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. 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. OR You have a net worth over $1 million, either alone or together with your spouse, excluding the value of your primary residence.How Do I Know If I Am An Accredited Investor?
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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?
We have made the accreditation verification process as easy as possible by offering several options.
Get a letter signed by your CPA, attorney, or wealth advisor
For certain types of securities offerings, the sponsor may require you to verify your status as an accredited investor by a qualified, independent third party in order to satisfy regulatory requirements. Qualified parties under the applicable regulations include a CPA, attorney, registered investment advisor, or registered broker-dealer. If you already work with one of these parties, ask them to complete and sign this one-page template letter, and then scan and upload it to your documents in the CrowdStreet portal.
Use our online, integrated workflow through VerifyInvestor.com
Alternatively, CrowdStreet investors can prove their accreditation status via our integrated third-party partner, VerifyInvestor. If you use the VerifyInvestor integration through the CrowdStreet real estate crowdfunding platform, we are able to absorb the cost of this service on your behalf. To use VerifyInvestor, follow the link in the Transaction Center, which becomes available after submitting closing documents for a given offer.
VerifyInvestor will ask you to securely upload documentation such as W-2s, tax returns, and/or account balance statements for review by their team of attorneys. Your accreditation verification letter will be automatically imported into your CrowdStreet account, and your supporting documents are retained, either by VerifyInvestor or CrowdStreet. The turnaround time is typically one to two days.
Please note that, per SEC rules, each accreditation verification letter is only valid for 90 days. Should you make multiple investments, you will need to periodically renew your verification.
For more information on accredited investing, visit our Accreditation Overview articles in our Help Center.
As a seasoned expert in financial regulations and investment practices, I bring a wealth of knowledge to demystify the intricacies surrounding the SEC's governance of rules for buying and selling securities. My comprehensive understanding of the subject matter is rooted in practical experience and a thorough grasp of the regulatory landscape.
Let's delve into the key concepts outlined in the provided article:
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SEC Regulations and Securities Offerings: The article highlights that the Securities and Exchange Commission (SEC) plays a pivotal role in regulating the rules governing the buying and selling of securities. It emphasizes the necessity for securities or offerings to be registered with the SEC, and it outlines the criteria that dictate which types of investors can participate in specific offerings.
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Accredited Investors Defined: The term "accredited investor" is a crucial aspect of the discussion. The article clarifies that being an accredited investor is a definition rather than a procedural step. To qualify, investors must meet specific financial criteria set by the SEC, which includes thresholds of wealth based on income, net worth, or professional qualifications.
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Accreditation Criteria: The criteria for becoming an accredited investor are elucidated in the article. Investors can qualify if they earned more than $200,000 in each of the last two years (or $300,000 together with a spouse) and reasonably expect the same for the current year. Alternatively, having a net worth over $1 million, alone or with a spouse (excluding the primary residence), or holding certain licenses (Series 7, Series 65, or Series 82) also qualifies an individual.
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Entities Eligible for Accreditation: The concept that accredited investors are not limited to individuals is emphasized. Trusts, certain retirement accounts, and LLCs may also qualify for accredited investor status, with each entity type subject to slightly different criteria.
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Importance of Rules and Thresholds: The article underscores that the rules and thresholds set by the SEC are designed to protect investors by preventing those with insufficient capital, experience, or knowledge from undertaking undue risks in private securities.
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Verification Process for Accredited Investors: The article provides insight into the accreditation verification process. It outlines various methods, including obtaining a signed letter from a CPA, attorney, or wealth advisor. It also introduces an online, integrated workflow through VerifyInvestor.com, which allows investors to prove their accreditation status.
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Renewal of Accreditation Verification: To comply with SEC rules, the article mentions that each accreditation verification letter is valid for 90 days. Investors making multiple investments must periodically renew their verification.
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Cost of Accreditation Verification: The article mentions that CrowdStreet investors can use the VerifyInvestor integration at no additional cost, as the platform absorbs the expenses associated with this service.
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Additional Resources: The article directs readers to the CrowdStreet Help Center for more information on accredited investing, specifically referencing the Accreditation Overview articles.
In summary, the provided information serves as a comprehensive guide for individuals seeking to understand the SEC regulations, accreditation criteria, and the verification process for participating in commercial real estate offerings through online investment platforms.
