4 Strategies for Investing As a Non-Accredited Investor

Are you a non-accredited investor? Are you trying to find a reliable, safe and lucrative investment to place your capital for mid- to long-term wealth generation?  

In your experience, does it feel as though non-accredited investors are being penalized or disregarded?  

I’ve had so many conversations recently with investors frustrated by forced changes to their investment strategies. You build rapport, build trust and finally invest with a fund. Then some time later… months or even years… you get that call telling you the fund managers are shifting their strategies, and they will be returning your capital because the fund is no longer providing placement for non-accredited capital.  

WHAT? But you have been an investor with the fund for so long! Where is the loyalty? Whatever happened to the old adage “What’s good for the client is good for us”? You receive your wire, but with little or no offer to assist you in finding a new home for your capital.  

So why are Funds and REITs turning away capital from sophisticated, educated, and experienced investors?  

Here’s why… 

The JOBS Act of 2012 created lots of opportunity for syndication and it added regulations that allowed for non-accredited investors (506a and 506b). 

HOWEVER, when non-accredited investors are involved, firms are then required to provide AUDITED financial statements. This may not sound too difficult on the surface, but when you are considering a 506b offer that represents a $10 million acquisition with 20 or more investors, and adding in the complexity of funding and operations, all while maintaining transparency, the task is not an easy one. Audits of this nature can run $50-100K per year, which seriously reduces the amount of money available for returns. 

When private equity offers accept only accredited investors, they are often able to deliver a higher return with less workload on the managers of the offer. They are not constrained by the requirement to provide audited returns. 

Don’t get me wrong, oversight to protect investors is a must! But at what cost? The standards for accredited investors should be amended (how) and indeed this has been discussed in congressional committees over the last couple of years. 

So back to your investment problem: you’ve been booted from your fund, and now you are on the hunt….yet again…to find a new company to build trust and rapport so you can find a new home for your investment dollars. However, fewer and fewer companies are willing to work with non-accredited investors… 

So what is the solution? Where can you safely place your capital as a non-accredited investor?  

As a non-accredited investor, if you have cash, a self-directed 401k, a self-directed IRA, a pension plan, or one of a multitude of other investment vehicles, here are a few places you can direct your investment dollars to work for you and get the returns you are looking for: 

1. Equity Investing: Joint Venture/Partnership 
2. Debt Investing: Specific types of Note Lending 
3. Select REITs 
4. Select Funds 

Don’t lose hope…You are not alone!  

And more IMPORTANTLY, you are not out of luck. There are plenty of opportunities to invest directly, indirectly, and passively into real estate that provide great opportunity with low risk. These investments are very appropriate for sophisticated investors who want passive income and growth.  

Contact Grande AMA and Associates at investorrelations@amagrande.com today to see if we can assist you in identifying the right place for your investment. Visit our website at https://amagrande.com or give me a call directly at (480) 542-7772. 

I look forward to assisting you with any questions you have regarding non-accredited and/or accredited investments for your portfolio. 

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