Estimated reading time: 12 minutes
When delving into the realm of real estate investments, non-accredited investors often encounter the challenge of limited access to certain lucrative opportunities typically reserved for those with a higher income or net worth. Accreditation, as defined by the Securities and Exchange Commission (SEC), establishes criteria that classify investors based on income or net worth requirements. This classification, while segregating investors into categories like “accredited” and “non-accredited,” might initially seem discouraging for new investors eager to explore real estate.
For many new members entering the world of real estate investments, the realization that some doors are closed due to accreditation criteria can be disheartening. However, this article aims to empower non-accredited investors by shedding light on alternative investment avenues. As a non-accredited investor, you are not restricted from engaging in diverse and rewarding real estate opportunities.
Key Concepts:
Non-Accredited Investors
If you’re not an accredited investor, your level of awareness and interest in real estate investments is commendable. Many new investors start their journey by exploring passive income and financial freedom without initially understanding the complexities of accreditation.
Investment Opportunities
Despite limitations imposed by accreditation status, non-accredited investors have various avenues to explore in the real estate market. These opportunities allow for active participation, providing a chance to build a diversified investment portfolio and create passive income streams.
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Real Estate Syndication Deals
Real estate syndication deals, often associated with sophisticated investors and hedge funds, can also be accessible to non-accredited investors through specific channels. This article will guide you through different types of investments within the real estate sector.
Passive Income and Financial Freedom
The ultimate goal for many investors, regardless of accreditation status, is to achieve passive income and financial freedom. Understanding the available investment options is crucial for individuals looking to secure their financial future.
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Long-Term Investment
The focus of this article is on long-term investment strategies that allow non-accredited investors to actively participate in the real estate market. These strategies offer a balance between risk and potential returns.
In the following sections, we will explore eight ways in which non-accredited investors can engage in real estate investments. From traditional rental properties to innovative strategies like the BRRRR method, each option offers unique benefits and considerations. As we navigate through these opportunities, remember that your journey towards financial independence is a continuous learning process, and this article serves as a valuable resource in your pursuit of real estate success.
8 Ways ANYONE Can Invest In Real Estate
1. Buy and Hold Rentals
Most people are familiar with how having rental property works. You buy a home and rent it out.
The greatest perk to these types of investments is that you’re in charge. You can choose to manage it all yourself or hire a property management firm.
It’s your choice when to buy and when to sell, and you get to decide on the renovations.
The alternate to this power though is the responsibility. Everything rests on your shoulders, and when things go wrong, that’s on you too. Clogged toilet at 3 AM? It’s YOU that has to answer that call!
This is one of the main reasons I chose to invest in the passive route. I didn’t want a second job.
Rental properties are definitely open to the non-accredited investor, require a moderate level of work, and are long-term investments with a low-to-moderate risk.
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2. Fix and Flips
If you’re the type of investor that likes to take a hands-on approach, then fix and flips may be just the thing you need to get started.
These investments are usually a short-term purchase where you repair and remodel the property yourself and “flip” it (sell it for a profit).
The downside is that it might take substantial capital to get started, especially if you’re in an expensive area. This may be tough for the new doctor as they usually carry a boatload of student loan debt.
The cost to purchase the property, plus the value to fund the rehab, plus money to cover the mortgage payment until the property sells should all be set aside prior to making the deal.
You also face immediate market volatility and may have to hold the property longer than expected or sell for less than expected, which would cut into your potential profit.
It’s for these reasons that fix and flips typically carry a higher risk than some other options on this list.
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3. BRRRR Strategy
The BRRRR strategy is a combination of the buy-and-hold and the fix-and-flip options.
It stands for:
- Buy
- Rehab
- Rent
- Refinance
- Repeat
First Half:The first half of the strategy looks just like a fix-and-flip. You buy a property that needs some TLC and give the place a facelift.
Second Half:The second half of the strategy looks much more like a buy-and-hold. Once renovations are complete, you find tenants. Once rented, you do a cash-out refinance and repeat the process with another property.
Assuming after renovations were complete, the property’s value increased substantially, you may be able to pull out all of your original capital.
The BRRRR strategy is extremely powerful, open to a non-accredited investor, requires a high level of work, and is a long-term investment option with moderate-to-high risk.
Multifamily Syndication: A 2024 Real Estate Guide(Opens in a new browser tab)
4. Private Lending
One side of real estate investing that can easily be overlooked is investing in debt.
For example, this is where you loan someone money to complete a fix-and-flip.
You don’t have to be hands-on in the home purchase, renovations, or home selling process, nor do you have to be an accredited investor.
Most beginner investors are still working full time. Combine that lack of time (but a surplus of money) with a cash-strapped go-getter ready to do all the dirty work, and you have a deal.
As an example, you could loan them the fix-and-flip money for 12 months at 10% interest. They turn the house around within the 12-month period, and you earn 10% on the loan.
Your risk is relatively low because it’s backed by the property, your workload is low, and you don’t have to be accredited for these short-term investments.
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8 Ways ANYONE Can Invest In Real Estate (Continued)
5. Joint Venture Partnerships
If single-family homes spell B-O-R-I-N-G to you, multifamily or commercial real estate might pique your interest.
If you also have the capital plus skills to contribute, you might be a great potential joint venture (JV) partner.
A JV partnership is where a small group invests together, and the property renovations and management tasks are split up between them.
Each person has an active role with no passive investors.
This type of opportunity is open to a non-accredited investor, has a high level of work, a moderate level of risk, and a flexible timeline depending on the project.
6. Real Estate Crowdfunding Platforms
Real estate crowdfunding platforms are much like Kickstarter, but for real estate. These platforms contain opportunities for a variety of projects from fix-and-flips to large-scale value-add multifamily projects.
You invest capital in exchange for a portion of the returns without having to do any of the work. Most of these types of opportunities are for accredited investors only.
However, there are a few real estate crowdfunding sites that offer REITs (real estate investment trusts) for non-accredited investors.
REITs don’t give you the benefits of direct ownership, but they are great vehicles for passive investing and typically require low minimum investments with low risk and a low threshold of work involved.
7. Private Real Estate Syndications
Group investments where people pool their resources to invest in a large asset is a real estate syndication deal. At first glance, this may sound a lot like a joint venture situation.
However, JV investors each have a specific, active role in managing the property. In a real estate syndication, most of the investors are passive – meaning they won’t be hands-on with the property renovations or making any big decisions.
This is the MAIN reason I almost exclusively invest in these types of investments in the real estate category.
Many real estate syndications are only open to accredited investors, due to SEC regulations. However, there are a wide variety of opportunities open to non-accredited investors as well.
Since the opportunities for non-accredited investors aren’t able to be publicly advertised, you have to know someone who’s part of a general partnership to gain access.
These deals require a low level of work (research and connection upfront) and carry low risk as a long-term investment.
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Takeaways
Encouragement for New and Passive Investors
If you’re a new or passive investor, navigating the intricate landscape of real estate can be daunting. However, understanding the diverse opportunities available to you is crucial in your journey towards financial independence. Let’s distill some key takeaways from the eight ways anyone can invest in real estate.
- Embrace Learning: For new investors, the learning curve can seem steep, but your commitment to understanding real estate investments is commendable. Continuously educate yourself to expedite your path to building passive income.
- The Power of 8: The highlighted eight ways provide a spectrum of investment options. Each avenue caters to different preferences, risk appetites, and levels of involvement. New investors can explore these choices and tailor their strategies accordingly.
- Active vs. Passive: Recognize the distinction between active and passive roles in real estate. Whether you choose to actively manage rental properties or passively invest in syndications, align your choices with your goals and preferences.
- Diversification is Key: Real estate offers various investment vehicles, from traditional rentals to innovative crowdfunding platforms. Diversifying your real estate portfolio can mitigate risks and optimize returns over the long term.
- Network and Collaborate: Opportunities like joint venture partnerships and private real estate syndications may require networking. Connect with experienced individuals, join investment circles, and leverage relationships to access deals that align with your goals.
- Due Diligence Matters: Regardless of your experience level, conducting thorough due diligence is paramount. Evaluate potential real estate deals meticulously, seek advice from financial advisors, and take charge of your investment decisions.
- Unlock Passive Income: The ultimate goal for many investors, both new and seasoned, is to achieve passive income. Real estate offers avenues for creating sustainable passive income streams, allowing you to live life on your terms.
- Strategic Guidance: Engage with investment advisors and financial professionals who specialize in real estate. Their expertise can provide valuable insights and help you navigate the intricacies of the real estate market.
In essence, the eight ways highlighted in this article offer a roadmap for new and passive investors to embark on their real estate journey. As you explore these opportunities, remember that every investment decision should align with your financial goals and risk tolerance. Stay committed to your path, leverage the power of knowledge, and unlock the vast potential of real estate as a vehicle for financial growth.
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Next up, we’ll delve into Bridgestone Capital and its role in multifamily syndications and joint ventures.
Bridgestone Capital – Navigating Multifamily Syndications and Joint Ventures
Bridgestone Capital: Your Partner in Real Estate Success
As individual investors embark on their real estate journey, the importance of informed decision-making cannot be overstated. In a landscape where due diligence is paramount, Bridgestone Capital stands as a guiding force for those seeking opportunities in multifamily syndications and joint ventures.
1. Own Due Diligence Matters
Understanding the nuances of each investment is a crucial aspect of the real estate journey. Bridgestone Capital emphasizes the significance of investors conducting their own due diligence. This approach empowers individuals to thoroughly assess potential opportunities, aligning with their financial objectives and risk tolerance.
2. Expert Guidance from an Investment Advisor
Navigating the complex terrain of multifamily syndications and joint ventures requires expertise. Bridgestone Capital’s team, including seasoned investment advisors, provides personalized guidance to investors. With a wealth of experience in real estate, these advisors offer strategic insights and support, ensuring that investors make well-informed decisions.
3. Beyond Mutual Funds: Diversifying with Real Estate
While mutual funds are a common investment vehicle, Bridgestone Capital advocates for diversification through real estate. Multifamily syndications and joint ventures offer an alternative avenue for investors to grow their wealth. The firm guides individual investors in expanding their investment portfolios beyond traditional options.
Unlocking Opportunities with Bridgestone Capital
Multifamily Syndications: Building Wealth Together
Bridgestone Capital specializes in multifamily syndications, where a group of investors pool their resources to acquire and manage large-scale apartment buildings. As an individual investor, joining a multifamily syndication allows you to benefit from shared expertise, reduced risk, and potential for higher returns compared to individual investments.
Joint Ventures: Collaborative Investment Success
In joint ventures, Bridgestone Capital facilitates partnerships where investors collectively engage in real estate projects. These collaborations leverage the strengths of each participant, fostering a supportive environment for achieving shared goals. The firm connects individual investors with opportunities that align with their investment preferences and financial aspirations.
Partner with Bridgestone Capital for Your Real Estate Success
As you navigate the world of real estate investments, consider Bridgestone Capital as your partner in building wealth and achieving financial independence. The firm’s commitment to transparency, expertise, and collaboration ensures that individual investors can confidently explore multifamily syndications and joint ventures.
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Contact Jeff Davis at Bridgestone Capital via jeff.davis@bridgestoneinvest.com for expert advice and start building a real estate portfolio that stands the test of time.
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To receive information about passive income ideas please contact me at jeff.davis@bridgestoneinvest.com. We have syndications going on throughout the year.
Always consult with a financial advisor, CPA, or CFP to make sure your financial plans align with your goals, risk tolerance and financial situation.