When it comes to investing, access to investment opportunities is not a uniform experience. There are a variety of investments that require investors to be “accredited investors.” This is due to the U.S. Securities and Exchange Commission (SEC)’s restrictions.
Some of the investment options that many investors may find enticing, such as private real estate funds or real estate crowdfunding platforms, typically require investors to be validated as accredited. But what does this mean, and how do you qualify?
In this article, we’ll explain how to become an accredited investor and why you may want to consider investing in real estate with one of Canyon View Capital’s passive real estate funds.
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How to Become an Accredited Investor
Accredited investors can explore many investment opportunities not available to the general public. If you’re wondering how to become an accredited investor, this guide will help.
To become an accredited investor, individuals or entities must meet specific criteria outlined by the SEC1. These requirements are meant to ensure that the people who meet them can handle the risks involved in making specific types of investments and have a particular degree of financial literacy.
Accredited Investor Requirements | ||
Becoming an accredited investor can be hugely beneficial as it can help investors avoid many restrictions on who can invest in specific investment opportunities. In addition, accredited investors can expect to enjoy privileges such as access to:
- Private Investment Offerings
- Greater Investment Diversification
- Higher Risk-Return Opportunities
- Participation in Hedge Funds and Private Equity
- Participation in Venture Capital Deals
- Opportunities in Real Estate Syndications
- Sophisticated Investment Strategies
It’s important to understand that while being an accredited investor provides access to many unique investment opportunities, many of those opportunities also come with increased responsibility and require greater investor diligence. Moreover, all investments carry some risk, and these opportunities are no different.
Verification Process
A formal procedure does not currently exist to become an accredited investor2. An investor’s accreditation status is not subject to scrutiny by any independent group or government agency, and there is no official document designating an investor as accredited. Instead, utilizing the previously listed criteria, businesses will perform diligence to ascertain a possible investor’s standing prior to entering into a partnership.
Additionally, sellers will typically require one or more of the following from investors to assist in determining whether or not they qualify as accredited investors:
- Filling out a detailed questionnaire
- Verify financial data from tax returns, financial statements, and other sources to ascertain if the income or net worth requirements are satisfied
- A credit review to verify net worth and determine if there are any unreported liabilities
- A letter of attestation from a financial counselor, tax attorney, or certified public accountant (CPA)
It’s worth noting that in 2023, the House of Representatives passed legislation directing the SEC to create an exam program that would certify investors as accredited, making the designation obtainable for those who cannot meet or easily prove the financial hurdles.
Being an Accredited Investor Doesn’t Have to Be Complicated
While being an accredited investor comes with many higher-risk investment opportunities and increased responsibilities, this doesn’t have to be the case. Many options are available to investors that target stable, risk-averse income.
Canyon View Capital was founded with this in mind, and we provide real estate investment opportunities for accredited investors designed to take the headaches out of investing and lift the burden of property management for real estate investors.
Enjoy the Benefits of Being an Accredited Investor with Canyon View Capital
Now that you know how to become an accredited investor, I’m sure you will want to explore various options available to those with this designation.
At Canyon View Capital, we’re real estate people. We eat, breathe, and sleep multifamily real estate, which led us to manage an extensive portfolio of multifamily properties through America’s Heartland in the Midsouth and Midwest.
Utilizing various investment options, we aim to provide accredited investors, such as yourself, the opportunity to reap the rewards of multifamily real estate investments, such as passive income and tax benefits, without the burdens of dealing with property management or the intricacies of day-to-day asset management. All it takes is reaching out to see if you qualify.
Ready to upgrade your portfolio with diversified, stable investments?
1$1B figure is based on aggregate values of all CVC-managed real estate investments as of March 31, 2023
2Rebecca Baldridge, Benjamin Curry, “House Passes Bill to Set up SEC Accredited Investor Exam,” for Thompson Reuters, June 2, 2023, tax.thompsonreuters.com, Accessed Jan. 6, 2024.
3Bill Flook, “How To Become An Accredited Investor,” for Forbes, March 5, 2022, forbes.com, Accessed Jan. 6, 2024.
3$1B figure is based on aggregate values of all CVC-managed real estate investments as of March 31, 2023.
Eric Fisher, Chief of Staff
Eric joined Canyon View Capital in August 2021 with 15 years of hotel management experience grounded evenly between Property & Corporate Operations, and Business Development & Acquisitions. After $500M+ in hotel acquisitions, Eric uses his nuanced understanding of the acquisitions and transitions processes to support CVC real estate investments. His professional versatility makes Eric an invaluable resource for the President and Executive Team in all business functions, including Investments, Operations, and Strategy.
