Becoming an Accredited Investor | CrowdStreet

Written by Shawna Wright-Smith | Oct 28, 2019 2:05:11 PM

The SEC governs the rules for buying and selling securities including when and how securities or offerings must be registered with the SEC and what types of investors can participate in a particular offering. As an online commercial real estate investing marketplace, all of our investment opportunities are available only to accredited investors. While the terminology can be confusing, it’s important to note that “accredited investor” is a definition, not a process.

The SEC has a set of financial criteria for investors to satisfy the definition of “accredited investor” and access certain types of securities offerings only available to accredited investors. These criteria establish certain thresholds of wealth, verifiable either through salary or personal holdings. These thresholds are intended to protect those who may not possess enough capital, investing experience, and/or knowledge and keep them from taking on undue risk in private securities.

These rules and thresholds exist for a reason–they help protect investors.

How Do I Know If I Am An Accredited Investor?

Put simply, you’re an accredited investor if:

You earned more than $200,000 in each of the last two years (or more than $300,000 together with your spouse in each of those years) and reasonably expect the same for this year.

You have a net worth over $1 million, either alone or together with your spouse, excluding the value of your primary residence.

OR

You are a holder in good standing of the Series 7, Series 65, or Series 82 licenses

An accredited investor doesn’t have to be an individual person; trusts, certain retirement accounts, and LLCs may also qualify for accredited investor status. Each investing capacity may have slightly different criteria to be considered accredited, and this flowchart outlines the accreditation standards for all entity types.

If you qualify as an accredited investor, you’ll need to verify your accreditation status in order to be eligible to invest in the commercial real estate offerings on the CrowdStreet Marketplace.

How Do I Verify My Accreditation?

Within the 'accreditation verification’ tab of your Investing Account, you will be provided the following options

CrowdStreet Investor Relations can review your accreditation status directly.

Upload financials and documentation to show proof of your accredited status based on the requirements summarized above.

You can provide a letter from your own licensed CPA, licensed attorney, or registered wealth advisor attesting to your status as an accredited investor. The uploaded letter must:

Be signed and dated by a qualified third-party; AND
Explicitly state the providers qualifications (ex, “I am a registered CPA in the State of [ ], license #”); AND

explicitly state that the investor/entity is an accredited investor (as defined by Rule 501a).

If a template is helpful, please find one here:

Investor Verification Letter Template. Please note that third-party letters are only valid for 90 days from date of issuance.
Per SEC Rule 230.506(c)(2)(C), before accepting an investor into an offering, sponsors must obtain written proof of an investor’s accreditation status from a qualified third-party. If a third-party letter is provided, this will be passed to the sponsor directly and must be dated within the past 90 days.

As a qualified party, CrowdStreet can maintain your financial documents for one year and use those to continuously confirm your accredited status every 90 days to sponsors. After a year, we will need updated financial documents for review.

For more information on accredited investing, visit our Accreditation Overview articles in our Help Center.

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