Accredited Investor Opportunities for 2022

The Best Opportunities for Accredited Investors (with Case Studies)

High-yield investments for accredited investors are highly sought after, given the potential for profits multiple times higher than retail investing. By pooling together capital outside the typical mainstream options, accredited investors maximize revenue potential while still effectively managing risk.

1. Venture Capitalists (VCs)

Getting to invest with top-rated companies in the VC arena is stressful, even if you have the credentials to qualify as an accredited investor many times over. Why? Simply because there's a massive appetite to get in on the ground floor in an era where startups disrupt industries from banking to the supply chain. Companies like Hillhouse Atlantic ($30 billion), Hillhouse Capital Group ($30 billion), Insight Venture Partners ($18 Billion), and Iconiq Capital ($14.5 Billion) in most cases bypass individual investors, favoring pension funds, financial firms, insurance companies, and university endowment applications. If nothing else, the VC arena showcases the world's most sophisticated investors' attraction for alternative options.

Furthermore, one should appreciate that business failure moves the needle back and forth at a furious rate in even the best-run VCs. They work on the principle that one blockbuster in the portfolio more than makes up for nine that fall off. So, buying into a VC venture is not for the fainthearted. Indeed, investing in it depends on the managing partners finding "diamonds" in a tanglewood of rough. 

2. Hedge Funds

These are private investment partnerships and funds pools that appeal to accredited investors, but mostly the institutional types (similar to those outlined under venture capital above). These days actuaries (the architects behind insurance asset placements) and pension fund managers frequently bake diversification into their portfolios.

Hedge funds with consistent records fit the bill perfectly, representing lateral investment agendas that highlight unique skills. Good examples are Blackrock Advisors (controlling nearly $800 billion assets), AQR Capital Management ($164 billion, and Bridgewater Associates spearheading a powerhouse alternative investment industry that's attracted trillions of accredited investors’ dollars.

3. Hard Money Asset-Backed Lenders

These options are a favorite of wealthy individuals, the cream of individual accredited investors. They seem to catch on to lending money to real estate developers from all walks of life for short-term projects, with the land and buildings held as first mortgage security. They are most active in commercial and residential real estate, working with property wholesalers, fix-and-flippers, fix-and-renters, bridge funding, mezzanine financing, and many other configurations.

Hard money lenders' funding pools emerge from aggregating numerous accredited investor contributions. As a result, their terms and conditions to borrowers are unconventional and far removed from the lending regulations that govern mortgage and regional banking activities.  

4. Real Estate Investing 

Outside of REITS (An SEC-regulated investment category), commercial and residential real estate developers offer exciting opportunities to accredited investors interested in various aspects of a highly diversified field. Real estate investment opportunities throughout the USA reflect IRRs of over 20% and considerable tax benefits providing access to niche and expansive ventures. These cut across verticals like condos, single-family (SF), multifamily (MF), office blocks, warehousing, hotels, restaurants, shopping malls, and industrial parks, to mention a few.

Two Examples:

• An MF developer recently invited accredited investor applications to subscribe for entry into a 174-door apartment building (B/C class) somewhat rundown, requiring significant renovation. 
  • The upside is that it's close to Salt Lake City - a rapidly growing metropolis - and an industrial center ready and willing to absorb a massive labor influx. Highways provide fast access to these hubs less than thirty minutes from the MF residences. 
  • Another big attraction is that the general partner leading the project negotiated the deal at a severe discount. After repairs, the units should upgrade to B class and command a lofty rental with low vacancy rates. Outside of this, the complex includes a swimming pool in spacious gardens and other sports facilities.
  • The project as described is the tenth in a line-up of similar ones (a common theme, if you will). The latter has earned investors from end-to-end close to 20% IRR over the years. 
  • The exit strategy is particularly enticing, successfully applying a protocol built around a maximum of five-year holds. 
  • With a captive audience eager to get in on the next project, the general partners seldom promote to an audience outside of past investors.
• In Connecticut, a highly experienced operator heads a company (hereon referred to as "C") buying SF homes in distressed or semi-distressed condition, adding value with renovations. The primary skill is finding and buying homes with these characteristics, especially in today's hot markets. Fortunately, a highly geared calling center and savvy "property finders" keep the stock rolling. Fully funded for the purchase and renovation phase by hard money lenders and a hedge fund, renting the homes out is where the ROI begins to make the most sense.

It works like this:

• Let’s say C buys a house for $100,000 and renovates it for $40,000 with finance charges. The new appraised value (AV) tops out at $180,000. This is Phase-1 of the program.
• C refinances the project at 70% of the AV, or $126,000. It leaves him $14,000 short of the funds necessary to pay back the hard lenders. Now multiply the shortfall by 100 houses every six months. This is Phase-2.
• C invites accredited investors into the project's second phase to rent out for the following three years before selling. The investment package boils down to 10% annual interest paid monthly on investment in the form of a loan, plus a sizable share of the capital gain after further real estate appreciation on the newly appraised $180,000. 
• The general partners cannot draw capital gains until fully remitting loans and interest to Phase-2 investors.
• As an alternative investment for accredited investors, it has proved very popular. Investors who have passed through numerous three-year cycles with this general partner attest to IRRs of more than 20% 

5. The Kona Estates at Opihihali: An Excellent Real Estate Option and Case Study

Visualize a prime, world-famous, ocean-front location:

• With millions of visitors annually enjoying 271 days of sunshine (on average)
• Iconic beaches, surfing, and eye-popping scenery
• Outdoor adventures second to none
• Luxury hotels and accommodations wherever you travel in the region. 

Yes, we're talking of none other than Hawaii. Now, imagine arguably the best location on these magnificent islands, offering the pinnacle of everything this state provides. So, if you're looking for paradise on earth, set your sights no further than Kona Development Partners. It is a corner of Hawaii that practically speaks for itself in beauty and lifestyle.

The state experienced unprecedented real estate appreciation before COVID-19 hit populations far and wide. According to Zillow, it surpassed 20% year-on-year and continues to hold as the demand for choice homes is on a tear. We bring this up because the opportunity for accredited investors to jump on to a once-in-a-lifetime opportunity is there for the taking. 

When looking at Kona Development Partners, LLC, the company has emphatically addressed all the due diligence considerations that create hesitancy for accredited real estate investors. As a result, you'll discover a transparent, clear-cut proposal with enticing returns and a low-risk rating to boot. It has everything and more for any accredited investor seeking the highest ROI with maximum peace of mind.

Here are the benefits of the Kona Estates at Opihilale investment package:

• A private real estate fund that has built an enviable reputation over many years (including a billion-dollar track record).
• Right now, access to a super-development of luxury SF homes in one of Hawaii's 50 most sought-after locations. 
• A general management partnership where all you have to do is invest and then wait to reap the rewards.
• A team that reflects all the essential skills to get things done the right way:
  • From general contracting to property management and everything in between
  • Executing all its duties with precision.
• After going through all the qualifying parameters, some accredited investor opportunities start their entry minimums at $250,000 or even higher. Many hedge funds won't talk to you unless a $1 million commitment is on the table. It's not the case here:
  • $100,000 is the price of one investment unit, and you can take as many as you want.
  • The Kona Development Partners team confidently projects a 22% IRR, excluding the tax benefits accredited investors under a Section 506 C arrangement can configure. A compelling aspect of buying into Kona is that it doesn't compromise your tax benefits in any way.

• The managing partners can't draw benefits until the distributions have paid your capital back entirely. How's that for confidence?

Financial Leveraging isn’t a Concern

Mortgage funding is heavily in the mix in the majority of real estate opportunities, especially MF developments (like the one in our two examples above). Consider the following:

• During the pandemic, the government launched the CARES Act to protect tenants from eviction for more than a year, thus creating a ton of lease defaults. 
• Clearly, in cases like this, with debt driving projects forward, there's always a risk of foreclosure if rentals drop dramatically and don't recover. 
• That aside, mortgage companies routinely require any investor with twenty percent or higher equity interest to sign personal surety for the loan.

Conversely, when you invest with Kona Development Partners, erase all outside lender interference from your mind. It's a zero-leverage opportunity, allowing the investors to own 100% of the assets. 

Other Kona Estates Considerations

As an accredited investor drawn to real estate,  look no further than Hawaii and Kona Development Partners as your ticket to scale new heights in the state. 

• • Their investment memorandum is arguably the most explanatory document you'll ever review. It covers viable exit strategies and all the primary terms that make the program seamless and easy to enter.
  • Nothing competes with this company when you're looking to balance integrity and profitability. 
  • The Kona Estates at Opihihali will be the preeminent or most exclusive development on the South Kona Coast, and opportunities are available for accredited investors. 
  • The investor journey is smooth from start to finish. Again, look at a few of the numbers the area demonstrates. 
    • South Kona - over just one month (September 2021 - October 2021), prices of two-bedroom units rose by 12.1%
    • Kona latest sales shows: 
      • Year-on-year, dollar terms are up 142% for houses and 324% for land. 
• In residences, year-on-year, 1,122 sold (highest since 2004)

6. Some “Alternative” Outliers

There are so many verticals in the broad alternative investment landscape, the hunting ground of accredited investors. Here are some that frequently escape attention but attract those who understand the benefits and drawbacks of these somewhat diverse systems.

Merchant  Cash Advances (MCA)  - aligns closely with microlending operators. Both aim at small businesses:

• Unable to qualify for conventional bank loans
• Facing tight cash flows. 

MCA specialists are aware that their selected customer base represents escalated risk. However, the MCA formula embraces potential debtor failure, offsetting the latter with complex terms and conditions designed to cover essential securities. Moreover, higher borrowing fees provide a profitable operational field for those managers able to counteract the “downs” of MCA and capitalize the “ups.”

Trading in Online Businesses - aims at providing trading platforms for an audience eager to grab a piece of the burgeoning eCommerce markets. Also, they want to maximize the benefit of earning a living in the comfort of their homes. In response, entities are popping up all over the USA to emulate the successes of notable operators like Flippa and Empire Flippers. Notably, you don’t necessarily have to be accredited to get into this space because one of the biggest entities - Shopify (SHOP) - trades on the NYSE. Others invite subscribers through Series A money raises and similar.

Cryptocurrencies - accredited investors are attracted to the 2021 "Great Crypto Awakening" like iron nuggets to a magnet as prices hit mind-boggling heights - alongside a stomach-turning roller coaster ride. In short, this is on the opposite end of the SEC regulation spectrum. Blockchain startups and entrepreneurial talent flowed into the arena, coming at the revolutionary technologies from every angle. Circling back to VC investment opportunities, you'll find a substantial percentage revolving around the crypto concept and its many offshoots, promising industry disruptive benefits, and outsized potential profits.

Artwork, Collectibles, and Commodities - the best way to profit is through hedge funds that focus on these asset classes. They involve honed skills and years of experience. Accredited investors aiming for some diversification will find that extensive due diligence and scrutiny of the fund exit strategies are critical before making an astute selection in these fields.