An accredited investor is an individual or entity that meets specific income, net worth, or professional criteria established by securities regulators, qualifying them to invest in private offerings that are not registered with the SEC, including most real estate syndications and private funds. The underlying premise is that accredited investors are financially sophisticated or resilient enough to evaluate and absorb the risks of investments that carry fewer disclosure requirements than public securities.
Qualification typically runs through one of a few paths, including exceeding certain income levels in recent years, meeting a net worth threshold excluding primary residence, or holding specific professional licenses or credentials tied to financial expertise. Because these thresholds and qualifying criteria are set by regulation and have been adjusted over time, investors should confirm current standards with a sponsor or their advisor rather than rely on a remembered figure. Most private real estate offerings restrict participation to accredited investors specifically to comply with the exemptions under which those offerings are sold.
Further reading: The Bonus Depreciation Whiplash: 40% to 100% and the OBBBA
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