The 2000 Investor Limit refers to a limitation on the number of investors that can participate in a type of real estate investment trust (REIT) known as a “public non-listed REIT” (PNLR). A PNLR is a type of REIT that is not listed on a national securities exchange and is offered to the public through private placements.
The 2000 Investor Limit is a regulation imposed by the U.S. Securities and Exchange Commission (SEC) that limits the number of investors that can participate in a PNLR to 2000 or fewer. This limit is intended to ensure that these types of REITs remain closely held and that the investors in the REIT have a sufficient level of knowledge and sophistication to understand the risks associated with the investment.
The 2000 Investor Limit applies to both accredited and non-accredited investors. Accredited investors are individuals or entities that meet certain financial thresholds, such as having a net worth of over $1 million. Non-accredited investors are individuals or entities that do not meet these financial thresholds.
It’s important to note that, in order to qualify as a PNLR, the REIT must comply with the 2000 Investor Limit, and must also comply with other requirements such as providing ongoing financial reporting, and maintaining a
Investor Thresholds and Equity Crowdfunding
The JOBS Act revisions to the SEC regulations have allowed for the expansion of crowdfunding platforms, which permit raising funds from individual investors online without providing extensive financial information. The SEC has established investment limits for individuals on SEC-approved crowdfunding platforms, based on a percentage of their annual income or net worth, whichever is less.
As of May 2017, the following limits apply to individual investments through an SEC-approved crowdfunding platform:
- If your annual income or net worth is less than $107,000, you can invest up to 5% of the lesser of the two, with a maximum investment of $2,200.
- If your annual income and net worth are both $107,000 or more, you can invest up to 10% of your annual income or net worth, whichever is lower, with a maximum investment of $107,000. It’s important to note that these limits are subject to change and it’s recommended to check with the SEC for the most current limits.
For instance, if your annual income is $150,000 and your net worth is $80,000, the JOBS Act crowdfunding regulations permit you to invest the higher of either $2,200 or 5% of $80,000, which is $4,000, during a 12-month period. Therefore, in this scenario, you can invest up to $4,000 within a 12-month period.