Reference
Reg D, 506(b) vs 506(c), and what “accredited” actually means.
Private real estate offerings are securities. They are sold under an exemption from SEC registration, and the exemption a sponsor chooses determines how they are allowed to talk to you and what you have to prove. Here is the short version.
We offer under Rule 506(c)
That is why our deal pages are public and show real numbers — the exemption permits it. The trade-off is strict: every investor in a 506(c) offering must be an accredited investor, and we are legally required to verify that independently rather than take your word for it. If you are not accredited, we cannot accept your investment in these deals, no matter how much we would like to.
506(b) vs 506(c), side by side
Both are exemptions under Regulation D. Both allow unlimited capital to be raised. They differ almost entirely in how the sponsor is permitted to find investors.
| Dimension | Rule 506(b) | Rule 506(c)Ours |
|---|---|---|
| General solicitation | Prohibited. No public advertising, no posting deal terms on a public website, no cold outreach. | Permitted. The offering can be marketed publicly — website, social media, email, events. |
| Who can invest | Unlimited accredited investors, plus up to 35 sophisticated non-accredited investors. | Accredited investors only. No exceptions, no non-accredited allowance. |
| Pre-existing relationship | Required. The sponsor must have a substantive relationship with the investor before the offering. | Not required. Investors may come in cold from a public page. |
| Proving accreditation | Self-certification is generally acceptable — the investor represents their own status. | The sponsor must take reasonable steps to verify: tax returns, brokerage statements, or a letter from a CPA, attorney, or registered adviser. |
| Disclosure to non-accredited investors | If any non-accredited investors participate, substantial audited disclosure is required. | Not applicable — everyone is accredited. |
| SEC filing | Form D within 15 days of first sale. | Form D within 15 days of first sale, marked as a 506(c) offering. |
A sponsor cannot mix the two. Advertising a 506(b) offering publicly destroys the exemption for that deal — which is why sponsors running 506(b) offerings keep their deal rooms behind a login and talk about “relationships” rather than posting terms.
Are you an accredited investor?
You need to satisfy any one of these, under SEC Rule 501(a). Meeting more than one does not help; meeting none means these offerings are closed to you.
Income test
Individual income above $200,000 in each of the two most recent years, or $300,000 jointly with a spouse or spousal equivalent, with a reasonable expectation of the same this year.
Net worth test
Net worth above $1,000,000, alone or with a spouse, excluding the value of your primary residence. Mortgage debt on that residence generally does not count against you unless it exceeds the home’s value or was recently increased.
Professional licence
Holding a Series 7, Series 65, or Series 82 licence in good standing qualifies you regardless of income or net worth.
Entities
Entities with more than $5,000,000 in assets, entities in which all equity owners are accredited, and certain family offices and trusts qualify.
Knowledgeable employees
Knowledgeable employees of a private fund qualify with respect to that fund.
Verification
How we verify, and what we do not keep
Under 506(c) a sponsor must take “reasonable steps” to verify accreditation. Self-certification is not enough. In practice there are three accepted routes:
- 1
A letter from a professional
A CPA, licensed attorney, registered investment adviser, or registered broker-dealer confirms in writing that you are accredited. This is the route we prefer, because it means we never handle your financial records.
- 2
Third-party verification service
An independent service reviews your documentation and issues a verification letter to us. You upload to them, not to us.
- 3
Direct document review
Tax returns or W-2s for the income test, or bank, brokerage and credit statements for the net worth test. We avoid this route where possible.
Verification expires
A verification letter is generally treated as good for three months. If you invest in a later deal after that window, the check has to be redone. That is the rule, not an administrative preference on our part.
Not accredited yet?
You are not shut out of real estate. Direct ownership, a DSCR loan on your own rental, house-hacking a two-to-four unit, or partnering with family are all open to you and none of them require accreditation. That is most of what we do.
See the investor servicesThis page is a summary, not legal advice
Securities law is detailed and changes. The definitions here are simplified for readability. Confirm your own status with your attorney or CPA, and read the offering documents for the deal you are actually considering.
Ready to look at an actual deal?
Every offering shows the equity required, the loan, the rent roll, the fees, and the waterfall — before you give us anything.