims to work within its area of expertise and deliver strong returns.
So far, Streitwise generally has. They have a solid loan-to-value ratio of 0.5, which suggests that they are appropriately leveraged and well-run.
To learn more about Streitwise’s REIT, click here.
Yieldstreet offers a crowdfunding investment platform that focuses not only on real estate investments but other alternative investment opportunities, including artwork.
Many investors may find Yieldstreet enticing as it offers a unique way to diversify with one platform. With a minimum investment of $10,000, you can start investing in a variety of assets, including art, marine, litigation, and real estate.
A big plus with Yieldstreet is that they are extremely transparent, providing detailed information for each investment and the expected annual return. Unfortunately, their fee structure is slightly complicated, and fees can vary from 0% to 2% yearly depending on the given investment.
Yieldstreet may provide outsized returns, but certain assets also carry much greater risk. It’s important (as always) to do your due diligence.
Click here to learn more about Yieldstreet and its variety of offerings.
Which is the best investment opportunity for accredited investors?
As an accredited investor, you have a great opportunity to invest in certain assets that aren’t 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 out by the higher 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, type of asset, and much more.
It’s worth taking your time exploring various options in depth to see what aligns best with your own investment strategy and preferences.
Related Real Estate Investing Reviews:
- First National Realty Partners Review
- Fundrise Review
- Yieldstreet Review
- CrowdStreet Review
- RealtyMogul Review
- Arrived Homes Review
- Streitwise Review
- EquityMultiple Review
- Groundfloor Finance Review
- Mashvisor Review