Generally known, a non-accredited investor is any investor who does not meet the net worth requirements for an investor under Securities and Exchange Commission (SEC). Basically, non-accredited investors are those that are not worth up to $1 million or have not made $200,000 as income for two consecutive years.
As a non-accredited investor, there are some investments that cannot be accessed, however, such investors can now invest in startups and other business in the US. There are many types of equity investment that non-accredited investors are open to, these include banks, insurance companies, employee benefits plan and trusts and so on.
Private equity investing is an investment in a company that is either privately held or taken private through a buyout and reorganized. Non-accredited investors have ways to participate in private equity like:
Investing in a startup or private company as a member of the group, or
Buying stock in a publicly traded private capital firm or by an exchange traded fund that invest in private capital firms. Firms usually rely on private placement exemption from the security registration requirements.
Real estate syndication.
Real estate involves the purchase, ownership, management, rental and sale of real estate for profit. As a non-accredited investor, there are several ways you can invest in real estate. Some of which are listed below:
Flipping a house doesn’t require you to be an accredited investor. You can buy a property, put funds into fixing it up, and then sell it for a profit. Flipping a home usually requires funds beyond the initial investment, and more time than you might have. It’s a process that requires a solid knowledge of real estate and home improvement because even some profitable flips can seem like money losers after a while but patience is crucial if you’re going to commit to house flipping.
Rent-to-own is a contract where you agree to rent out a home for a predetermined period of time with the option to purchase the home at the end of the contract. That option sometimes is a requirement, a promise that you will be buying the home. A percentage of your monthly rent payments is then deposited as the down payment on a mortgage when the purchase becomes official.
Rent-to-own contracts come with some risks, but they are perfect for people who may not want to currently commit to buying a home. This affords people with other loans and debts enough time to pay their loans off without the added financial burden of a mortgage. Rent-to-own contracts have the potential to help you ease your way into a real estate investment.
As a non-accredited investor, you can invest in rental properties. You can then rent out the apartments to tenants, manage the property optimally to keep the expenses low so that your rent can be made affordable for prospective tenants.
You can also acquire the property that you live in as an investment and rent out other rooms in the property. You then become the landlord and manager of the property. This way, you can use a more hands-on approach to keep the property in great condition.
You can also diversify into other types of real property investments like vacation properties, commercial, non-residential properties. Real estate syndication is another investment that can create passive income for non-accredited investors.