An accredited investor, in the context of a natural person, includes anyone who:
- Has earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current calendar year, OR
- Has a net worth over $1 million, either alone or together with a spouse or spousal equivalent (excluding the value of the person’s primary residence), OR
- Holds good standing a Series 7, 65 or 82 license
On the income test, the person must satisfy the thresholds for the prior two years consistently either alone or with a spouse, and cannot, for example, satisfy one year based on individual income and the next two years based on joint income with a spouse. The only exception is if a person is married within this period. The person may satisfy the threshold based on joint income for the years during which the person was married and based on individual income for the other years.
In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:
- Any trust with total assets more than $5 million, not formed to specifically purchase the subject securities, and whose purchase is directed by a sophisticated person, OR
- Certain entity with total investments more than $5 million, not formed to specifically purchase the subject securities, OR
- Any entity in which all the equity owners are accredited investors.
In this context, a sophisticated person means the person must have, or the company or private fund offering the securities reasonably believes that this person has, sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the prospective investment.
There are several options for types of entities/accounts you can use when investing in our funds. You can invest as an Individual, Jointly, through an LLC (Limited Liability Company), Corporation, Partnership, Retirement Plan/401K, or a Trust.
If you have an existing IRA, or a 401K from a previous employer, it is likely that you will be able to self-direct all or a portion of it into our investment vehicles. Check with your current custodian to see if they will allow you to self-direct your retirement account. If the answer is no, please contact a member of our investor relations team by email at Abel@5tcre.com, call us at 1-210-941-4080, or text us at 1-210-941-4080, and we will introduce you to one of the custodians that we work with that will allow you to invest in alternative assets using your retirement funds.
You will receive a Form K-1. A Form K-1 is a tax form used by partnerships to provide investors with detailed information on their share of a partnership’s taxable income. Our goal is to finalize all Form K-1s annually by March 31st, however, we do rely on outside reporting and may require additional time to furnish the forms in a way that is to the investor’s best advantage. Accordingly, you may be required to obtain one or more extensions for filing federal, state and local tax returns, but that is not our intention.
You can invest in our accredited fund if you live in another country. Depending on how you structure your investment, different documents may be required. We have international investors today, but most are a U.S. citizen or resident, U.S. partnership, corporation or entity, or U.S. estate or trust.