Regulation A+ for Real Estate: When Does It Make Sense?
Regulation A+ lets an issuer sell securities to the public, including investors who are not accredited, up to $20 million in 12 months under Tier 1 or $75 million under Tier 2. In exchange, the issuer files an offering statement on Form 1-A that the SEC must qualify before any sale, and Tier 2 adds audited financial statements and ongoing reports. It tends to make sense for a multi-property program that raises from many investors over time, and rarely for a single apartment building raised from friends and followers, where Rule 506 is faster and simpler.
This guide compares the two tiers, walks through the process and sets Regulation A beside Rule 506 for an apartment deal. Rules are as of October 2026.
What is Regulation A+?
Regulation A is an exemption for small public offerings. The JOBS Act expanded it in 2015 into two tiers, which is why people call it "Regulation A+". The SEC's Regulation A page describes it as "an exemption from registration for public offerings," and its guidance for issuers explains the details.
Unlike Rule 506, it is designed for sales to the general public. That is its main draw for real estate: friends and followers who are not accredited can invest.
How do Tier 1 and Tier 2 compare?
| Topic | Tier 1 | Tier 2 |
|---|---|---|
| Maximum in 12 months | $20 million | $75 million |
| Of which by selling holders who are affiliates | Up to $6 million | Up to $22.5 million |
| State registration | Required in each state where you sell | Not required; states keep antifraud power and may charge fees |
| Financial statements | Two years; audit not required unless already prepared | Two years, audited |
| Non-accredited investor limit | None under the federal rule | 10% of the greater of income or net worth, unless the securities will be listed on an exchange |
| Ongoing reports | Exit report on Form 1-Z | Form 1-K yearly, Form 1-SA semiannual, Form 1-U current reports |
The limits come from Rule 251. An issuer raising $20 million or less can choose either tier.
How does the Regulation A process work?
- Prepare Form 1-A. Part I is a notice form. Part II is the offering circular with financial statements under Part F/S. A real estate issuer may follow the Form S-11 format in some cases. Part III holds the exhibits, including the subscription agreement and any escrow agreement.
- Submit it. First-time issuers may submit a draft for nonpublic review.
- SEC review. Staff comment and you respond. No sales until the SEC issues a notice of qualification.
- Test the waters if you want. Rule 255 allows solicitation of interest before or after filing, with required legends.
- Sell, then report. Tier 2 issuers file Form 1-K within 120 days of fiscal year end, Form 1-SA within 90 days after the first half, and Form 1-U within four business days of certain events.
Who cannot use Regulation A?
The SEC's guidance lists issuers that are not eligible, including companies registered or required to register under the Investment Company Act, blank-check companies with no specific business plan, issuers that missed required Regulation A or Exchange Act reports in the last two years, and issuers with a bad actor disqualification under Rule 262. The issuer must also be organized in, with its principal place of business in, the United States or Canada.
A real estate vehicle that holds properties directly is usually not an investment company, but a vehicle that buys interests in other deals may raise that question. See the Investment Company Act and syndications.
How does Regulation A compare with Rule 506 for one apartment building?
| Topic | Rule 506(b) | Rule 506(c) | Reg A Tier 2 |
|---|---|---|---|
| SEC review before sales | None | None | Yes, qualification |
| Public advertising | No | Yes | Yes |
| Who can invest | Accredited, plus up to 35 sophisticated non-accredited | Verified accredited only | Anyone, with a 10% limit for non-accredited investors |
| State registration | Preempted; notice filings | Preempted; notice filings | Preempted; possible fees and filings |
| Audited financials | Only if non-accredited buyers and over $20 million | No | Yes |
| Ongoing SEC reports | No | No | Yes |
| Size limit | None | None | $75 million in 12 months |
A purchase contract gives you a closing date. Rule 506 has no SEC review step, so the raise can start as soon as documents are ready. Regulation A cannot sell until qualification, and an audit of a newly formed property company adds work before you even file. For one building, that mismatch is usually decisive.
When does Regulation A make sense for real estate?
- A program, not a deal. A company that will buy several properties and raise from the public repeatedly can spread the setup and reporting work across raises.
- Many smaller checks. If most of your interested investors are not accredited, Regulation A is one of the few routes that can include them in a public offering.
- A long runway. You have time for SEC review and audits before you need the money.
It makes less sense for a first-time sponsor buying one building on a set timeline. For investors who are not accredited, see investing in apartments without being accredited and real estate crowdfunding vs syndication.
How DoorRaise fits in
DoorRaise helps sponsors raise equity for apartment buildings with 5+ units from their friends and followers under Rule 506(b) or 506(c), not Regulation A. It prepares the standard offering documents, forms the LLC, files Form D and state notices, and verifies accredited investors for 506(c) deals. Escrow is at Enterprise Bank & Trust, an FDIC-insured bank, and investors fund by wire only. Fees are $1,500 at setup (non-refundable), $5,000 at closing (only if the deal closes) and $3,500 a year, with no percentage of the raise and no part of the promote. DoorRaise is not a law firm, broker-dealer, investment adviser, funding portal or bank.
Raise your apartment deal from the people who already follow you.
DoorRaise is built for apartment buildings with 5 or more units: one link for the deal, escrow until closing and a standard fee card.
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FAQ
Can investors who are not accredited invest in a Tier 2 offering?
Yes, generally up to 10% of the greater of their annual income or net worth (for a person), unless the securities will be listed on a national securities exchange. The issuer may rely on the investor's representation unless it knows the representation is untrue.
Does Tier 1 need audited financial statements?
Not unless the issuer has already prepared audited statements for another purpose. Tier 1 still needs financial statements under Part F/S of Form 1-A.
Do state securities laws apply to Regulation A?
Tier 1 offerings must be registered or qualified in each state where they are sold. Tier 2 offerings are not, but states keep their antifraud power and may require fees and copies of filings.
Can I test the waters under Regulation A?
Yes. Rule 255 allows solicitation of interest before or after filing the offering statement, with required legends. Before you pick any exemption, see testing the waters under Rule 241.
Next step: read what Regulation D is to see the route most single-property sponsors use.
Sources
- 17 CFR 230.251, scope of exemption
- SEC: Regulation A
- SEC: Regulation A, guidance for issuers
- 17 CFR 230.506
- 17 CFR 230.502
This article is general information, not legal, tax or investment advice. Talk to a securities attorney about your deal. DoorRaise is not a law firm, broker-dealer, investment adviser or funding portal.