What Is an Accredited Investor?

August 8, 2025

Accredited investors have more options, but you don’t need to be one to start investing

Some investors have a VIP pass, gaining access to front-row seats at hedge funds, private equity, and exclusive real estate deals. Others are behind that velvet rope. The big divider is whether you're an accredited investor.

That said, there are still plenty of ways to invest even if you're not on that list, and we'll cover those, so stick around. For now, let's unpack what accredited investor status really means, how to qualify, and why it matters, and sometimes not, especially in real estate.

What Qualifies Someone as an Accredited Investor?

You'll need to meet income, net worth, or expertise requirements, no secret handshake required. According to the Securities and Exchange Commission (SEC), an accredited investor is someone who meets at least one of the following criteria:

• Earning over $200,000 or $300,000 jointly with a spouse or partner in each of the last two years, with the expectation of maintaining that income.
• Holding a net worth of over $1 million, individually or combined with a spouse, not including the value of your primary residence.
• Possessing professional credentials or experience that demonstrate financial sophistication, such as holding Series 7, 65, or 82 licenses.

If these requirements seem a bit steep, there’s a reason for them. Meeting just one is a signal to regulators that you likely have the financial footing and know-how to handle more complex and riskier investments.

What Is an Accredited Real Estate Investor?

Now let’s get specific. An accredited real estate investor is someone who meets one of the SEC’s criteria and uses that status to access private real estate deals. These opportunities often require minimum investments of tens of thousands of dollars.

Types of investments include:

• Real estate syndications
• Private equity real estate funds
• Direct investments in large developments

Deals like these often come with the potential for higher returns than your average Real Estate Investment Trusts (REIT) or fractional real estate platform. One significant reason is access to less crowded markets, which means less competition and better opportunities.

What About Non-Accredited Investors?

If you don’t meet the lofty requirements to be an accredited investor, you’re in the majority. And that’s perfectly fine because you’re not locked out of the investing world. In truth, when it comes to how to get started in real estate investing, there are more accessible options available today than ever before.

Non-accredited investors can still invest in:

• Public REITs
• Crowdfunding real estate platforms
• Peer-to-peer lending
• Real estate-backed loans, like those on Groundfloor

While some of these opportunities may offer lower potential returns than private equity deals, they’re typically more transparent, more regulated, and far more accessible, sometimes starting with a minimum investment of $10.

That’s the case with Groundfloor’s Limited Recourse Obligations (LROs). Investors can pick individual real estate loans, view the properties, and cherry pick exactly where to invest. For easier diversification, Flywheel Portfolio starts at just $100. It is our own version of a REIT doesn't require a brokerage account. Even better, it makes it simple to earn passive income.

Accredited vs Non-Accredited Investors

To make things clearer, here’s a side-by-side look at how accredited and non-accredited investors compare.

*Minimum investment amounts can vary. Some funds may allow lower minimums for accredited investors, while others may require higher amounts depending on the investment type.

How Do You Become an Accredited Investor?

You don't need to register with the SEC or complete a formal application to become an accredited investor. Instead, accreditation is verified on the platform by the company or platform offering the investment. 

If you meet one of the SEC's criteria, such as having an annual income over $200,000 (or $300,000 jointly), a net worth over $1 million excluding your primary residence, or holding specific professional financial licenses, you may qualify. 

When you express interest in an accredited-only investment. Here's what usually happens, the issuer may require documentation to verify your status. Documents may include your recent tax returns, bank or brokerage statements, a letter from a CPA or licensed attorney, or proof of financial certifications like a Series 7, 65, or 82 license. 

Some platforms do their best to simplify the process through third-party verification services that review your documents and issue a compliance letter. Please note that each platform may have slightly different verification standards or timelines. Your status isn't permanent, and you may need to reverify periodically for future investments.

Is Becoming an Accredited Investor Worth It?

If you're working toward building long-term wealth, getting accredited can definitely expand your investment toolkit. But it shouldn't be considered a badge of honor. It’s just a way to unlock investments that might otherwise be off-limits, if you're willing to take on bigger risks. 

It’s also worth considering that alternative investment platforms, most notably Groundfloor, are making once-private opportunities more accessible. This shift is helping level the playing field for non-accredited investors.

Finally,  working toward becoming accredited is not something to rush. Take the time to build your investing knowledge, diversify your portfolio, and grow your net worth without being accredited. That foundation not only sets you up for long-term success, it also helps you make smarter decisions once more advanced opportunities come into view.