Alternatively known as “crowdinvesting”, real estate crowdfunding is an internet platform that brings together non-institutional investors with owners, developers, and operators of real estate.
How much can a purchaser buy? What are investor’s rights? How much can an issuer raise? How is the offering conducted? How is a portal operated?
Most capital is raised privately based on one of the “safe harbor” exemptions under a set of rules known as Regulation D.
Who may invest?
Generally, an investor must be “accredited.” An “accredited investor” can be either an institutional investor or an individual.
How can individuals qualify to be an “accredited investor”?
There are two tests: One is based on net income and the other is based on net worth. Specifically:
If an individual’s net worth, or joined with a spouse’s net worth, exceeds $1 Million, excluding the value of the person’s primary residence OR
The individual’s annual income is in excess of $200,000, or joined with a spouse’s net worth in excess of $300,000, in each of the two most recent years, and each person(s) has a reasonable expectation of reaching the same income level in the current year.
For more information, contact the Law Offices of Leo T. White