#1 Reason Healthcare Professionals Are Missing Out Great Real Estate Deals
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Most real estate deals are private, and exclusively available to sophisticated or accredited investors. By reading this article, you can learn how to become a sophisticated or accredited investor yourself.
The number one reason why majority of Healthcare Professionals are missing out on Real Estate Deals is because of this
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PRIVATE OFFERINGS
In the U.S., the Securities and Exchange Commission (SEC) defines rules under which a company may make PRIVATE OFFERINGS available in Regulation D. These rules include classifications for sophisticated and accredited investors.
In Rule 506(b) of Regulation D, for example, PRIVATE OFFERINGS are restricted to an UNLIMITED number of accredited investors and a LIMITED number of non-accredited sophisticated investors, defined as those investors with sufficient knowledge and experience in financial and business matters to make them capable of evaluating the merits and risks of the prospective investment.
(No wonder we never get any piece of the real estate actions)
ACCREDITED AND SOPHISTICATED Investors Explained:
ACCREDITED INVESTOR:
An accredited investor is an individual or entity that meets specific financial criteria set by the SEC, such as having a net worth of over $1 million (excluding primary residence) or an annual income exceeding $200,000 ($300,000 for joint income) for the last two years. To become an accredited investor, you must meet these financial thresholds or possess certain professional certifications, designations, or credentials recognized by the SEC.
SOPHISTICATED INVESTOR:
As mentioned earlier, a sophisticated investor is someone who has sufficient knowledge, experience, and understanding of financial and business matters to evaluate the risks and merits of an investment. Unlike accredited investors, there are no specific financial thresholds to meet; instead, sophisticated investors are recognized based on their ability to make informed investment decisions. This status is typically assessed by the issuer of the investment opportunity.
So how do we, Healthcare Professionals, become either one?
Becoming an ACCREDITED INVESTOR is a straightforward process. If you have a high net worth or a substantial annual income, you are readily qualified, provided you meet the financial criteria established by the SEC. (no wonder we don't get the deals those one percenters do).
Becoming a SOPHISTICATED INVESTOR on the other hand, is a more nuanced process. While there are various pathways to achieve this status, one effective approach is to join a real estate group such as Investors on Scrubs to pursue education in the field, deepen your understanding of the business, expand your professional network, and collaborate with experienced investors on deals to mitigate your risk as well as build your portfolio and expertise.
