Can You Invest in Apartment Deals If You're Not an Accredited Investor?
Most apartment syndications are limited to accredited investors, so many beginners can't join them. You have other routes: REITs, crowdfunding platform funds, Regulation Crowdfunding and Regulation A offerings, and, if the sponsor already has a substantive relationship with you, one of the few spots a Rule 506(b) deal may allow. Knowing which bucket you're in comes first.
New to this? Start with our guide to how to invest in apartment buildings as a beginner.
Where non-accredited investors can go
Non-accredited investors can use REITs, platform funds, Regulation Crowdfunding, Regulation A or a few spots in a 506(b) deal.
| Route | Open to non-accredited? | Notes |
|---|---|---|
| Rule 506(c) syndication | No | Every investor must be verified as accredited |
| Rule 506(b) syndication | A few, if sophisticated | Sponsor can't advertise; extra disclosure required |
| Regulation Crowdfunding | Yes, with limits | Up to $5 million per issuer per 12 months, through a registered portal |
| Regulation A Tier 2 | Yes, up to 10% of the greater of income or net worth unless listed | Up to $75 million per 12 months |
| REITs and platform funds | Often yes | Offering type and minimums vary |
How the limits work
Under Reg CF, non-accredited investors have yearly limits across all offerings, based on income and net worth and adjusted for inflation. Under Regulation A Tier 2, non-accredited investors are capped at 10% of the greater of income or net worth unless the shares are listed. The limits apply to you, not the sponsor, and the platform will ask for your numbers. See Regulation Crowdfunding for real estate.
Why can't a sponsor just let you in?
In a 506(c) deal, accepting even one non-accredited investor can lose the exemption for the whole raise, so sponsors turn people away. That's not personal. It's the rule.
Could you become accredited?
Possibly. Check the tests in accredited investor definition. A person who earns above the income threshold for two years, or whose net worth, excluding a primary home, crosses $1 million, may qualify. Licensed professionals may qualify through their licenses. Don't stretch your numbers to qualify. Verification asks for documents.
What to do if you aren't accredited
Start small, read everything and come back when you qualify.
- Start with a platform fund or REIT with a small amount to learn.
- Read offering documents even for small checks.
- Build a track record of your own with learning, small investments and savings.
- Come back to syndications when you qualify and understand them.
Who this isn't for
Platform funds and crowdfunding aren't safer just because they accept small checks. Fees, liquidity limits and risks still apply, so read the documents.
How DoorRaise helps
DoorRaise deals are raised under Rule 506(c), so every investor is accredited and verified. If you aren't accredited yet, you can still read deal pages and our guides to learn what to look for.
DoorRaise is for apartment buildings with 5 or more units. See how investing works or see pricing.
Related guides
These guides cover the next questions most readers have.
- How Much Money Do You Need to Invest in an Apartment Syndication?
- How to Vet a Real Estate Syndication Before You Invest
- 20 Questions to Ask an Apartment Sponsor Before You Invest
FAQ
Can I invest if I don't meet the income or net worth tests?
Not in a 506(c) deal. Other routes may be open, depending on the offering.
Does my spouse's income count?
Joint income over $300,000 can count, along with the other rules for spouses and partners. Check the definition.
Can I self-certify that I'm accredited?
Not in a 506(c) deal. The sponsor must take reasonable steps to verify.
Is it OK to start with a REIT or platform fund?
Many beginners do. Read the documents and understand the fees and liquidity first.
Sources
- SEC, amendments to the accredited investor definition
- SEC, Rule 506(c)
- 17 CFR 230.502
- 17 CFR 227.100 (Regulation Crowdfunding limits)
- 17 CFR 230.251 (Regulation A)
- Investor.gov, Regulation Crowdfunding investor limits
This post is general information, not legal, tax or investment advice. Private real estate investments are illiquid and risky, and you can lose all of your money. DoorRaise is not a broker-dealer, investment adviser or funding portal.