Quick Take: An accredited investor is an individual or entity that meets specific income, net worth, or professional criteria set by the federal government. Accredited investor status is required to participate in certain private investment offerings—including private real estate funds. If you meet at least one of the qualifying thresholds, you are eligible to invest in opportunities not available to the general public.
The Accredited Investor Definition
Investors in Origin must be “accredited investors.” It’s a threshold set by the federal government. Do you meet the definition of an “accredited investor?” Individuals who can answer “yes” to at least ONE of the following statements qualify as accredited investors:
- I have an individual net worth, or joint net worth with my spouse, that exceeds $1 million (excluding the value of my primary residence).
- I have individual income exceeding $200,000 in each of the past two years and expect to reach the same this year.
- I have combined income with my spouse exceeding $300,000 in each of the past two years and expect to reach the same this year.
- I invest on behalf of a business or investment company with more than $5 million in assets and/or all of the equity owners are accredited.
If you meet one or more of these thresholds, you are an accredited investor.
Why Does the Accredited Investor Designation Exist?
The accredited investor designation was established by the U.S. Securities and Exchange Commission (SEC) under Regulation D of the Securities Act of 1933. The underlying rationale is investor protection: private investment offerings—such as hedge funds, private equity, and private real estate funds—are exempt from many of the disclosure and registration requirements that apply to publicly traded securities.
Because these investments carry a higher degree of complexity and risk, and often involve limited liquidity, the SEC designed the accredited investor standard to help ensure that participants have the financial means to absorb potential losses. In short, the threshold is intended to identify investors who are both financially sophisticated and capable of evaluating—and withstanding—the risks involved.
Accredited Investor Requirements: A Full Breakdown
The SEC defines accredited investor status across several categories. While the income and net worth thresholds are the most commonly cited, the SEC’s 2020 rule expansion broadened the definition to recognize professional knowledge and expertise—not just wealth.
Individual Qualifications
| Qualification | Threshold |
|---|---|
| Individual net worth (or joint with spouse) | Exceeds $1 million, excluding primary residence |
| Individual income | $200,000+ in each of the past two years, with expectation of the same this year |
| Joint income with spouse | $300,000+ in each of the past two years, with expectation of the same this year |
| Professional certification (added 2020) | Holders of Series 7, Series 65, or Series 82 licenses in good standing |
Entity Qualifications
| Entity Type | Qualifications |
|---|---|
| Business or investment company | More than $5 million in assets, OR all equity owners are individually accredited |
| Trust | Assets exceeding $5 million, not formed specifically to acquire the securities offered |
| Registered investment advisers (RIAs) | Qualify automatically as accredited investors |
Note: The above represents the most commonly referenced qualifying categories. Additional entity types may qualify under SEC Rule 501(a). The value of your primary residence is explicitly excluded from net worth calculations. Any mortgage or debt secured by your home up to its fair market value is also excluded—but debt that exceeds the home’s value is counted as a liability. Consult your legal or financial adviser for a complete assessment of your eligibility.
What Does Being an Accredited Investor Give You Access To?
Accredited investor status unlocks a category of investments that are unavailable through traditional brokerage accounts or public markets. These include:
- Private equity and venture capital funds
- Hedge funds
- Private real estate funds and syndications
- Private credit and debt instruments
- Delaware Statutory Trusts (DSTs) and Qualified Opportunity Zone (QOZ) funds
These investment vehicles are often referred to as “alternative investments” or “private markets.” Historically, they were accessible only to large institutions—pension funds, endowments, and sovereign wealth funds. The accredited investor framework extends that access to qualifying individuals and entities.
Why Accredited Investor Status Matters for Real Estate Investors
For investors seeking income, portfolio diversification, and tax efficiency, accredited investor status is often the gateway to the most compelling opportunities in private real estate. Publicly traded REITs offer real estate exposure, but they come with stock market correlation and limited control over asset selection. Private real estate funds, by contrast, can offer:
- Potentially higher risk-adjusted returns driven by active asset management
- Tax-efficient income through depreciation and pass-through deductions
- Lower correlation to public market volatility
- Access to institutional-quality multifamily assets in high-growth markets
At Origin Investments, accredited investor status is required to participate in our private multifamily real estate funds. Origin offers a range of investment strategies—including growth-oriented funds, income-focused open-end funds, and tax-deferral vehicles such as DSTs and QOZ funds—all designed to help accredited investors grow, preserve, and efficiently manage their wealth through multifamily real estate.
How Is Accredited Investor Status Verified?
The SEC does not issue an “accredited investor certificate.” Instead, the responsibility for verification rests with the issuer of the private securities—meaning the fund or investment sponsor. Verification methods typically include:
- Review of tax returns, W-2s, or other income documentation for income-based qualification
- Review of brokerage or bank statements for net worth qualification
- Written confirmation from a licensed CPA, attorney, broker-dealer, or registered investment adviser
- Self-certification questionnaires (common in Regulation D offerings)
The verification process varies by fund and offering type. When you invest with Origin, you will complete an investor questionnaire that confirms your accredited status prior to completing any subscription.
There is a private real estate investment strategy for virtually every investor.
FAQ
What is the net worth requirement to be an accredited investor?
An individual must have a net worth exceeding $1 million, either individually or jointly with a spouse, excluding the value of their primary residence. Debt on the primary residence that exceeds its fair market value is counted as a liability in the calculation.
What is the income requirement to be an accredited investor?
An individual must have earned more than $200,000 in each of the two most recent years—or $300,000 combined with a spouse—and have a reasonable expectation of reaching the same income threshold in the current year.
Can I qualify as an accredited investor without being wealthy?
Yes. Since the SEC’s 2020 rule expansion, individuals holding certain professional certifications—specifically the Series 7, Series 65, or Series 82 licenses—qualify as accredited investors based on demonstrated financial knowledge, regardless of income or net worth.
Does my primary home count toward the $1 million net worth threshold?
No. The value of your primary residence is explicitly excluded from the net worth calculation under SEC rules.
Can a business or entity qualify as an accredited investor?
Yes. Businesses, trusts, and investment companies with more than $5 million in assets generally qualify. Entities in which all equity owners are individually accredited also qualify, regardless of total assets.
What types of investments are only available to accredited investors?
Accredited investors can access private equity funds, hedge funds, private real estate funds, private credit vehicles, DSTs, and QOZ funds—investment types that are exempt from SEC registration requirements and not available through public markets.
