Accredited vs. Non-Accredited Investors: What’s the Difference and Why It Matters

I don’t know about you, but I am a goal driven individual. 

I am constantly setting goals, failing, getting up, figuring out a new way and trying again. It is a lot of work and often exhausting. But I really do not know any other way to move forward.  

One of the goals I hold dearest is this one: 

#1. To move my non-accredited friends into the accredited classification and to move my accredited friends into financial freedom. 

After all, it’s a rare individual that goes from nothing to everything overnight. It is often a series of well-planned steps.  

So, as I promised last week I will help you understand where you are classified as an investor. This will help you determine your plan and set your next financial goal. 

Knowing your investor status is something that you will need to know for every private investment you are considering, as the investor sponsor MUST know this answer to satisfy his/her legal requirements. 

You will be classified as accredited or non-accredited. Determining which is simple. 

Accredited Investor

Definition: An accredited investor meets specific income, net worth, or professional criteria set by the Securities and Exchange Commission (SEC). The criteria include: 

1. Income:

  • An individual with an annual income exceeding $200,000 (or $300,000 together with a spouse or spousal equivalent) in each of the last two years, with the expectation of maintaining that income level in the current year. 

2. Net Worth:

  • An individual or a married couple with a net worth exceeding $1 million, excluding the value of their primary residence. 

3. Professional Credentials:

Certain professional certifications, designations, or credentials recognized by the SEC, such as a Series 7, Series 65, or Series 82 license.

4. Other:

There is also criteria for entities, trusts and corporations. We will not go into those in this newsletter. Call me if you need this information. 

Non-Accredited Investor

Definition: A non-accredited investor does not meet the financial or professional criteria established by the SEC to be considered accredited. 

Characteristics: 

  • May have less financial experience and resources compared to accredited investors. 

  • Subject to greater regulatory protections and disclosures in investments, ensuring they are fully informed and protected from potential losses. 

Currently, StoneCrest Prosperity Fund is accepting both accredited and non-accredited investments from people with whom we have an existing relationship. 

We decided to do this exemption (506b), to allow everyone we know the opportunity to become involved in Main Street Real Estate investing, regardless of their classification. 

After all, that is the best way I know to achieve Goal #1, above.

This will be changing soon. We will only be able to accept investments from accredited investors once we change to a 506c.  

Once we have allowed the opportunity to invest to all our non-accredited friends and family, switching to a fund that accepts only accredited investors was the next step. Being able to advertise will accelerate our progress.

We know that in order to achieve the maximum level of returns for our investor partners we need to add properties to the fund on a consistent basis…… Which requires a consistent influx of funds……. Which requires more investors. Its all part of the plan.

Please call me if you are considering investing in our real estate fund. I will answer any question you have so you can make an informed decision. I have no desire to “sell” you an investment, only to improve your financial well-being. 

As always we are here to help you achieve more wealth with less work. Give us a call or consider joining our investment club the StoneCrest Equity Partner Alliance, where you will be the first to know about upcoming opportunities, get invited for exclusive site visits and receive even more in depth knowledge on syndications.

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CALL US: 509-224-3844
CALL US: 509-224-3844