Accredited investors only.
An accredited investor is a person or entity the SEC permits to buy securities that aren't registered for sale to the public. Most of the tax-advantaged real estate we work in — Delaware Statutory Trusts, private REITs, Opportunity Zone funds, and oil and gas programs — is sold privately under exemptions from securities registration, and meeting this defined SEC standard is the price of admission.
The status is not a credit score and it is not a suitability finding. It is a gate: you either clear one of the defined tests or you do not. And being accredited does not mean an investment is safe or right for you — it means you are allowed to consider it. Private placements are speculative and illiquid, and you can lose your entire principal. Accreditation is the floor, not a recommendation, and the suitability work still has to happen on top of it.
Every way to qualify in 2026
Income Test
Income over $200,000 individually — or $300,000 jointly with a spouse or spousal equivalent — in each of the two most recent years, with a reasonable expectation of the same this year. A single big year does not do it, and you cannot switch between individual and joint measurement to manufacture a pass.
Net-Worth Test
Net worth over $1,000,000, alone or with a spouse, excluding your primary residence. Home equity does not count toward the million, and the mortgage generally does not count against you — unless the loan is underwater, or you borrowed against the home in the ~60 days before investing.
License Pathway (2020)
Hold a Series 7, Series 65, or Series 82 license in good standing and you are accredited, full stop — regardless of income or net worth. The Series 65 route quietly matters most, because it does not require employment at a broker-dealer.
Entities & Family Offices
An entity qualifies with more than $5,000,000 in assets (if not formed solely to buy the deal), or when every equity owner is accredited — the path most investment LLCs use. Family offices managing $5M+ and their family clients also qualify.
You only have to pass one test, never two. If you invest through an LLC or trust, confirm with counsel which test your entity actually meets before you subscribe — the subscription documents will ask you to certify a specific basis.
Rule 506(b) versus Rule 506(c)
Most private real estate is sold under one of two flavors of Reg D, and the difference controls how your status gets confirmed. Rule 506(b) is the older, quieter path: no advertising, deals flow through existing relationships, and you typically self-certify by checking boxes in the subscription agreement. Rule 506(c) traded the advertising ban for a verification duty: the issuer can market the offering openly, but must take reasonable steps to verify that every investor is accredited — self-certification is not enough.
| Factor | Rule 506(b) | Rule 506(c) |
|---|---|---|
| General solicitation | No — no advertising or public marketing | Yes — the offering can be advertised openly |
| Verification required | No — investors self-certify | Yes — the issuer must verify each investor |
| How status is confirmed | Checkbox and signature in subscription docs | Tax documents, third-party letter, or verification service |
| Investors | Unlimited accredited + up to 35 sophisticated non-accredited | Accredited investors only |
General comparison of the two most common Regulation D offering types. Specific terms vary by offering; read the PPM.
What verification actually looks like
For a 506(b) deal, verification is light: you complete an investor questionnaire, check the box for the basis on which you qualify, and sign. For a 506(c) deal, the real documentation shows up. To verify income you typically provide tax returns or W-2s for the two relevant years plus a written representation about this year; to verify net worth, statements of assets plus a credit report to confirm liabilities. The cleaner route for many investors is a third-party letter — a signed confirmation from your CPA, attorney, registered investment adviser, or broker-dealer that they have reviewed your situation and you are accredited.
The practical takeaway: confirm your status early, before you fall in love with a specific deal. Accreditation is determined through the subscription process for each offering; this page is educational, not legal or tax advice — thresholds and definitions can change, so confirm current rules with your own advisers.
Securities offered through Aurora Securities, Inc. (ASI) — CRD #46147, SEC #8-51322 — member FINRA/SIPC. Gerald F. 'Jerry' Baker, III is a registered representative of ASI (FINRA CRD #7537416). Baker 1031 Investments, LLC is independent of ASI and is not a registered broker-dealer or investment adviser. This page is informational only and is not an offer to sell or a solicitation of an offer to buy any security, or tax or legal advice; any offer is made solely through a sponsor's private placement memorandum following a suitability determination. DST and related securities are speculative and illiquid, for accredited investors only, and involve substantial risk including possible loss of principal.