“There’s no such thing as truly passive income” – said everyone, ever.
I used to believe that was true.
Sure, I could invest in public (or private) equities, which are quite passive, particularly if you stick to low cost index funds.
But equities rely on value appreciation through earnings growth or multiple expansion. And the subset that provide current income (dividends) offer excessively low yields with limited tax sheltering.
Everything changed when I discovered private real estate syndications.
Real estate syndications offer 100% passive, tax-advantaged, current income. At the same time, these syndications have substantially outperformed the S&P 500. You don’t need to sacrifice high returns for current income.
Turns out you actually can have your cake, and eat it too.
This guide is for you if:
- You have more money than you do time.
- You have more money than you do real estate experience.
- You want to invest in real estate, but don’t want to fix toilets nor manage tenants.
- You’re sick of paying 40%+ tax on your hard earned income.
- You want more than the S&P 500’s 7% annual return.
Legal Disclaimer: I am not an attorney nor CPA. These are my opinions as an experienced investor. You should consult your CPA and/or attorney before making investment decisions.
What is a Real Estate Syndication?
In its simplest form, you should think of a real estate syndication like a venture-backed startup. Everything begins with a founder who has an idea and a vision. The founder raises capital from investors to fund his startup.
In a real estate syndication, the founder is the General Partner. His investors are the Limited Partners. Together, they pool capital and form a Syndicate, which purchases real estate.
A General Partner (the “GP” or the “Sponsor” or the “Syndicator”) can be an individual or a small team. His primary responsibilities are to:
- Source the deal
- Underwrite the deal
- Lineup financing (debt and equity)
- Establish the business plan
- Execute the business plan
A Limited Partner (the “LP”) is an investor in the deal. His primary responsibility is to provide capital – most often in the form of equity. Limited Partners play a very passive role in the transaction and have few, if any, operational responsibilities.
A Syndicate is the combined entity (GP+LP) purchasing the real estate.
Limited Partners are broadly classified as either an Accredited or Non-Accredited Investor.
An Accredited Investor is someone with a:
- Net Worth greater than $1 million, excluding his primary residence, OR income above $200K ($300K for married couples) for the past two tax years.
- Accredited Investors can participate in any kind of private real estate syndication, without limitation. This includes both 506(b) and 506(c) offerings, as outlined here by the SEC.
- Many General Partners will ask their Limited Partners to self-certify their accreditation status in writing. Others may require a third party verification through sites such as VerifyInvestor.com.
A Non-Accredited Investor is someone with a:
- Net Worth less than $1 million, excluding his primary residence, OR income below $200K ($300K for married couples) for the past two tax years.
- Non-Accredited Investors are unable to participate in the most common 506(c) syndications. They are instead limited to 506(b) offerings, which can have up to 35 non-accredited investors, regardless of the size of the deal.
- 506(b) offerings are less common and will require networking with your local investment communities to find. However, 506(b) deals can be just as good as other real estate syndications, so don’t be discouraged.
The widely accepted benefits of real estate investing — appreciation, leverage, tax sheltering, inflation-hedge, etc. — all still apply in a syndication.
However, by pooling together resources, a syndication enables all participants to acquire larger pieces of real estate. This has the following unique benefits:
1. Risk Mitigation
Say you own a $100,000 single-family home. If that home is not rented, you have no income. A few months of vacancy can quickly erase years of occupancy. Instead, say you place that same $100,000 into a syndication of a 50-unit apartment building. If 5 units are vacant you’re still receiving income (rent) from 45 units. The property’s occupancy is 90%.
Certain real estate syndications will invest as a fund, meaning investors will enjoy fractional ownership of multiple assets inside a single syndication. While administratively more complex, fund structures are rising in popularity as the added diversification serves to lower the overall risk of the fund.
3. Scale Efficiencies
There are meaningful cost savings at different levels of scale. For example, it is quite common to pay a third party property management company 10% or more of rental income. That’s a material line-item that greatly influences a property’s net operating income “NOI”, and therefore valuation. At greater scale, the syndicate will have the resources to hire a property manager in-house, often for an annual salary much lower than 10% of rental income.
4. Favorable Debt Terms
Given the lower risk profile, debt terms are often more attractive on larger deals. Additionally, debt is based on the property’s debt-service-coverage-ratio “DSCR“ rather than the borrower’s personal credit and income.
What are the unique advantages for key stakeholders?
For General Partners “Sponsors”:
Little Equity: It is not uncommon for a Sponsor to contribute 10% or less of the total equity into a deal, but retain full operational control. They source the deal and bring their operational experience to the table. Their compensation is most often aligned to the overall success of the deal. They only get paid when their investors get paid.
Huge Returns: Sponsors benefit from a waterfall fee schedule that rewards them for outperformance. They take on more personal and reputational risk in exchange for huge potential upside.
For Limited Partners “Investors”:
Passive Income: Sponsors retain full control and decision-making authority. LP’s do little work once an investment has been funded. Their only ongoing responsibilities are reading the regular deal updates from the Sponsor and working with their CPA’s to prepare their annual tax statements.
Limited Liability: LP’s have no direct exposure or liability risk in the transaction. The entity structure will shield them from actions of the Sponsor, hired vendors or other operational aspects of the project.
There is no absolute rule when it comes to the minimum an LP must contribute to a syndication.
Generally speaking, most Sponsors require a minimum of $50,000 to participate in the deal. There are deals with no minimums, but those are few and far between.
The larger the deal (and required equity check) the higher the minimum investment. Logically, the Sponsor needs to prioritize larger investors to ensure financing is lined up before the transaction is set to close.
💡 Pro Tip: For tax purposes, each syndication you invest in will issue at least one K1 tax form (perhaps more if you invest in a fund with multiple properties). Every CPA is different, but you should budget ~$100 per K1 in incremental CPA fees. This is irrelevant on a $50,000 investment, but may become meaningful at lower investment levels.
Every deal is unique and a combination of the following characteristics:
Commercial real estate deals are the most common and include multi-family, industrial, office space, mobile homes, storage and hospitality opportunities, to name a few. You may come across residential new development syndications as well, but those are less common.
Not every building or location is created equal. Properties are often categorized on an A –> C scale according to their condition. Neighborhoods are also categorized on a similar scale. Class A designation means the building or area is newer whereas a Class C designation means the area is quite rundown.
There is a difference between a single-asset syndication and a fund. A single-asset is self explanatory, you are investing in a single property or asset. A fund is different, you are contributing capital that is spread across several different properties and/or asset types.
The success or failure of a deal ultimately hinges on the Sponsor’s ability to execute a business plan.
What are common strategies used by Sponsors to create value?
Syndicate is acquiring an older building with the intention of investing capital to improve the condition of the property, raise rents, lower expenses and ultimately drive NOI.
Syndicate is acquiring an existing structure and repositioning the use of the asset (e.g. buying a vacant retail center and converting it into a storage facility).
Syndicate is acquiring a piece of land with nothing on it and adding physical structures to monetize the land.
Let’s start with a quick definition of the two types of investor distributions “returns”:
Operating Cashflow: cashflow generated from the property after debt servicing. These are regular monthly, quarterly or annual distributions to investors.
Liquidity Events: cashflow generated from refinancing or selling the property, after settling all outstanding debt and closing costs. These are irregular distributions to investors.
There are 3 return metrics you should care most about when evaluating a syndication:
1. Cash-on-Cash “CoC”
Annual figure that represents the operating cashflow you receive as an investor (after all management fees, operating expenses and interest has been paid) as a percent of the capital you invested in the deal. For example, if you invested $100,000 in a syndication and received $5,000 of operating cashflow in year 1, your cash-on-cash return is 5%.
Cash-on-cash returns will vary based on the asset type and business plan. For example, a new development project may distribute little to no cashflow in years 1-2. Instead, all cashflows are reinvested back into the property to accelerate the build process and provide downside protection if things don’t go according to plan. Once construction is complete and the property is leased, the syndicator will refinance or sell and distribute proceeds.
As a general rule of thumb (and certainly not creed), I like to see a blended CoC of at least 6% during the standard 5-year hold period. I am comfortable with a lower CoC earlier in the hold period if the business plan requires it.
Conversely, I am generally skeptical of a blended CoC return above 12%. Not to say that is impossible, but given the current tight spread between cap rates and interest rates, a 12% CoC return, particularly in year 1, would raise red flags.
💡 Pro Tip: a good syndicator will show the projected cash-on-cash return excluding capital events. A refinance or sale of the property is irrelevant for purposes of considering how much recurring income my investment is making as a percent of my capital outlay. If a syndicator is trying to add in a capital event and pitch a 15% CoC, run away.
2. Internal Rate of Return “IRR”
There are several ways to define IRR. To keep things simple, it’s the annual return (think Cumulative Annual Growth Rate “CAGR”) on an investment factoring in the time it takes to achieve that return.
The IRR of a project is greatly influenced by the hold period. It’s not uncommon to see huge IRRs if an asset is sold early in its hold period.
It’s important not to overweight the projected IRR on a deal. There are literally hundreds of assumptions that go into the underwriting that impact the IRR. That said, in today’s environment, projected IRRs will generally fall within a range of 12-18%. Again, this is not a hard rule, rather a general band that most deals will follow.
What’s most important as an investor is to compare the actual performance of an investment to the projected IRR included in the Offering Memorandum. A great Sponsor will always under promise and over deliver. Your job is to hold them accountable to their projections and allocate your capital to the Sponsors who consistently outperform expectations.
3. Multiple of Money “MoM”
This is the total capital you receive back (operating cashflow + capital events) divided by the initial capital you invested in the deal. This may also be referred to as the deal’s “Equity Multiple”.
Assuming the standard 5-year hold, I like to see a MoM above 2.0x, which means if I invest $100K into the deal I should expect to receive $200K back (2.0x my investment), over the course of 5 years (recognizing the majority of the $200K will be received following a capital event, such as the sale).
This ratio is particularly relevant when put into context of the deal’s IRR, since it is not a time-bound metric. In other words, if a syndication is sold after just 2 years of operating, you may expect a high IRR (e.g. 30%+) but the MoM may be less compelling (e.g. 1.5x). Still a great outcome, but you may prefer a longer hold period, lower IRR and higher MoM.
What fees do investors incur?
There are 3 common management fees you are responsible for as an LP in a real estate syndication.
1. Acquisition Fees
These are often ~1-2% of the assets purchase price and compensate the Sponsor for sourcing and closing a deal.
2. Asset Management Fees
These are often up to 5% of the gross rental income and compensate the Sponsor for managing the day-to-day operations of the asset.
3. Liquidity Event Fees
These are often ~1-2% of the sale or refinance proceeds and compensate the Sponsor for overseeing the transaction.
On the surface these fees may seem excessive, but ultimately they are not. They are meant to cover the day-to-day costs of running a real estate fund — payroll, overhead, data costs, etc. No Sponsor is getting rich off these fees. What is much more important is the waterfall structure, or the split of profits between the GPs and LPs.
A good real estate syndication is structured to align the interests of the Sponsor (GPs) and his investors (LPs).
As such, the vast majority of syndications have what’s called a waterfall structure. If you are familiar with carried interest, a waterfall schedule is very similar — it defines a minimum return investors will receive “Preferred Return” and the split of profits that are due to the Sponsor if he/she delivers a return above that rate.
The core elements of a waterfall schedule that you should understand are:
This is the guaranteed return the Sponsor is giving to his Limited Partners. In a real estate syndication, this return almost always falls between 6% and 8%.
In other words, the Sponsor guarantees you as an investor will earn at least 6-8% from the investment, and if you do not, the Sponsor essentially earns nothing (with the exception of the asset management fees).
If a deal is successful, there will be cashflow to distribute beyond the preferred return. The outperformance is shared with the Sponsor based on an agreed upon split.
A common split is 70/30. This means that for every dollar that’s generated after (a) initial capital has been returned and (b) the preferred return has been hit, 70 cents of that dollar is kept by the investors and 30 cents is kept by the Sponsor.
As a general rule, the most friendly Sponsors will often use an 80/20 split with no additional tiers. I’ve seen some Sponsors have as many as three tiers above the Preferred Return and will split the profits 50/50 at high return thresholds (eg. >30% IRR).
It’s important to acknowledge that waterfall schedules can be quite complex and vary tremendously across syndicators. The devil is in the details. I would not get too caught up in the nuances, especially if you trust the Sponsor and he/she has a proven track record of delivering strong returns to investors.
As an LP you own a piece of the real estate, even though you have no operational responsibilities. As such you enjoy the same tax benefits as a direct owner would. Let’s cover the primary advantages here:
Arguably the most powerful advantage of investing in real estate is the ability to take non-cash losses and to offset taxable cashflow. It is quite common for the annual depreciation on a property to fully offset the property’s operating cashflows. As a result, LPs may not pay any tax on the distributions they receive each year.
Cost Segregation Studies
Sponsors who know what they are doing will take depreciation one step further. They will run a Cost Segregation Study, which is essentially an engineering report that allocates a commercial building to 5, 15 and 27.5 year property. This study, when combined with Bonus Depreciation, unlocks significant tax savings in the year the property is acquired (or more technically, placed into service). These paper losses may shield your passive income for the life of the investment.
Curious to learn more, check out: The Single Best Tax Saving Strategy for High Income Earners
💡 Pro Tip: you may be expected to pay up to 25% in depreciation recapture tax when a property is sold, assuming all proceeds are returned to LPs and the syndicator does not 1031 into another asset. There are multiple ways to delay this recapture tax, including investing in another syndication in the same year. A good CPA should understand and help you navigate those strategies.
How are Limited Partner distributions taxed?
Income received from real estate syndications may be taxed as Ordinary Income, Long-term Capital Gain Income, or not taxed at all. A good Sponsor will be intimately familiar with the details and structure distributions to optimize the tax impact.
For those who want more detail, let’s look at how the two kinds of cash distributions are taxed:
1. Operating Cashflows
Real estate syndications are almost always structured as Partnerships.
Income from partnerships are not taxed at the entity-level, meaning all profits and losses flow directly to the owners of the entity based on their pro rata ownership.
In other words, you will report your share of the taxable income (or loss) generated from the property on your personal tax return.
To be clear: taxable income is not the same thing as operating cashflow.
Taxable income is often less than operating cashflow, thanks to depreciation.
However, if the operating cashflow exceeds the depreciation on the property, then you might have to pay tax on the income you receive.
This income is considered Passive Income. You will owe tax based on your Ordinary Income tax bracket. And since you are an LP, not actively participating in the management of the syndication, you do not have to pay FICA (Medicare & Social Security) taxes on that income (the Sponsor will have to pay FICA taxes on their income).
2. Liquidity Events
Income received from liquidity events are treated differently than income received from the day-to-day operations of the property.
There are two common liquidity events:
Selling: Distributions received from the sale of the property are treated as long-term capital gains. Long-term capital gains have more favorable tax rates between 0 and 20%, depending on your specific tax bracket.
Refinancing: Occasionally a Sponsor may choose to refinance the debt on a property based on a higher valuation than what the property was purchased for originally. In this scenario, excess cash may be distributed to investors.
Without diving too deep into commercial property valuation, a refinancing is basically a way for syndicators to return capital without having to sell the property.
Proceeds from debt issuance are not taxable. Therefore distributions sent to investors from a refinancing are not taxable.
This is a core input to the Buy, Borrow, Die Strategy I’ve written about in depth.
💡 Pro Tip: Return of capital is not taxable. In other words, if you invest $100,000 into a syndication, the first $100,000 you receive back from that syndicator may be considered a return of capital. A savvy Sponsor understands this and will work with the right CPA to thoughtfully categorize early distributions as “returns of capital”. **
How to Invest in Real Estate Syndications
Now that we’ve covered everything you could possibly want to know and more about what a real estate syndication is, it’s time to show you how to find and invest in one.
Finding the Deal
It may be surprising to you, but there are literally thousands of great real estate syndicators out there, you just need to know where to look.
In general, syndicators fall into one of three buckets:
Online Crowdfunding Sites
Crowdfunding sites that allow you to own fractional shares of real estate by investing directly through their website. You don’t need a pre-existing relationship with the site and you can often find all the information you’d need to make an investment decision without ever speaking to a human being.
- Easy to Find
- Transparent Deal Information and Historical Returns
- Many Accept Small Minimum Investments
- High Fees
- Potentially Lower Returns
- No Human-to-Human Relationship (perhaps a Pro to some)
- Limited History
Heavily Marketed Private Funds
Private syndicators who aggressively market their funds through online platforms. A simple google search for real estate syndicators will surface many of them quickly. However, they do not publicly release their deal flow and you may need to speak with a representative before they add you to their mailing list. Most opportunities they will market require you to be an Accredited Investor, but some may have 506(b) opportunities available.
- Relatively Easy to Find
- Potentially Better Deals
- High Fees
- Less Transparency (and Accountability)
- Less Human-to-Human Relationship
Discreet Private Funds
Private syndicators who have enjoyed so much success they don’t need to market their funds to the public. Their deals are oversubscribed days after releasing to their investor list. I would strongly recommend focusing on this group, even if it’s a bit more work in the beginning.
- The Best Deals
- Proven Track Record (the best have never lost investor capital)
- Investor-Friendly Fee Structures (and fair mgmt. fees)
- Difficult to Find
- Potentially Higher Investment Minimums
- Limited to Accredited Investors
The Investment Process From A to Z
Now that we’ve covered what real estate syndications are, why you should care and how to find them, let’s walk through the full investing process.
Step 1: Review the Offering Memorandum “OM”
The very first document a syndicator will share with potential LPs is the Offering Memorandum “OM” (also referred to as the “Investment Summary”).
A strong Offering Memorandum should include:
The deal’s investment highlights and projected returns. Remember, this is ultimately a marketing document, so take everything with a grain of salt. You want to be thinking about the downsides (or gotchas) that the syndicator may not be proactively disclosing.
Most experienced syndicators will lead with their current portfolio and operational background. They may also include relevant cast studies.
The asset’s location, class, unit count, square footage, build year, unit mix, etc.
The in-place condition of the asset as well as renderings or illustrations of the changes that will be made to enhance the property’s value.
An aerial shot that includes the specific location of the property in relation to major retail outlets, freeways, employers, etc.
A detailed look at the sub-market including data on population growth, employment growth, new job creation, historical and projected rent growth and vacancy, etc.
Sources & Uses
An overview of the major funding sources (GP equity, LP equity, debt) and their uses (Purchase Price, Renovation Budget, Closing Costs, Reserves)
The exact strategy to create shareholder value. For traditional multi-family, value-add deals, this may include a snap shot of the in-place rent v. post-renovation rent. Often times their will be both a written description of the strategy and a few numbers to quantify the opportunity.
Rent and Sale Comparables
Charts that compare the in-place rent and renovated rent projections to nearby competitors. Same comparison, but for similar property sales in the sub-market.
A thorough disclosure of all key assumptions that underpin their underwriting and return projections. At a minimum, the sponsor should include rent growth assumptions, vacancy and bad debt expense, operating expenses like taxes, insurance and payroll, debt terms and exit cap rate.
Relevant return metrics in addition to what that means for you as an LP. It’s quite common for syndicators to include a hypothetical $100K investment and show the expected cash distributions by year. This section should include the key return metrics: CoC, IRR and MoM.
A clear summary of the various management fees associated with the deal. If management fees are not disclosed anywhere in the OM, that is a red flag.
A basic timeline that includes, at a minimum, when written LP commitments are expected, when LP funds will be due and when the deal will close.
💡 Pro Tip: the best syndicators will also include a slide on the deal’s biggest risks. I love when syndicators do this. I like to know they are thinking through potential downsides and finding ways to proactively mitigate them.
Step 2: Compile a List of Diligence Questions
This step is so important and many LPs fail to take this seriously. Compiling a concentrated list of key questions:
(1) establishes your credibility as an LP that knows what they are doing, and
(2) gives you a peak into the Sponsor’s attention to detail (or lack thereof).
Does the Sponsor’s CEO reply to your questions, or are they outsourced to the IR guy? Does the reply address every question thoroughly, or does it pick and choose which to go deep on? Do you receive a reply at all?
Here are some Ideas to get you started:
How did the Sponsor find this deal? Why is the seller selling?
Does the Sponsor have experience in this specific sub-market? Have they taken deals in this market full cycle – buy, execute and sell?
What is the property’s in-place cap rate and how does that compare to their assumed exit cap rate? If the the cap rate assumed at exit is equal to, or lower than, the in-place cap rate, that’s probably too aggressive.
What are they forecasting for annual rent growth? Compare their forecasted growth to the historical growth rate in that specific sub-market. If they are assuming accelerating rent growth you should ask why.
For value-add deals, is the renovation budget adequate (or inflated)? Does it justify the projected rent growth they are expecting? For new development deals, what is the future supply in the sub-market? Has the sponsor worked with the specific contractor on a previously successful deal?
Is the interest rate locked? If the debt is floating, how might higher interest rates in the future impact their projections? If the debt is fixed, what is the pre-payment penalty and how might that impact returns?
Are there multiple exit strategies? If market conditions don’t allow for a sale at the end of the hold period, what is the backup plan(s)?
Skin in the Game
How much equity is the Sponsor contributing to the deal? Is it significantly more than the acquisition fee they earn once the deal closes?
💡 Pro Tip: I recommend compiling all of your questions into a single email. Take a bit of extra time if you need to, but there’s no reason to rush this process. Be thorough. It’s also quite common to have 2-3 back and forths with the sponsor on a single email thread. You want to invest behind sponsors who actively engage with their LPs and who are both timely and thorough in their written (and verbal) communication.
Step 3: Provide a Written “Soft” Commitment
At this point you have completed your diligence and you are comfortable contributing a specific amount of money to the deal. Write a brief email to the Sponsor stating your interest at $[X] level. If you are interested in participating, but at a threshold below the investment minimum, you should ask the Sponsor if there is flexibility, particularly if it is your first investment with them. The majority of Sponsors will make an exception. Ultimately this is a relationship business, not a one-time transaction.
Step 4: Review and Execute Legal Docs
Once a soft commitment is made and the Sponsor confirms your investment, they will share the Operating Agreement, a legal document outlining the parameters of the partnership. It breaks down the role of the GPs and LPs, explaining who is responsible for what decisions. The Operating Agreement also covers management fees and profit share. At this point, depending on your comfort level and the size of your investment, you may consider consulting an attorney. Doing so is by no means necessary, but may provide you with added confidence, particularly if this is your first time working with the Sponsor.
Step 5: Wire the Money
Once the legal documents are signed, the Sponsor will send instructions for remitting your committed funds. Once the funds are sent and the Sponsor confirms receipt, there’s nothing left for you to do. Congratulations, your money is officially working for you!
After the Investment is Funded
During the hold period you should expect quarterly (or even monthly) updates on the deal. You should also expect a more thorough annual recap.
These updates vary greatly from Sponsor to Sponsor, but should provide an overview of how the business plan is progressing and what (if any) distributions you can expect that period. The best Sponsors will also provide an update on performance relative to their initial forecast.
I strongly recommend putting a process in place after your investment is funded to monitor performance – particularly if the Sponsor you’ve invested with does not provide the best updates.
Here’s the exact playbook I recommend:
Step 1: Record the investment’s critical details in a spreadsheet
At a minimum, this should include basic deal info and projected returns, including expected distributions by year. I would also recommend capturing the assumed rent growth by year (net of vacancy and bad debt) and assumed exit cap rate. There’s no such thing as logging too much info.
Step 2: Read every investor update in detail!
If the Sponsor fails to address all your questions proactively, then send him an email.
Good questions to ask a Sponsor after a regular update:
- How are rents progressing relative to your initial underwriting?
- How have debt markets changed in the past [x] months and how will that affect returns?
- What are the biggest challenges you are facing that you didn’t expect going into the deal?
- Are you still on pace to achieve the projected return metrics — CoC, IRR, and MoM? If not, what has changed?
Even if the Sponsor’s regular updates are quite rigorous and answer all of your questions, I would still recommend emailing (or calling) the Sponsor every 6 months. You will likely learn quite a bit about the market in general during those updates and you can use that knowledge to help inform your investing strategy moving forward.
How much money do I need to invest in real estate syndications?
Anyone can invest in a real estate syndication. Many syndications will have a minimum investment amount of approximately $50,000. However, smaller deals may accept checks for much lower amounts. You must be an Accredited Investor to invest in the majority of syndications; however, Non-Accredited Investors may be able to invest in 506(b) syndications.
What money sources can be used to invest in real estate syndications?
You can invest in real estate syndications using many different capital sources including cash on hand and retirement accounts. You can use retirement funds within a self-directed IRA to invest in a syndication. However, all expenses associated with the investment must be paid using the funds in your IRA account. All revenue also must go back to the IRA account.
Can an LLC invest in real estate syndications?
Yes, though the primary benefit (liability protection) of an LLC is irrelevant for Limited Partners investing in real estate syndications. Limited Partners have no personal liability for any decisions made by the syndicate nor anyone involved in the day-to-day operations of the property.
Can a business be considered an Accredited Investor?
Yes, businesses such as LLC’s can also be considered Accredited and can invest in securities offerings, but must have assets in excess of $5 million.