How can I invest without being an accredited investor?

Question

I have $10,000 sitting in the bank. I listed to several of the podcasts and the company sharestates kept being advertised with a minimum of $5000 to invest. I looked into their website and it states I need to be an accredited investor. I'm currently in the military and don't make the money nor have the assets they require to be accredited. Are there any recommendations besides having my money sit in the bank? Thanks!

Stuart Grazier · Answer

@Billy Guthrie Like David said, if you haven't used your VA home loan to buy a personal residence, that should be step 1. Depending on your location, you could possibly buy up to a 4 unit property. This will require very little of your own money since the VA loan is a zero down payment loan. The house-hacking strategy is to buy a property and rent out the other rooms and/or other units if you buy a 2-4 unit property. This allows for your renters to basically pay your mortgage for you and you live for free, or even make positive cash flow.

As far as trying to invest in syndications, you'll have to start networking more and find those that are looking for nonaccredited investors for their deals. They are out there, you just have to network and connect with them first; the SEC requires that you have a pre-existing relationship when you are investing into a syndication as a nonaccredited investor.

Another place that I actually store some of my money to keep it working for me is the American Homeowner Preservation Servicing Fund (google it). They offer very good returns with a minimal investment and you do not have to be accredited. This can be a good place to invest while you continue to store up more cash.

Hope that helps. Good luck!

Theo Hicks · Answer

You can invest in a 506(b) syndication if you are not an accredited investor. However, they will likely have a minimum investment amount that is greater than $10k. Other options are crowdfunding or REITs.

Adekunle Ilori · Answer

Hello Billy, Thanks for your service. Yes it is possible but you have to do your due diligence. I have seen Grant Cardone doing one for non accredited investors please check his site. Have you thing about partnering with an investor to do a deal? There is a lot of information by Brandon Tunner and David Green on investing in REI

Trevor Ewen · Answer

@Billy Guthrie

There are plenty of syndicators that will work with non-accredited or 'sophisticated' investors as mentioned by @Theo Hicks.

The minimums are likely to stop you up. $50,000 is very common in my experience. The VA loan option mentioned here may be a smart bet. I would keep the money warm and work on some of your saving plans to figure out when you'd be ready to launch on a syndication in the $50k range. Until then, as @Stuart Grazier mentioned, meet with investors and syndication sponsors. That will give you the necessary legal (and opportunistic) access when the time is right.

Michal Kolenda · Answer

The VA loan worked out well for me, and the funding fee is well worth it to buy a MFR with low money down.

On a side note/question, is investor accreditation income (200k/yearly) include gross or net rental income? Haven't found clarification on this.

Andrew Hogan · Answer

I believe that Grant Cardone's minimum investment is 5k. If you want to start out with better returns than the stock market, that could be an option. Or keep earning and saving until you have at least 50k.

Jonathan Nixon · Answer

@Billy Guthrie I personally don’t like the numbers nor the risk to p2p sites like Fundrise/LC/etc. That is one option.

Another is to get you a brokerage account set up and pick a few REITs or RE funds to throw some money into. Stay diverse in asset type.

Finally, as one of the above posters mentioned... I’m assuming you want exposure to Real Estate in some form. Try looking for a property that your money can serve as a down payment that will produce some cashflow. VA loan can be really beneficial for you.

Best of luck!

David Pere · Answer

@Billy Guthrie There are lots of other opportunities. You could buy/hold real estate in an affordable market. House hack a 2-4 unit home with a VA loan or FHA loan (0-3.5% down payment) You could partner with local investors. You could wholesale real estate. You could find a fund that allowed sophisticated investors...but you need to able to prove that you're sophisticated (I.E. an experienced investor)

How can I invest without being an accredited investor?

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