Accredited vs Non-Accredited Real Estate Crowdfunding Options

What Defines an Accredited Investor?

The SEC defines an accredited investor as someone who meets at least one of the following criteria: individual income exceeding $200,000 (or $300,000 joint with a spouse) for each of the prior two years with a reasonable expectation of the same, or a net worth exceeding $1,000,000 excluding the value of a primary residence. Holders of certain professional certifications (Series 7, Series 65, or Series 82 licenses) also qualify regardless of income or net worth.

This distinction matters because most individual crowdfunding deals on platforms like CrowdStreet, EquityMultiple, and RealtyMogul's private placements are offered under Regulation D, Rule 506(c), which restricts participation to accredited investors. These offerings typically require third-party verification of your status, meaning you will need to submit tax returns, bank statements, or a letter from a CPA, attorney, or broker-dealer.

Platforms Available to Non-Accredited Investors

Non-accredited investors have meaningful options, though the selection is narrower. Fundrise is the most well-known platform open to all investors, with a $10 minimum and a diversified eREIT/eFund structure. Fundrise reported an average annualized return of approximately 5.4% to 22.99% depending on the year, with 2021 being a standout year and more recent periods reflecting broader market conditions.

Other platforms accessible to non-accredited investors include Groundfloor (minimum $10, focused on short-term residential debt), DiversyFund (minimum $500, focused on multifamily value-add), and Arrived Homes (minimum $100, fractional single-family rental shares). These platforms typically operate under Regulation A+ (Tier 2), which allows offerings up to $75 million annually to anyone, or Regulation Crowdfunding (Reg CF), which caps raises at $5 million per year.

Non-accredited investors face investment limits under Reg CF. If both your annual income and net worth are below $124,000, you can invest the greater of $2,500 or 5% of the lesser of those two figures. If both exceed $124,000, you can invest up to 10% of the lesser amount, capped at $124,000 annually across all Reg CF offerings.

What You Give Up Without Accredited Status

The most significant difference is deal selection. Accredited investors can access individual property deals on CrowdStreet (minimum $25,000), EquityMultiple ($5,000 minimum), or RealtyMogul's private placements ($15,000 to $35,000 minimums). These individual deals allow you to evaluate specific properties, sponsors, and markets rather than investing in a blind pool or diversified fund.

Accredited platforms also tend to offer more varied deal structures, including preferred equity, mezzanine debt, and direct equity co-investments. The projected returns on individual deals often range from 12% to 20%+ IRR, compared to the 5% to 12% range typical of diversified funds available to non-accredited investors.

However, individual deal access is a double-edged sword. Selecting individual deals requires significant due diligence skill, and a single bad investment can cause substantial losses. The diversified fund structures available to non-accredited investors provide built-in risk reduction through broad exposure.

Practical Considerations for Each Group

If you are non-accredited and want to begin investing, start with a platform like Fundrise or Arrived Homes. These platforms handle property selection, management, and diversification for you. Expect to commit your capital for 3 to 7 years, and start with an amount you will not need during that period.

If you are accredited, you gain flexibility but also responsibility. Evaluate whether you prefer the convenience of managed funds (available on most platforms regardless of status) or the control of picking individual deals. Many experienced accredited investors split their allocation: 50% to 60% in diversified funds for stable baseline exposure, and 40% to 50% in hand-picked individual deals where they have high conviction.

For a complete introduction to real estate crowdfunding, see What Is Real Estate Crowdfunding?.