Table of Contents
1. How Much Money Do You Need to be an Accredited Investor
2. How to Achieve the Accredited Investor Status
3. What Investments Are Exclusive to Accredited Investors?
4. Investment Opportunity for Accredited Investors: What is Multifamily Syndication?
5. Why Invest with BAM Capital for Multifamily Real Estate Investing
6. BAM Multifamily Growth & Income Fund IV
It takes money to make money. For those who want to build their wealth, it is important to reinvest their earnings and watch their money grow over time. People who make wise investment choices tend to be more successful when it comes to wealth accumulation.
Accredited investors can make even better investment decisions because they have access to investment opportunities that others don’t. Because of their net worth, income level, and investment experience, they are allowed to participate in riskier investments.
All investments come with a level of risk. But for investments that are considered “riskier”, the US Securities and Exchange Commission (SEC) restricts access so that regular investors are financially protected.
Accredited investors have a bigger financial safety net due to their annual income and net worth, meaning they can easily bounce back even if an investment does not work out. They are also better equipped to handle the risks involved with certain securities offerings. 
Due to the benefits of having this status, a lot of people want to know how to become an accredited investor. While there is no formal accreditation process, an investor who fits the guidelines and the requirements set by the SEC is considered an accredited investor. If you fit the bill, you will be able to invest in private equity funds, hedge funds, venture capital, equity crowdfunding, real estate syndication, and other investment opportunities that are exclusive to these high net worth investors.
Because of federal securities laws, some securities and assets do not have to be registered with the SEC as long as they are sold to accredited investors. So now the question is, how much money do you need to be considered an accredited investor? Here we will be discussing the accredited investor definition as well as the accredited investor requirements. Let’s take a closer look.
How Much Money Do You Need to be an Accredited Investor
The SEC determines who can take part in these lucrative investment opportunities. The definition of accredited investor used to be much more restrictive, but this has been amended in recent years to include more people.
According to Regulation D of the Securities Act of 1933, an accredited investor must have at least $200,000 of earned income over the past two years, with a reasonable expectation that they will earn the same amount in the present year. For a married couple, they need to have a joint income of $300,000. 
A net worth calculation can also be used to determine accredited investor status. A person with a net worth that exceeds $1,000,000 also falls under the category of accredited investor. It is important to consider that the net worth calculation excludes the value of a person’s primary residence.
The SEC expanded and modernized its definition of accredited investor in August 2020, allowing more people to qualify as accredited investors. Income and net worth are still part of the equation, but the SEC has also included those with certain professional certifications such as Series 7, 65, or 82 licenses. 
Limited liability companies (LLC) with $5 million in assets are now also classified as accredited investors. The new SEC definition also includes Indian tribes, government bodies, funds, and entities that are organized under the laws of foreign countries that own investments over $5 million.
Knowledgeable employees of a private fund, including general partners, directors, and board members are also classified as accredited investors. The SEC has even expanded the definition to include “spousal equivalent” for those who are not legally married.
How to Achieve the Accredited Investor Status
As was previously mentioned, there is no official accreditation process that exists to identify individuals who have reached this status. Instead, the burden of proving an investor’s qualifications falls on the investment vehicle itself. The company that issues the unregistered investments and securities will have to ask investors to provide financial statements before they can participate.
The investment vehicle is required by the SEC to take certain steps in order to verify accredited investor status. The investor will typically have to fill in a questionnaire and provide specific attachments like tax returns, W-2 forms, and financial statements.
Investors may also prove their status by submitting letters from reviews by tax attorneys, investment brokers, financial advisors, and CPAs. Once they have been confirmed as an accredited investor, they can participate in the investment.
What Investments Are Exclusive to Accredited Investors?
Most accredited investors are high net worth individuals (HNWIs). And for high net worth individuals, the goal is usually to build, protect, and grow their wealth. This is made possible by certain securities offerings that are exclusive to accredited investors.
Anyone can grow their wealth by investing in different asset classes and diversifying their investment portfolio, but accredited investors have a few more options, such as venture capital funds, private funds, and real estate syndication.
A lot of these investment strategies reward investors who have an aggressive approach to investing, particularly those who enjoy a bit more risk in exchange for greater returns.
Hedge funds are a good example of this. Hedge funds are actively managed investment pools that typically use non-traditional investment strategies or asset classes. Managers of investment funds usually set aside a portion of their available assets for a hedged bet. The goal is to offset any losses by going against the fund’s primary focus. 
A fund manager for a cyclical sector may devote a portion of the assets to stocks in a non-cyclical sector, for example. In case the economy tanks, the losses are offset. Accredited investors are able to invest in a hedge fund.
It is an alternative investing strategy that has multiple unique ways of operating. The strategy depends on the hedge fund manager. Because of the risks involved, hedge funds are slightly controversial. Some hedge fund managers even spend borrowed money and trade esoteric assets. Granted, these are only accessible to accredited investors and HNWIs. 
Accredited investors who want to try out hedge funds simply have to choose a hedge fund manager to work with based on their preferred investment approach. Most accredited investors go for hedge fund managers who have a similar investment philosophy. For example, some hedge fund managers prefer riskier strategies like using borrowed money to buy more of an asset and multiple their potential returns. This goes without saying that this also multiplies their potential losses.
Hedge fund managers do not come cheap, often charging a fee of 1% to 2% of the assets, plus 20% of the profits as their “performance fee”.
Overall, this is a good way to get your foot into the world of real estate investing without actually dealing with the responsibilities of owning a property. It is a passive investment and a great way to boost your financial portfolio.
Investment Opportunity for Accredited Investors: What is Multifamily Syndication?
If you are an accredited investor and you really want to get into real estate investing, syndication is an option for you. Aside from hedge funds and venture capitals, real estate syndication is another investment opportunity that is exclusive to those with an accredited investor status
A real estate syndication deal is when multiple investors pool their resources together to purchase a single real estate property. 
This type of deal is arranged by a syndicator, also known as the general partner, who locates the real estate property, coordinates the funding, and finds accredited investors who will participate. These investors will provide most of the capital needed to purchase the property in exchange for equity and a share of the monthly income, depending on the deal structure. 
Once the deal is in place, the investors don’t have to worry about property management because the syndicator will handle it. They will either hire a third party property management company or take care of it themselves. Either way, the accredited investors do not have to collect rent, handle emergencies, or deal with tenants. This eliminates the hassle that is typically associated with owning a real estate property.
Multifamily syndication is the most popular type of syndication deal for several reasons. It has multiple units, meaning it can generate a larger cash flow thanks to multiple tenants. The number of units also ensures a consistent stream of income because the property is unlikely to become completely vacant at any point in time. Even with one or two vacancies, the remaining units will produce income.
A high quality real estate property is also unlikely to remain vacant for a long time.
In addition to that, multifamily properties like condominiums, apartment complexes, duplexes, and triplexes are generally much more expensive compared to your usual single family home. Therefore they are harder to acquire for a lone investor.
Not to mention managing a large multifamily property on your own is difficult and costly. The property management fees alone are enough to deter plenty of traditional investors. Even HNWIs and accredited investors know that multifamily syndication is the most efficient approach. Syndication deals make multifamily properties a lot more accessible.
For accredited investors who want to try real estate investing but want a passive investment, multifamily syndication is the ideal setup. You get to enjoy all the benefits of owning real estate without having to put in any of the work you would normally have to do.
In a syndication deal, a limited liability company or limited partnership is typically established for the sole purpose of the syndication. The syndicator acts as the general partner while the investors are the limited partners.
Unlike other forms of real estate investing, syndication is not an option for everyone. Most syndication deals are exclusive to accredited investors. However, there are others that do accept sophisticated investors.
A sophisticated investor is someone with enough experience and knowledge about financial and business matters. This gives them the ability to evaluate the merits and risks involved with prospective investments even without the net worth or annual income of someone who is an accredited investor. 
There are a few syndication deals that are structured to allow sophisticated investors to participate. The SEC limits each deal to a maximum of 35 non-accredited, sophisticated investors so that most participating investors are still accredited.
Syndicators are also not allowed to advertise investments to non-accredited investors. This means sophisticated investors have to find these deals themselves using their network and connections. 
There are many ways for accredited investors to participate in exclusive investment opportunities and grow their investment portfolio. They can become equity owners, look into venture capital firms and hedge funds, or find unregistered securities. But multifamily syndication is one of the most reliable sources of passive income, and should definitely be on your priority list if you are an accredited investor.
Why Invest with BAM Capital for Multifamily Real Estate Investing
Accredited investors have several options when it comes to investment opportunities. But if you are interested in getting into real estate, multifamily syndication is the way to go.
When it comes to multifamily syndication, you need to work with the best of the best. Work with BAM Capital.
BAM Capital is an Indianapolis-based syndicator that has a strong Midwest focus. It prioritizes multifamily real estate properties that are Class A, A-, and B++. This world-class syndicator uses an award-winning investment strategy that helps accredited investors grow their wealth through multifamily syndication. 
Using a vertical integration strategy, BAM Capital creates forced appreciation and mitigates investor risk. Known for their consistent track record, BAM Capital successfully negotiates the purchasing and financing of high quality multifamily properties on behalf of passive investors. In fact, BAM Capital currently has over $700 million AUM and 5,000+ units. 
No investment is without risk. Make sure to consult your investment advisor or speak to a BAM Capital investment team member before making any financial decisions. Accredited investors can schedule a call with BAM Capital and invest today.