Tap to get financing
Commercial Real Estate Loans
Loan Options
Permanent FinancingLoans Under $1MBridge LoansMezzanine FinancingConstruction LoansUSDA 538 Loan ProgramLife Company LoansSBA 7(a) LoansSBA 504 Loan ProgramFannie Mae LoansFreddie Mac LoansCMBS LoansHUD Multifamily LoansFix and Flip LoansHUD 223(f) LoansHUD 221(d)(4) LoansHUD 223(a)(7) LoansHUD 241(a) LoansHUD 232 LoansHUD 232/223(f) LoansHUD 232 LEAN LoansHUD 232/223(a)(7) Loans
Property Types
All Property TypesRetailOfficeIndustrialApartmentsSelf StorageHotelLandChurchSchoolAuto DealershipAuto Repair ShopCar WashGas StationHealthcareMedical OfficeDental OfficeVeterinaryFitness CenterBowling AlleyConvenience StoreDay Care CenterGolf CourseAnchored Strip CenterRestaurantMarinaWarehouseFuneral Home
Resources
BlogCurrent Mortgage RatesForms and TemplatesCommercial Property for SaleCommercial MLS GuideGlossaryVideo LibraryApply OnlineHow to Get a CRE LoanFrequently Asked Questions
Calculators
Commercial Mortgage CalculatorCap Rate CalculatorNOI CalculatorDSCR CalculatorLTV CalculatorLTC CalculatorDebt Yield CalculatorYield Maintenance CalculatorInternal Rate of Return Calculator
About Us
About UsLeadershipTeamContactWe're Hiring
Get financing
Newly Published
Mar 17 at Commercial Real Estate Loans
Top 10 Commercial Real Estate Lenders of 2023
Mar 15 at Commercial Real Estate Loans
Top 4 Refinancing Loans for Industrial Real Estate in 2023
Feb 20 at Commercial Real Estate Loans
How to Set Rent Rates for Your Commercial Property in 2023
Explore the Janover Network
Mar 20 at Multifamily Loans
Multifamily Minute Reader Reflections: How Will Bank Failures Impact Multifamily?
Mar 14 at Multifamily Loans
Multifamily Minute Reader Reflections: How Big Are We Buying?
Feb 27 at Multifamily Loans
Multifamily Minute Reader Reflections: When Do You Start the Refi Process?
Was This Article Helpful?
Commercial Real Estate Glossary
Last updated on Feb 19, 2023
3 min read

Accredited Investors in Commercial Real Estate

When a commercial real estate investment is solicited to investors, they must typically be accredited investors. According to the Securities and Exchange Commission (SEC), accredited investors have an annual income of at least $200,000 (or $300,000 if married) and a net worth of at least $1 million. This does not include the value of the investor’s primary residence.

Better Financing Starts with More Options Start Your Application and Unlock the Power of Choice. Click Here to Get Quotes →$1.2M offered by a Bank at 6.0%$2M offered by an Agency at 5.6%$1M offered by a Credit Union at 5.1%Click Here to Get Quotes
In this article:
  1. Accredited Investors and Commercial Property Investing
  2. Why Do Most Commercial Real Estate Investors Need to be Accredited?
  3. What are Examples of Accredited Investments?
  4. Can Non-Accredited Investors Place Funds in Accredited Investments?
  5. How Does the JOBS Act and Crowdfunding Affect Investor Accreditation Requirements?
  6. Questions? Fill out the form below to speak with a commercial real estate loan specialist.
  7. Related Questions
  8. Get Financing

Accredited Investors and Commercial Property Investing

When a commercial real estate investment is solicited to investors, they must typically be accredited investors. According to the Securities and Exchange Commission (SEC), to qualify as an accredited investor, an individual must have an annual income of at least $200,000 (or $300,000 for married couples) and a net worth of at least $1 million (for both individuals and married couples). This does not include the value of the investor’s primary residence.

Why Do Most Commercial Real Estate Investors Need to be Accredited?

After the passage of the Securities Act of 1933, all financial securities offerings were required to register with the SEC. This can be a long and time consuming process, especially for commercial real estate deals, which may need to gather investors under a tight deadline. However, there are a few exceptions; if the deal is done privately, and is only offered to accredited investors (those meeting the criteria mentioned above), the offering will not need to register. The purpose of these regulations is to prevent inexperienced investors from being taken advantage of and placing their money in investments that they may not fully understand.

What are Examples of Accredited Investments?

In addition to commercial real estate and commercial real estate syndications, other types of common accredited investments include private equity and hedge funds, oil and gas investments, limited partnerships, and the stock of privately held firms.

Can Non-Accredited Investors Place Funds in Accredited Investments?

In some cases, non-accredited investors can invest in accredited investments, albeit with certain stipulations. In addition to providing a “safe harbor” for investments that are not publicly offered, Regulation D of the Securities Act of 1933 states that an investment offering will not have to register with the SEC, as long as it sells investments to 35 or fewer non-accredited investors.

How Does the JOBS Act and Crowdfunding Affect Investor Accreditation Requirements?

The JOBS Act of 2012 permits crowdfunding for equity investments, including commercial and multifamily real estate offerings. This means that real estate investments can be offered to the public and solicited to non-accredited investors. However, there are still some limits; individuals earning, or worth, up to $100,000 can invest $2,000 or 5% of their income (whichever is greater), and individuals earning, or worth, more than $100,000 can invest $10,000 or 10% of their income (whichever is less). This has led to a variety of online real estate crowdfunding platforms, including Fundrise, EquityMultiple, Realty Mogul, and others.

Questions? Fill out the form below to speak with a commercial real estate loan specialist.

Related Questions

What is an accredited investor in commercial real estate?

An accredited investor in commercial real estate is an individual who has an annual income of at least $200,000 (or $300,000 for married couples) and a net worth of at least $1 million (for both individuals and married couples). This does not include the value of the investor’s primary residence. Accredited investors are exempt from certain securities regulations, such as the requirement to register with the Securities and Exchange Commission (SEC). This is to protect inexperienced investors from being taken advantage of and placing their money in investments that they may not fully understand.

What are the requirements to become an accredited investor in commercial real estate?

According to the Securities and Exchange Commission (SEC), to qualify as an accredited investor, an individual must have an annual income of at least $200,000 (or $300,000 for married couples) and a net worth of at least $1 million (for both individuals and married couples). This does not include the value of the investor’s primary residence.

Source

What are the benefits of being an accredited investor in commercial real estate?

The main benefit of being an accredited investor in commercial real estate is that it allows investors to access private offerings that are not registered with the SEC. This can be beneficial for investors because it allows them to invest in deals that may not be available to the general public. Additionally, accredited investors may be able to access more favorable terms on loans, such as lower interest rates and longer repayment periods.

Source: www.commercialrealestate.loans/commercial-real-estate-glossary/accredited-investors

What types of investments are available to accredited investors in commercial real estate?

Accredited investors in commercial real estate can invest in commercial real estate and commercial real estate syndications, private equity and hedge funds, oil and gas investments, limited partnerships, and the stock of privately held firms.

According to the Securities and Exchange Commission (SEC), to qualify as an accredited investor, an individual must have an annual income of at least $200,000 (or $300,000 for married couples) and a net worth of at least $1 million (for both individuals and married couples). This does not include the value of the investor’s primary residence.

What are the risks associated with investing in commercial real estate as an accredited investor?

The risks associated with investing in commercial real estate as an accredited investor are similar to those of any other type of investment. These include market risk, liquidity risk, and the risk of not being able to sell the property when needed. Additionally, there is the risk of not being able to find tenants for the property, or of tenants not paying rent. There is also the risk of not being able to get financing for the property, or of not being able to refinance the loan when needed. Finally, there is the risk of not being able to manage the property effectively, or of not being able to keep up with maintenance and repairs.

For more information, please see Investopedia's article on the risks of investing in commercial real estate.

In this article:
  1. Accredited Investors and Commercial Property Investing
  2. Why Do Most Commercial Real Estate Investors Need to be Accredited?
  3. What are Examples of Accredited Investments?
  4. Can Non-Accredited Investors Place Funds in Accredited Investments?
  5. How Does the JOBS Act and Crowdfunding Affect Investor Accreditation Requirements?
  6. Questions? Fill out the form below to speak with a commercial real estate loan specialist.
  7. Related questions
  8. Get Financing
Categories
  • Commercial Real Estate
  • Commercial Development
Tags
  • Accredited Investors
  • Non-Accredited Investors
  • Accredited Investors Real Estate
  • Real Estate Crowdfunding
  • EquityMultiple

Getting commercial property financing should be easy.⁠ Now it is.

Click below for a free, no obligation quote and to learn more about your loan options.

Get financing →
Janover logo

Commercial Real Estate Loans is a Janover company. Please visit some of our family of sites at: Multifamily Loans, Multifamily Today, Commercial Real Estate Loans, SBA7a Loans, CMBS Loans, Apartment Loans, HUD Loans, HUD 221d4 Loan, HUD 232 Loan, HUD 223f Loan, HUD 223a7 Loan, SBA Express Loans, SBA 504 Loans, and OpportunityZones Help.

Janover Inc.

6401 Congress Ave
Ste 250
Boca Raton FL 33487

hello@commercialrealestate.loans

Commercial Real Estate Loans

Eligible Property Types
Mortgage Rates
Commercial Loan Calculator
Glossary

Site Information

Privacy Policy
Terms of Use

This website is owned by a private company that offers business advice, information and other services related to multifamily, commercial real estate, and business financing. We have no affiliation with any government agency and are not a lender. We are a technology company that uses software and experience to bring lenders and borrowers together. By using this website, you agree to our use of cookies, our Terms of Use and our Privacy Policy. We use cookies to provide you with a great experience and to help our website run effectively.

Freddie Mac® and Optigo® are registered trademarks of Freddie Mac. Fannie Mae® is a registered trademark of Fannie Mae. We are not affiliated with the Department of Housing and Urban Development (HUD), Federal Housing Administration (FHA), Freddie Mac or Fannie Mae.

Copyright © 2022 Janover Inc. All rights reserved.