If you’re exploring real estate investment opportunities, you may have come across references to Regulation D, Rule 506(c) — especially when evaluating passive investments like real estate syndications or funds. But what does this rule actually mean? And why should accredited investors care?
In this post, we’ll break down what Rule 506(c) is, how it applies to modern real estate investing, and what recent SEC guidance means for you as an investor.
1. What Is Regulation D, Rule 506(c)?
Rule 506(c) is part of Regulation D, a framework created by the SEC to allow companies and investment sponsors to raise private capital legally. What makes Rule 506(c) unique is that it allows sponsors to publicly advertise investment opportunities — as long as they take reasonable steps to verify that all investors are accredited.
Here’s the key:
Rule 506(c) balances access and protection. Investors get visibility into more opportunities, and sponsors stay compliant by ensuring every participant is qualified.
2. Why Rule 506(c) Matters for Real Estate Investments
Historically, most private real estate deals were limited to people with pre-existing relationships under Rule 506(b), which prohibited public promotion. Rule 506(c) changed that — allowing sponsors to share opportunities more openly and giving accredited investors broader access to high-quality deals.
Keep in mind:
This shift empowers individual investors to evaluate and participate in institutional-style real estate opportunities they may not have seen otherwise.
3. What It Means to Be an Accredited Investor
To participate in a Rule 506(c) investment, you must meet the SEC’s definition of an accredited investor. You qualify if you meet at least one of the following:
- Earned over $200,000 individually (or $300,000 jointly with a spouse) in each of the last two years and expect to earn the same or more this year
- Have a net worth of over $1 million, excluding your primary residence
- Hold certain professional certifications or licenses (such as Series 7, 65, or 82)
Worth knowing:
You don’t always need extensive documentation to prove this — the SEC has recently expanded the acceptable methods for verification, especially for larger investments.
4. How Verification Works (and What Just Changed)
One of the most important components of Rule 506(c) is the requirement that sponsors take “reasonable steps” to verify investor status. While traditional documentation is still valid, SEC guidance issued in March 2025 has introduced a more flexible approach.
Here’s how it works now:
- If the minimum investment is at least $200,000 for individuals (or $1 million for entities), and the investor provides a signed written statement confirming their accredited status, that may be sufficient for verification
- Sponsors still have the discretion to determine whether this qualifies as a “reasonable step” under the rule
- More traditional methods — like providing tax returns, a personal financial statement, or a letter from a CPA or attorney — are still acceptable and commonly used
- Third-party services may also facilitate verification through secure and streamlined processes
Why this matters:
Investors now have more ways to verify — and in some cases, the process may be as simple as confirming your status in writing.
5. How Our Investment Platform Uses Rule 506(c)
We use Rule 506(c) to give accredited investors like you greater transparency and access to the real estate opportunities we’re sourcing and operating — while staying fully compliant with SEC regulations.
Here’s how it works:
- You create a free investor profile on our platform
- You verify your accredited status through a secure process, which may include:
- A written attestation confirming you meet the SEC’s criteria, paired with a qualifying investment amount
- A personal financial statement or recent tax documents
- A verification letter from your CPA, attorney, or financial advisor
- Using a third-party verification service integrated with our platform
- Once verified, you can access current and upcoming investment offerings inside the platform
6. Common Questions About Rule 506(c)
Can anyone invest in a 506(c) offering?
No — only verified accredited investors may invest in these offerings.
Do I have to show my tax returns?
Not necessarily. The SEC’s 2025 guidance allows for more flexible verification methods — especially for larger investment amounts. A written confirmation may be sufficient in some cases.
Is my verification permanent?
Not quite. Here’s how the timeline works:
- 90-day validity: Verification letters or documents (such as a CPA letter) are typically valid for 90 days from the date of issuance. This is what sponsors use when confirming your eligibility for a specific investment.
- 5-year accreditation: If you were verified through a third-party platform or process, your accredited status can remain valid for up to five years, assuming your financial situation hasn’t materially changed.
- Annual re-attestation: Some platforms (including ours) may request a simple yearly re-confirmation to keep your investor profile active and up to date.
Know this before you invest:
Even if your accredited status is still valid, platforms often require that your verification letter or confirmation is dated within 90 days of the investment.
Final Thoughts
Regulation D, Rule 506(c) has reshaped the private real estate landscape. For investors, it means access to more opportunities, better transparency, and less gatekeeping. For sponsors, it provides a clear framework for responsibly raising capital and engaging with a broader investor base.
Want to explore the platform and see what’s coming next?
Create your investor profile and verify your accreditation to view current opportunities built for accredited investors.
These investment opportunities are available to verified accredited investors only under Regulation D, Rule 506(c). Verification may involve documentation, a written statement, or other reasonable steps as outlined by current SEC guidance. These offerings are not a guarantee of returns or performance. Investing in real estate involves risk, including the potential loss of capital.