Being an accredited investor can come with a few perks. Accredited investors are a group of people with the financial means or knowledge to access investments that others typically cannot. Accredited investments include certain hedge funds, venture capital firms, commercial real estate, private equity real estate, etc.
For those who have achieved this status, it is worthwhile to explore the various types of investments available to accredited investors. These investment opportunities will allow you to generate passive income, diversify your investment portfolio, and build long-term wealth.
But before we get into it, we must discuss the Securities and Exchange Commission’s definition of an accredited investor. How does one know if they have achieved “accredited investor” status? Let us look closer.
WHAT IS AN ACCREDITED INVESTOR ACCORDING TO THE SEC?
According to Rule 501 of Regulation D of the Securities Act of 1933 (Reg. D), an accredited investor is defined by the U.S. Securities and Exchange Commission (SEC) as a natural person with income that exceeds $200,000 in each of the two most recent years, with a reasonable expectation of the same level of income in the current year. For spouses, a joint income that exceeds $300,000 is required. [1][2]
An accredited investor may also be a natural person with an individual net worth or joint net worth with the person’s spouse that exceeds $1 million. This net worth excludes the value of the person’s primary residence. Before the passage of the Dodd-Frank Act in 2010, a person’s primary residence was included in determining their net worth. [1][2]
TOP INVESTMENT AREAS FOR GROWING WEALTH
For high-net-worth (HNW) individuals, the goal is usually to maintain, secure, and protect their wealth. However, part of this involves growing their wealth, which entails investing some of that money in the right investment vehicle. Anyone can choose an asset class that works for them, but accredited investors have access to even more options.
Due to their high net worth and larger financial safety net, accredited investors have access to a significantly broader array of investment opportunities. They can explore venture capital funds, private equity funds, commercial real estate investments, and many other potential investments that are not available to most.
These investments are typically associated with greater risk. Hence, they are limited to accredited investors. But with that in mind, these investment opportunities also come with greater potential rewards. They suit investors interested in adopting a more aggressive approach to their investment strategy. They face greater risks, but they may also enjoy higher returns.
HEDGE FUNDS
The SEC requires that hedge funds pool money from investors (limited partners) and invest in securities or other assets to generate positive returns. They are “Not regulated as heavily as mutual funds and generally have more leeway than mutual funds to pursue investments and strategies that may increase the risk of investment losses.” [3]
Because of the nature of hedge funds, they are typically considered higher-risk investment choices and are limited to accredited investors who can afford the associated higher fees and risks. [3]
VENTURE CAPITAL
Venture capital is a form of equity financing wherein angel investors and venture capitalists provide a portion of the seed capital necessary for small businesses and startups that show promise.
This is typically in exchange for a share of ownership in the company, but could take the form of convertible debt. [4] Startups and businesses can then use the venture capital to test product ideas and explore new business ventures. In some cases, these funds are used for the growth and expansion of an established company. [5]
REAL ESTATE INVESTMENT TRUSTS (REITs)
Most investors know that real estate investing can be very lucrative. There are many ways to participate in the real estate market. You can go for commercial real estate investments, residential real estate, or even private real estate investments. However, some real estate investments are more suitable for accredited investors than others.
A real estate investment trust (REIT) is a corporation, trust, or association that directly invests in income-producing real estate. It offers a more accessible entry point, often with lower minimums, appealing to those with limited capital. By purchasing shares in a REIT, investors can gain exposure to the real estate market without directly buying, managing, or financing a property themselves. [6]
REITs and multifamily private placements (also known as syndications) have several key differences, some of which are notable, as follows: portfolio composition, ownership structure, accessibility, minimum investment requirements, liquidity, tax benefits, and potential returns. [7]
REITs also differ from private real estate funds in that they typically distribute dividends regularly. While some funds offer distributions, many primarily provide value through appreciation. [6]
PRIVATE EQUITY REAL ESTATE
Although they share some similarities, private equity real estate differs from REITs. Private equity represents one’s ownership (stake) in a private business. In real estate private equity (REPE), it means one’s ownership (stake) in real estate. Private equity (PE) originates from firms run by general partners (GPs), also referred to as sponsors. GPs raise capital from limited partners (LPs) or investors. In real estate private equity (REPE), these investors may include pension funds, insurance firms, endowments, family offices, and high-net-worth (HNW) individuals. Typically, the firm will focus on offices, retail, industrial, and multifamily properties. [8]
Private equity in multifamily real estate aims to create funds to acquire, manage, and (sometimes) sell multifamily real estate assets. This investment vehicle has become invaluable to those who have learned to mitigate its risks, offering a unique way for investors to manage their income passively. This is where private placement or syndication comes in. [8]
MULTIFAMILY PRIVATE PLACEMENT (SYNDICATION)
A multifamily private placement deal occurs when multiple investors pool their capital to purchase a single property or a portfolio of properties. Owners can accomplish this with almost any type of real estate property, but when done with a multifamily property, it is referred to as multifamily private placement. [9][10]
This may sound similar to a REIT, but private placement is different. In real estate, private placement (syndication) refers to a group of investors interested in investing in a portfolio of properties or a large property, typically ones they could not purchase individually. [7]
In multifamily private placement, a sponsor, such as BAM Capital, is responsible for identifying a property, developing the investment strategy, facilitating the transaction, securing financing, and managing the investment once the property or portfolio is acquired. Investors supply a portion of the capital required in exchange for equity, depending on the deal structure. [7]
Passive investors or limited partners do not own the property directly. Two main parties are typically involved: the sponsor and the limited partners (LPs).
The real estate sponsor serves as the deal’s general partner (GP). They are responsible for locating the investment property, underwriting, completing due diligence, securing financing, and developing and executing a business plan. They partner with investors seeking to participate in the deal. [7]
Conversely, investing in REITs means purchasing shares in a company that owns and manages real estate assets. [7]
WORK WITH BAM CAPITAL FOR MULTIFAMILY REAL ESTATE INVESTING
As a whole, real estate can be a potentially lucrative asset class to invest in. There are also many ways to participate. You can go for a commercial real estate investment, a residential real estate property, or even vacant land. However, another viable option for accredited investors is multifamily private placement.
BAM Capital partners with accredited investors who want to enjoy passive income and all the other benefits of multifamily private placement. As the private equity arm of The BAM Companies, BAM Capital has been focusing on buying assets targeted as having strong profitability potential and staying disciplined in its investment thesis. BAM Capital’s investment strategy aims to create forced appreciation while mitigating investor risk. To date, the brand has successfully managed over $1.7 billion in assets across ~9,000 apartment units.
Remember that no investment is without risk. Before making financial decisions, consult your investment advisor and schedule a call with a BAM Capital investment team member.
For additional multifamily real estate insights, visit Pathways to Passive Wealth, BAM Capital’s new platform designed to make real estate investing more accessible, transparent, and achievable for aspiring and experienced investors.
Disclaimer: All investments carry risk, including potential loss of capital. This content is for informational purposes only and is not financial, legal, or investment advice, nor an offer or solicitation to buy or sell any security. Consult an independent advisor for personalized guidance and contact BAM Capital for details on current offerings. BAM Capital and its representatives are not fiduciaries or investment advisors. The information provided is general and may not reflect individual financial goals. Any financial terms, projections, or forward-looking statements contained herein are hypothetical in nature and should not be interpreted as guarantees of future performance or safety. Such statements reflect BAM Capital’s opinion and are subject to market fluctuations, economic conditions, and investment risks. Past performance does not predict future results. BAM Capital and its affiliates do not guarantee the accuracy or completeness of this information. BAM Capital offers investment opportunities under Rule 506(c) of Regulation D exclusively for accredited investors as defined by the SEC. Verification of accredited investor status is required prior to participating in any investment.
© 2025 BAM Capital. All rights reserved.
SOURCES:
[1]: Investopedia. (2024). “How to Become an Accredited Investor.” https://www.investopedia.com/articles/investing/092815/how-become-accredited-investor.asp
[2]: BAM Capital. (2025). “Accredited investor requirements & what you need to know.” https://bamcapital.com/what-is-an-accredited-investor/
[3]: Investor.gov. (n.d.). “Hedge Funds.” https://www.investor.gov/introduction-investing/investing-basics/investment-products/private-investment-funds/hedge-funds
[4]: J.P. Morgan. (2024). “What is venture capital?” https://www.jpmorgan.com/insights/investing/investment-strategy/what-is-venture-capital
[5]: Rocket Mortgage. (n.d.). “Accredited investor opportunities.” https://www.rocketmortgage.com/learn/accredited-investor-opportunities
[6]: BAM Capital. (2025). “What is private placement?” https://bamcapital.com/what-is-private-placement/
[7]: BAM Capital. (2025). “REIT vs. multifamily syndication: Real estate investing.” https://bamcapital.com/reit-vs-multifamily-syndication-real-estate-investing-2/
[8]: BAM Capital. (2025). “Understanding private equity in multifamily real estate.” https://bamcapital.com/understanding-private-equity-in-multifamily-real-estate/
[9]: The Motley Fool. (2024). “How to Start Investing in Real Estate: The Basics.” https://www.fool.com/investing/stock-market/market-sectors/real-estate-investing/basics/
[10]: BAM Capital. (2025). “Purchasing and running an apartment complex.” https://bamcapital.com/purchasing-running-an-apartment-complex/
