As an accredited investor, you gain more high-quality opportunities when it comes to private real estate investing. That said, individuals who are non-accredited investors can still take advantage of some direct real estate investments and the benefits they offer as eligible investors.
Parvis offers a variety of real estate investment opportunities for qualified investors who meet accredited or eligible investor status.
In this article we’ll dive into the following:
- The difference between accredited vs. non-accredited investors
- Eligible investors: qualification requirements and rules
- Accredited and eligible investor opportunity: Upper Mayfield Estates
- The road to becoming an accredited investor
Let's get started.
What is a non-accredited investor in Canada?
As an accredited investor, you can trade securities that are not registered with financial authorities without a cap on the amount of funds you can invest. To be considered an accredited investor in Canada, you must meet any of the following eligibility requirements:
- At least $1 million in financial assets (cash and securities) before taxes. When calculating an individual’s financial assets any outstanding loans incurred to acquire those assets must be deducted.
- A before-tax net income of $200,000 (or $300,000 combined income with spouse) in the two most recent years, and who reasonably expects to exceed that net income in the current year.
- Have at least $5 million in net assets.
So, a non-accredited investor is just an investor that doesn’t qualify for accredited investor status, right? That’s true, but there’s more to it. Unlike in the US, some provinces in Canada break down non-accredited investors even further into eligible investors and ineligible investors.
- Eligible Investors: Just like accredited investors, to be considered an eligible investor you must meet certain financial requirements (outlined below). Eligible investors that meet those requirements can invest more into investment opportunities subject to a prospectus exemption.
- Ineligible Investors: Investors that don’t meet the qualification requirements of an eligible investor are considered ineligible (also called non-eligible) investors. The amount of funds they are able to put into investment opportunities subject to a prospectus exemption are more limited as compared to eligible investors.
To make it even more clear for you, the chart below outlines the differences between accredited investors and eligible investors when it comes to qualification requirements and investment limits.
Capital Raising Prospectus Exemptions
What is an eligible investor in Canada?
Companies aiming to offer securities to the public in order to raise capital are required to file a prospectus ––a document that goes into great detail about the securities offered and the company offering them. However, companies can avoid writing a prospectus through “prospectus exemptions”.
Offering memorandum (OM) prospectus exemption:
Instead of a prospectus, companies can provide an offering memorandum––a less detailed legal document than a prospectus. Under an offering memorandum exemption, anyone can purchase securities, however, there are limits to the amount that can be purchased that will vary depending on whether an investor is an eligible or ineligible investor.
Eligible Investors
To qualify as an eligible investor you must have the following:
- Net assets (or combined with your spouse) greater than $400,000.
- A before-tax income of over $75,000 (or $125,000 combined income with your spouse) for at least two years in a row with the expectation to exceed that income in the current calendar year.
Under the offering memorandum exemption, for over a twelve-month period, eligible investors can put a maximum of $30,000 into investments subject to the OM exemption, unless they receive advice from a portfolio manager, investment dealer, or exempt market dealer, in which case they can invest up to $100,000.
Examples of investments available to eligible investors include:
- Direct real estate investments
- Equity investments
- Debt investments
At Parvis, we offer a wide range of high-quality direct real estate investment opportunities for accredited and eligible investors ––our latest being Upper Mayfield Estates. Let's take a look at what it has to offer investors.
Property Spotlight: Upper Mayfield Estates
Upper Mayfield Estates is a community development consisting of 48 townhomes and 103 single detached homes in the rapidly-growing market of North Brampton, Ontario. The development is slated for completion in 2025 by the highly reputable Caliber Homes team.
Here's what makes Upper Mayfield Estates such a strong investment opportunity for accredited and eligible investors:
Strong Returns & Moderate Risk
Upper Mayfield Estates is a premium residential project with a projected return of 26.82%, and the project includes risk mitigation via personal and corporate guarantees. With completion slated for 2025, this project is attractive for investors looking for the potential of a strong return in a relatively short period of time.
Investing in the Upper Mayfield Estates project also has the benefit of being TFSA and RRSP eligible which will allow investors to maximize their savings.
Fastest Growing Municipality in the GTA
Over the last few years, Brampton, Ontario has experienced rapid growth and high demand for low-rise, single-family homes, with sales of new single houses up 75% since March 2021.
Upper Mayfield Estates is well-located in a master-planned North Brampton community, in close proximity to the following:
- Schools
- Major retail and commercial infrastructure
- Major highways
- Parks
- Trails
- A scenic ravine
Award Winning Developer: Caliber Homes
Investors can be confident that their investment in Upper Mayfield Estates has a strong developer at the helm. Caliber Homes has been committed to delivering beautiful, high-quality homes across the GTA since 2004, winning two Home Builder awards since then. Over the past 18 years, Caliber Homes has completed over 1000 homes with the gross value of their completed projects standing at $365 million (CAD).
Interested in an opportunity to invest in Upper Mayfield Estates? Sign up to the Parvis platform to learn more about the project and invest today.
The road to becoming an accredited investor
Attaining accredited investor status can help open up a number of investment opportunities not available to non-accredited investors. The good news is that if you already qualify as an eligible investor, you're well on your way to becoming accredited.
Here are a few tips that can help you earn accredited investor status sooner:
- Continue to make smart investment decisions.
- Diversify your portfolio with direct real estate investment opportunities and varying investment strategies.
- Continue to grow in your career to meet income requirements.
- Work to eliminate debt associated with assets (e.g mortgage).
Once accredited investor status is achieved, you gain numerous benefits that will help you build more wealth.
These benefits include:
Access to more investment opportunities: As an accredited investor you can build your wealth through lucrative private market investments that are unavailable to retail investors. Unlike non-accredited investors, there is no limit to the amount of funds you can invest in these private market opportunities.
Higher returns: Certain high-risk, high-reward investments are only available to accredited investors, due to their financial qualifications that allow them to take on said risk.
Increased diversification: The ability to invest in both public and private markets adds another layer of diversification for accredited investors to help mitigate risk.
Invest with Parvis
With Parvis, accredited investors and eligible investors can take their real estate investing to the next level with direct investing opportunities that offer higher returns compared to REITs and increased diversification.
Interested in exploring more investment opportunities like Upper Mayfield Estates? Connect with our investor relations team to see all the opportunities and investment strategies available to you as a qualified investor.
