Accredited investors have greater opportunities than the average investor to participate in higher-risk, yet potentially more highly profitable investments. Below, we cover a number of the top investment opportunities available to those with accredited investor status.
The accredited investor should exercise due diligence before participating in any of the following investment options.
Crowdfunding
The practice of crowdfunding involves raising money online to fund a company, product, or project from investments made online by the general public. Online crowdfunding platforms facilitate this model of fundraising through deposits made on websites and apps. Real estate crowdfunding and equity crowdfunding are two types of crowdfunding available to accredited investors.
Real Estate Syndication
Real estate syndication – also called property syndication – involves a group of investors who pool funds to invest in real estate property that any of the investors individually could not otherwise afford to do.
REITs
An acronym for Real Estate Investment Trust, a REIT is a company arranged as a trust that pools and oversees funds used to invest in various types of property that generate profit.
Convertible Investments
Convertible investments such as preferred shares or bonds are financial securities that may be converted to common stock for a preselected price and that over time may increase in value. Individuals with accredited investor status often use convertible investments to support businesses they believe have strong, long-term revenue and growth potential.
Hedge Funds
Mutual funds and exchange traded funds (ETFs) are examples of hedge funds. These funds are managed professionally by career investors but are not subject to the same level of scrutiny and regulation as some other investment options.
Private Equity Real Estate
These are investments made in funds under professional management. The investments may include different offerings of speculative property ranging from new luxury high-rises to undeveloped land.
Venture Capital
Also referred to as risk capital, venture capital is a type of equity financing that angel investors and venture capitalists use to supply capital to potentially successful small businesses and startups in exchange for part ownership of the company.
Hard Money Loans
These are short-term loans offered by private businesses (not traditional lenders) or individuals who are willing to receive collateral in the form of a piece of property or another asset.
Interval Funds
These are closed-end funds with shares not usually up for trading on the secondary market. Rather, they operate as an investment firm that from time to time offers to buy back shares from its shareholders.
As you can see, there are a variety of investment instruments available to those with accredited investor status who are interested in accessing new opportunities to earn income.
