Many investors mistakenly believe that they can only invest in syndications if they are accredited. The fact is that many investors have the knowledge to make sound investing decisions, but simply do not currently meet the requirements to be an accredited investor. These individuals are commonly known as sophisticated investors and today we will discuss how they are able to invest in multifamily syndications.
The Securities and Exchange Commission (SEC) governs the laws surrounding syndication. Specifically, they allow two types of offerings under regulation D. These offering types are 506c and 506b. When doing a syndication under 506c, the sponsor is allowed to advertise their project publicly but can only accept investors who are accredited. Many non-accredited investors see these offerings and begin to think that most if not all investment offerings are 506c available only to accredited investors.
However, there are in fact many syndicators who provide 506b offerings to non-accredited investors it's just that they are not able to advertise their offerings publicly as would a syndicator with a 506c offering. This means that for non-accredited investors who want to start investing in real estate syndications it is imperative that they develop relationships with deal sponsors. First, so that they can be aware of the 506b offerings that are available and second so they can establish a relationship with the deal sponsor as is required by the SEC for 506b offerings.
If you are a non-accredited investor who is interested in investing in multifamily syndications, I encourage you to reach out to us. We can start the process of establishing a relationship so you can have access to future deals and you can learn more about our company's previous offerings and track record.
There are many important considerations when evaluating a multifamily deal and we make it our mission to careful vet each of these items. If you would like to learn more about passively investing in multifamily, please check out our free ebook "Achieving Financial Freedom Through Multifamily Investing."