Exploring crowdfunding for non-accredited investors can be a confusing experience: there’s a lot of new investment choices out there, but the reality is that most of the marketing money being spent right now (so most of the ads you’ve probably seen) about equity crowdfunding and real estate is going toward “Reg D” platforms that are only available to accredited investors. That means much of the advertising leaves out more than 90% of US households, who don’t meet the SEC’s criteria for an accredited investor. Which is unfortunate, since one of the main goals of crowdfunding legislation was to open up more choices to “regular” investors.
Fortunately there are still plenty of options available in crowdfunding for non-accredited investors, with new ones popping up on a regular basis. Pulled from our database of crowdfunding and alternative investment platforms, here’s 24 25 choices among online investment platforms offering crowdfunding for non-accredited investors. These span a wide range of investment types, from real estate to funding startups to P2P loans, and most offer low minimums to get started. [su_highlight]Please note: I am not a professional financial adviser, and you should not rely on anything here to guide your own investment decisions.[/su_highlight] Consult a professional if you need help with your particular situation.
Real Estate Investing
Most of the dozens of real estate crowdfunding platforms that have popped up in recent years cater to accredited investors, but a handful do have offerings opening up crowdfunding for non-accredited investors:
- Fundrise. Using SEC Reg A+, Fundrise offers several “eREIT” products open to non-accredited investors, with a minimum investment of $1,000. Each eREIT invests in multiple properties, so you get a degree of diversification even at the minimum amount.
- RealtyMogul. Also utilizing Reg A+, RealtyMogul recently added what they call the MogulREIT, with an advertised return of 8% and also with a minimum investment amount of $1,000.
- Rich Uncles. The minimum investment amount is $500 (though you can increase that in $50 increments), with an advertised return of 7%. While they have set some minimum income or net worth requirements (some of which vary by state), they are significantly lower than the standards for being an accredited investor (for example, you may qualify to invest with an income of $70,000).
- GROUNDFLOOR. Of the real estate offerings open to non-accredited investors, Groundfloor is the most similar to the Reg D platforms, by offering debt investments in individual properties. The minimum investment amount can be as low as $10 for some of the properties, though Groundfloor is only available in some states (MA, MD, DC, VA, GA, IL, TX, WA, CA at the time of this writing).
- Gridshare. A niche platform offering Reg CF debt and equity investments in clean energy projects (like solar and wind installations), Gridshare is open to anyone, with a $100 minimum investment
- Holdfolio. Investors purchase a fractional ownership interest in a portfolio of 10 single-family rental properties (or a single apartment building), receiving both fixed interest payments and a profit-share upon sale or refinance.
Single Family Rentals
When investing with one of the platforms above, you’re buying some form of investment security, which gives you certain rights, but is not direct ownership of a property (ie, your name isn’t recorded on a deed anywhere). However, another way to invest in real estate has long been to of course just buy a single-family home and rent it out (known as “SFR” for Single Family Rental). And while it does require a fair amount of money for a down payment, you don’t need to be an accredited investor to buy a house. (And even if you live in an area with sky-high housing prices, if you buy your SFR in a low-cost market, the down payment can be much more manageable than it would be if you were investing nearby.)
So if you’re unaccredited but have a healthy savings pile and aren’t afraid of directly owning investment property, while it’s not exactly crowdfunding for non-accredited investors, there are now several online investment platforms that provide full-service SFR investing, from property selection to financing assistance to helping with inspections and finding property managers:
Startups and other Business Financing
Some of the lowest barriers to entry crowdfunding for non-accredited investors are in financing startups and small businesses, with some offerings having minimums as low as $10. We covered many of these in 5 of the Best Equity Crowdfunding Sites for Beginning Investors, and you can also read some tips for quickly reviewing investment choices in The One Underrated Skill Every Crowdfunding Investor Should Practice:
When you invest in P2P loans, you’re buying a portion of a promissory note, entitling you to a corresponding fraction of the principal and interest payments from the borrower until the loan is paid off. While it’s possible to start investing with as little as $25, in practice you need a lot more than that to get reasonable diversification, otherwise even one bad loan can wipe out the returns on a lot of good ones. But you can also ramp up over time using automated investing, so you can contribute, say, $25/week and build up a diversified portfolio over time:
- Lending Club
- LendingRobot. Not a P2P platform itself, LendingRobot automates and tracks investments across Prosper and LendingClub, and it’s free for the first $5,000 of principal managed)
Municipal bonds are a complex and opaque market, traditionally hard to access for regular investors. Neighborly aspires to change that, offering easier online access for individuals who want to invest in municipal bonds, which mean you can support investments in communities you care about while also realizing tax benefits.
State Exemptions allowing Crowdfunding for Non-Accredited Investors
As if crowdfunding for non-accredited investors wasn’t confusing enough already, at least 35 states also have some form of law permitting residents who are non-accredited investors to invest in crowdfunding of businesses located within the state. Check out our list of state-by-state investment limits for non-accredited investors for more details.