Accredited Investor

Feb 13, 2023

Accredited Investor

A U.S. investor whose net worth of assets exceeds $1 million excluding the value of their primary residence.

What is an accredited investor?

The U.S. Securities and Exchange Commission (SEC) defines an accredited investor as an individual or entity that meets certain financial thresholds. Specifically, an accredited investor is someone who has earned income that exceeds $200,000 in each of the two most recent years (or $300,000 combined income with their spouse) and expects the same for the current year or has a net worth of at least $1 million, excluding their primary residence.

Why does this matter when it comes to investing?

The SEC requires that certain investments be offered only to accredited investors, in part because these individuals are considered to be more financially sophisticated and better able to assess the risks and potential rewards of these investments. Additionally, these investments often involve higher minimum investment amounts, and the SEC wants to ensure that investors who participate in these offerings have the financial means to withstand any potential losses.

One area where this distinction is particularly relevant is in real estate investing. Many real estate investments, such as private real estate funds, private real estate investment trusts (REITs), and certain types of real estate crowdfunding may be limited to accredited investors. This can be frustrating for non-accredited investors who may be interested in these opportunities but are unable to participate due to SEC regulations.

For example

Let's say there's a private real estate fund that requires a minimum investment of $500,000 and promises a high potential return on investment. Only accredited investors would be able to participate in this fund, which means non-accredited investors would miss out on the potential returns. Several real estate crowdfunding platforms allow both accredited and non-accredited investors to participate, the minimum investment amount may be lower, and the goal is for the potential returns to remain equally attractive.

Benefits of being an accredited investor

One potential benefit of being an accredited investor is that it can provide access to investment opportunities that are not available to the general public. For example, a private real estate fund may offer a higher potential return on investment than publicly-traded REITs, which are available to anyone. Additionally, accredited investors may be able to negotiate better terms and fees, given their financial means and investment experience. However, it's important to note that being an accredited investor does not guarantee investment success. Just because someone meets the SEC's financial thresholds does not mean they are immune to losses or bad investment decisions. It's still essential to conduct thorough due diligence and understand the risks associated with any investment opportunity.

The distinction between accredited and non-accredited investors is essential for anyone interested in investing

Accredited investors have access to certain investment opportunities that non-accredited investors do not, and they may also have more negotiating power and better terms. However, it's important to remember that being an accredited investor does not guarantee investment success, and all investors should conduct due diligence and assess the risks before making any investment decision.

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Landa Holdings, Inc. ("Landa Holdings") operates the www.landa.app website (the "Site") and the Landa mobile application (the "App")(collectively, the “Platform”). Landa Holdings manages Landa App LLC, Landa App 2 LLC and Landa App 3 LLC (“Landa Issuers”), and raises funds and facilitates the issuance of shares for the Landa Issuers entities through the Platform pursuant to Regulation A under the Securities Act of 1933 (“Regulation A”).

Neither Landa Holdings nor any of its affiliates are a registered broker-dealer or investment advisor. All securities-related activity for the Landa Entities is conducted through Dalmore Group LLC (“Dalmore”), a registered broker-dealer and member of FINRA/SIPC, You can review Dalmore's brokercheck for Dalmore. Banking services are provided by Evolve Bank & Trust, Member FDIC. By opening a custody account on the Platform, you agree to Evolve Bank & Trust’s Custodial Agreement.

Further, Landa Management LLC, a wholly-owned subsidiary of Landa Holdings, manages Landa Financing LLC (“Landa Financing”), and raises funds and facilitates the issuance of shares for Landa Financing through the Platform pursuant to Regulation A. All securities-related activity for Landa Financing is conducted through Rialto Markets LLC (“Rialto”), a registered broker-dealer and member of FINRA/SIPC (for more information on Rialto, review Rialto’s brokercheck for Rialto.

You should speak with your financial advisor, accountant, and/or attorney when evaluating any offering of securities. Neither Landa Holdings, Landa App, nor Dalmore makes any recommendations or provides advice about investments, and no communication, through this website or in any other medium, should be construed as a recommendation for any security offered on or off this investment platform. Nothing in this material should be construed as investment or tax advice, or a solicitation or offer, or a recommendation to buy or sell any securities. The Site and/or the App may make forward-looking statements. You should not rely on these statements but should carefully evaluate the offering materials in assessing any investment opportunity, including the complete set of risk factors that are provided as part of the offering circular for your consideration. We urge you to review the applicable offering circular, available here.

All securities offered by the Landa Entities and Landa Financing are deemed “Shares”. Investing in Shares involves risks, and there is always the potential of losing money when you invest in Shares. Past performance is no guarantee of future results. Investments in Shares are speculative and involve substantial risks to consider before investing, outlined in the respective offering materials and including, but not limited to, illiquidity, lack of diversification, and complete loss of capital. An investment in Shares constitutes only an investment in a particular offering and not in Landa Holdings, Landa App, or any of the underlying asset(s). Investors should carefully review the risks located in the respective offering materials for a more comprehensive discussion of risks.

No money or other consideration will be solicited (and if sent, will not be accepted), and no offer to buy Shares of a particular offering can be accepted, and no part of the purchase price can be received until an offering statement filed with the Securities and Exchange Commission (the "SEC") relating to those Shares has been qualified by the SEC. Any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of acceptance given after the date of qualification by the SEC. An indication of interest involves no obligation or commitment of any kind.

Investment overviews contained on the Platform contain summaries intended for informational purposes only and are not complete. For detailed information, we urge you to refer to the applicable offering circular filed with the SEC. Neither Landa Holdings nor any of its affiliates offers refunds after an investment has been made.

You should speak with your financial advisor, accountant, and/or attorney when evaluating any Shares. None of Landa Holdings or its affiliates, Dalmore, or Rialto makes any recommendations or provides advice about Shares, and no communication, through this website or in any other medium, should be construed as a recommendation or investment advice. Nothing on the Platform should be construed as investment or tax advice, or a solicitation or offer, or a recommendation to buy or sell any securities.The Platform may make forward-looking statements. You should not rely on these statements but should carefully evaluate the offering materials in assessing any investment opportunity, including the complete set of risk factors that are provided as part of the offering circular for your consideration. We urge you to review the applicable offering circular, available here.

All Shares will be issued in electronic form only and will not be listed or quoted on any securities exchange. After a Series’ offering has concluded, we expect that the Public Private Execution Network Alternative Trading System, or PPEX ATS (the “Secondary Trading Platform”), which is registered with the SEC and operated by North Capital Private Securities Corporation (“North Capital”), will be the only venue available for the resale of Shares. Resales of Shares will be conducted by Dalmore, as a broker-dealer member of the Secondary Trading Platform; provided, however, any such resale of Shares will be subject to federal and state securities laws and the restrictions in the Series’ Operating Agreement, and there can be no assurance that an active market for any Shares will develop on the Secondary Trading Platform, that the Secondary Trading Platform will be available to allow resales of Shares to residents of all states, or that the Secondary Trading Platform will be available at all. For these reasons, investors must be prepared to hold their Shares indefinitely.

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