As a newer investor, it makes sense that there’s a wide range of experience levels in the world of real estate investing. But the reality is that certain deals only allow accredited investors to participate.
“Wait a minute…I have to already be wealthy to use these opportunities to grow my wealth?” Umm…basically, yeah.
The laws enacted by the US Securities and Exchange Commission (SEC) are written this way to protect non-accredited investors; however, it can also slow them down in building up their own wealth to become accredited, which can feel like a slap in the face.
That slap stings more when you realize there’s no online class or certification you can take to become “one of them.” At least, not yet – there’s a proposal to implement something like that before long.
So, what then?
A Round of Applause for All the
Non-Accredited Investors
If you’re not an accredited investor, and you’re reading this right now, you should be proud of yourself for taking steps to understand how to build your wealth and passive income.
Most people are perfectly happy working for 45 years of their lives, keeping up with the Joneses, and trying to survive retirement on social security, their 401k’s, and MediCare. Some are just dreaming of “one day” when they reach a milestone like a promotion or a raise because they think that’s what it will take to allow them to begin investing.
If you want more than that for your life…well, so did we, and we salute you!
Related article: How to Quit Your Job by Investing in Real Estate
Investing in Real Estate When You’re Not an Accredited Investor (Yet)
Take some encouragement from this article, because finding out that some real estate opportunities aren’t available to you can definitely be disheartening. However, there are many, many opportunities that even non-accredited investors can get into.
Which is exactly what you’re going to learn here. Below, you’ll find 8 ways that nearly ANYONE can invest in real estate.
- Buy and hold rentals
- House hacking
- Fix-and-flips
- BRRRR strategy
- Private lending
- Joint venture partnerships
- Real estate crowdfunding platforms
- Private real estate syndications
None of these require you to be an accredited investor, but they’re ways you can build passive income.
Buy and Hold Rental Properties
Most people are familiar with how having one or more rental properties works. You buy a home and rent it out, usually with a mortgage loan for each property.
The greatest perk to these types of investments is that you’re in charge. You can choose to manage it all yourself or hire a property management firm, you can choose when to buy and when to sell, and you get to decide what renovations
you’ll make.
However, the flipside of that power is the responsibility. Everything rests on your shoulders, and the loan is in your name and on your personal credit report. When things go well, that’s to your credit. But when things go wrong, that’s on you too.
Rental properties are definitely open to non-accredited investors. They require a moderate level of work, and are long-term investments with a low-to-moderate risk. You can take depreciation on them, which may lower your taxes while you own them. If you hold them longer than one year, the equity growth is taxed as long-term capital gains, which have a lower tax rate than short-term capital gains or ordinary income. It is also easier to use creative financing strategies with single family rentals, which could help reduce the up-front capital required or help finance a property even if your credit isn’t the best.
House Hacking
House hacking is one way many people become landlords without taking out a separate mortgage. They might find a place with an upstairs and downstairs unit, for example, or a duplex, triplex, or 4-plex, and rent out most of the units while living in one.
That rental income helps pay for the mortgage, and – depending on the amount of the mortgage and the
rental rates, might even pay for the entire mortgage, allowing you to live rent-free.
This is a great option for real estate in more highly-priced areas. It is open to non-accredited investors, requires a

moderate level of work, and is a long-term investment with low risk. When you sell the property, you may be able to take advantage of the capital gains tax exclusion, which exempts you from owing capital gains tax on a property’s profits (up to certain limits) if you’ve lived there for at least 2 of the last 5 years when you sell. If you are in the military, or were when you bought the property, you may even be able to extend that up to 2 out of the last 15 years (check with your CPA).
Fix-and-Flips
So…you like really involved, hands-on, active investments? If so, a short-term purchase where you repair and remodel the property yourself and “flip” it (sell it for a profit) might be fun.
One downside is that it might take substantial capital to get started, especially if you buy in an expensive area. The cost to purchase the property, the value to fund the rehab, and the money to cover the mortgage payment until the property sells should all be set aside prior to making the deal.
You also face immediate market volatility, and may have to hold the property longer than expected or sell it for less than expected, which would cut into your potential profit.
Fix-and-flips require a high degree of involvement and carry a higher risk than some other options presented in this article. Like buy-and-hold, you may be able to use creative financing strategies. One last negative is that, since you’re usually trying to buy, rehab, and sell a property in less than 12 months, the profits are usually taxed as short-term capital gains, which have the same tax rate as ordinary income, like a W-2 job. If you invest like this, you may want to simultaneously invest in ways that provide extra depreciation that can lower your taxes.
BRRRR Strategy
The BRRRR strategy is a combination of the buy-and-hold and the fix-and-flip options. It stands for Buy, Rehab, Rent, Refinance, Repeat.
The first half of the strategy looks just like a fix-and-flip. You buy a property that needs some TLC and improve it through some rehab, raising the property value.
The second half of the strategy looks much more like a buy-and-hold. Once the renovations are complete, you find tenants. Once it’s rented, you do a cash-out refinance (you can do that once the property value’s been increased through the renovations) and use the cash from refinancing to repeat the process with
another property.
If you assume the property’s value increased enough after the renovations, you may even be able to pull out all of your original capital, plus you may be able to use a creative financing strategy for the front-end purchase and rehab.
The BRRRR strategy is extremely powerful. It’s open to non-accredited investors, requires a high level of work, and is a long-term investment option with
moderate-to-high risk. Also, because you’re just refinancing the loan without
selling and holding it for a longer period, you’ll only be taxed at the long-term capital gains rate.
Private Lending
One side of real estate investing that can easily be overlooked is investing in debt. This is where you loan someone money, perhaps to another investor for a fix-and-flip. You don’t have to be hands-on in the home purchase, renovations, or sale process, nor do you have to be an accredited investor.
As an example, you could loan an eager but cash-poor investor the fix-and-flip money for 12 months at 10% interest. They turn the house around within the 12-month period, and you earn 10% on the loan. Your risk is relatively low because it’s backed by the property, your workload is low, and you don’t have to be accredited for these short-term investments.
But you do need to know what you’re doing and have solid legal support. As an alternative, some people choose to invest through a private lender who lends the combined funds out, similar to a syndication.
Joint Venture Partnerships
If single-family homes don’t thrill you, multifamily or commercial real estate might pique your interest. If you also have the capital plus some skills to contribute, you might be a great potential joint venture partner.
A JV partnership is where a handful of people invest together and split the tasks of management and renovations between them. Each person has an active role;
there are no passive investors. This may make sense on properties like small apartment buildings/complexes, self-storage facilities, or mobile home parks, among others – this is where you move out of small residential properties and toward larger real estate.
These types of opportunities are open to non-accredited investors, involve a high level of work, a moderate level of risk, and a flexible timeline, depending on the project. Similar to a buy-and-hold strategy, the degree of success depends on the JV partners’ abilities and efforts.
Also, the higher value of commercial properties (compared to single family, etc.) usually makes it feasible to take accelerated depreciation through cost segregation, which can mean serious tax deductions.
Real Estate Crowdfunding Platforms
Real estate crowdfunding platforms are similar to Kickstarter, but for real estate. These platforms contain opportunities for a variety of projects, from fix-and-flips to large-scale value-add multifamily projects.
You invest capital in exchange for a portion of the returns without having to do any of the work. Most of these types of opportunities are for accredited investors only. However, there are some real estate crowdfunding sites that offer REITs (real estate investment trusts) for non-accredited investors.
REITs don’t give you benefits of direct ownership, but they can be good vehicles for investing passively and typically require low minimum investments with low risk and a low threshold of work involved. Many REITs are traded by licensed brokers like exchange-traded mutual funds; however, they aren’t correlated to the movement of the stock market.
With REITs, you typically get routine dividends, and may share proportionately in a small portion of the equity growth, but it’s nothing compared to the opportunity (and risk) of investing through JV partnerships or syndications.
Private Real Estate Syndications
Real estate syndications are deals where a group of investors pool their resources to invest in a larger asset than they’d be able to buy on their own. At first glance, this may sound a lot like a JV deal. However, JV investors each have specific, active roles in managing the property.
In a syndication, most of the investors are passive investors (limited partners) – meaning they won’t be involved with the property renovations or make any big decisions. The small team of people who identify the property, put the deal structure together, and take the loan out to buy the deal are the sponsors, syndicators, or general partners.

A syndication is usually used to buy a larger property, like an apartment asset from 40’ish to several hundred units, industrial properties, or office or retail facilities – this is definitely getting toward the big leagues.
Some real estate syndications are only open to accredited investors due to the SEC regulations. However, the SEC regulations also allow a way of structuring deals where they can be open to non-accredited investors, too. They just can’t be publicly advertised.
Therefore, you have to know someone who’s part of the deal’s general partnership to gain
access. This is where, as a non-accredited investor, you have to be willing to network with people to find deals that will be open to you. (Good news! These are the types of deals we offer. You can join our BluSky Investor Club to be eligible to receive investment offerings.)
Because these deals are passive, they require a low level of work (research and connection upfront) and carry low risk as a long-term investment. These deals even allow you to invest retirement account funds, as long as they’re self-directed.
Similar to with JV partnerships, the size of the deals makes if feasible to take accelerated depreciation through cost segregation, which is open to both the passive investors and the sponsors. By structuring and timing these deals correctly, as well as by qualifying as real estate professionals for tax purposes, some investors are able to legally pay no taxes while making hundreds of thousands, and even millions, per year.
Takeaways
If you’re a newer investor and not accredited yet, then good for you…reading this article exhibits your proactiveness about building wealth and passive income.
The 8 ways you can invest in real estate as a non-accredited investor that we examined here (out of an infinite number of possibilities) were:
- Buy-and-hold rentals
- House hacking
- Fix-and-flips
- BRRRR strategy
- Private lending
- Joint Venture partnerships
- Real estate crowdfunding platforms
- Private real estate syndications
Realizing that certain opportunities are not available to you might get you down. But just because a deal is available to accredited investors, that doesn’t mean it’s that great. Often, there are faster and more powerful ways for non-accredited investors to accumulate wealth through real estate, especially with some work.
Note: The information in this article about income taxes is our best understanding and for informational purposes only. We are not tax advisors, and this should not be construed ase tax advice. Readers are encouraged to consult with their own tax advisors regarding their personal situations.
Further reading: Real Estate Syndications — Are They Right for You?
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