An accredited investor is someone that has the ability to evaluate investment opportunities presented by individuals or companies without those companies having to register the offering with the SEC and all that goes with such a filing. Individuals that seek out funds to acquire, expand or even for 3 things accredited investors must knowstartup funds look to accredited investors as a more efficient way to capitalize current and future projects

. If you’re an accredited investor and you’ve been approached to invest in an upcoming real estate opportunity, there are three things you absolutely must know.

1: Know Your Exit. Your funds will be tied up in the project until your participation is no longer needed. For a real estate investment, that could be the acquisition and rehabilitation of a large single family home converted into a multi-unit apartment building.  If the property is to be flipped, be convinced there is a market for such a project. Are there similar properties in the area that are currently performing? Is there an existing demand and will the demand still be there once the project is complete? Or will you continue to one of the owners who watch the property grow in value along with positive monthly cash flow each month? However the ending, be thoroughly convinced of the outcome. Don’t rely just on the presentation, validate the proposal with third parties.

2: Know Your Management Team. There’s a huge difference between helping finance a startup and providing funds to an ongoing concern. If you’re an angel you know there’s going to be a greater risk because in the beginning the proposal you’re considering may be nothing more than solid theory but yet to provide returns in the real world. On the other hand, a company with years of experience, references and a proven business model will make your decision to participate more comfortable and most assured.

3: Know Your Goals. Your financial planner and tax advisers need to be in on your decisions. You want solid, independent advice but you also want to be certain that providing funds for a new project won’t pull financing from other opportunities or hold your liquidity to levels at which you’re not quite comfortable. A project may look perfect but perhaps the timing just isn’t right.