Access to the local MLS to find more investment opportunities. Research and monitor the current economic trends such as consumer spending, job and population growth, and development for each market being invested in.
So far, we’ve discussed accredited investor requirements for individuals. However, certain entities can claim accredited investor status as well.
Fair market property values and whether they are trending up or down. As mentioned above, the net worth requirement to claim accredited investor status excludes primary residence. The only exception to this rule applies if you have an underwater mortgage or a home equity line of credit.
Regarding that last bullet point, an investor holding FINRA’s Series 7, Series 65 or Series 82 designations qualifies as an accredited investor. Firms selling unregistered products engage in their own screening process to verify an individual’s accredited investor status. In order to understand or even justify these rules, you must understand the definition of an accredited investor and what he or she can do. Can you imagine an investment consultant telling clients, year after year, to keep adding to an index fund replicating the S&P 500? Large fees flow to these hyper-helpers, however, if they recommend small managerial shifts every year or so. That advice is often delivered in esoteric gibberish that explains why fashionable investment “styles” or current economic trends make the shift appropriate.
Choose an investment strategy and niche to accomplish short- and long-term goals. Market rents to let you know what the true income potential of a property is and if it will be cash flow positive.
Focus on the future productivity of the asset you are considering. If you don’t feel comfortable making a rough estimate of the asset’s future earnings, just forget it and move on. No one has the ability to evaluate every investment possibility. But omniscience isn’t necessary; you only need to understand the actions you undertake.