why do some investmetns require people to be accreddited. like crowdstreet. while others like fundrise dont. and why are accredited investments often better than their poor counterparts. thx
This is the case outside of REPE as well: private placements (investments with a PPM and sub docs, etc.) require investors to either be accredited investors or qualified purchasers, depending on how the offering is organized. Registered securities do not require investors to be accredited or qualified.
Among other reasons, private placements can be better because they are subject to less regulation and can typically have greater illiquidity. Further, the investor base is more sophisticated. All of this is attractive for investment managers.
so are you saying that fundrise private reit is a registered security?
I don’t know about Fundrise. Private REITs are for accredited investors only. There must be a feeder (eREITs? I believe they are public) or something else. I would look into what you are actually buying, if the structure is public knowledge.
ahh i dont use fundrise. was just curious. i invest in crowdstreet, i just dont understand why 1 is for accreddited only but the other is not. when both are neither publicly traded. the terms are so confusing and cross with each other. lol
Different regulations. Limits on how much you can raise in aggregate and per person, etc. Crowdfunding is for relatively small dollars, which is what Fundrise does
SEC.gov | Regulation Crowdfunding
And Crowdstreet seems to be mostly Reg. D 506(c) offerings
Rule 506 of Regulation D | Investor.gov
thank you. this was helpful