Are You an Accredited Investor

An individual qualifies based on income if they had income exceeding two hundred thousand dollars in each of the two most recent years, with a reasonable expectation of the same in the current year. Married couples can qualify jointly at three hundred thousand dollars combined income under the same two-year and current-year expectation standard. The income test looks at actual earned and investment income as reported, not net worth or assets, so a high earner with modest savings can still qualify under this path.

Separately, an individual or couple qualifies if their net worth exceeds one million dollars, excluding the value of their primary residence. This exclusion matters in Miami, where home values have risen enough that many households would clear a million dollars in net worth if the primary residence counted, but do not once it is excluded. Investment real estate, retirement accounts, and other assets do count toward this test, along with liabilities other than the primary mortgage being subtracted.

Beyond the financial thresholds, certain professional licenses qualify someone as accredited regardless of income or net worth, including a Series 7, Series 65, or Series 82 license in good standing. This path exists to recognize that some individuals have the financial sophistication to evaluate private offerings even without meeting the wealth thresholds, and it is a route some real estate professionals and financial advisors use themselves.

A DST sponsor cannot simply take your word for it. Verification typically involves a letter from a CPA, attorney, or registered investment advisor confirming your status, or documentation of income through tax returns and net worth through account statements and appraisals. This verification step is a securities law requirement, not an extra hurdle the sponsor invented, and it applies to every investor in a private placement offering regardless of the sponsor.

If you do not currently meet any of these tests, DST interests are simply not available to you as a 1031 replacement property option, though this does not close off the exchange itself. Directly owned replacement property, a single rental, a small multifamily building, or a commercial property in Miami, remains fully available regardless of accreditation status, and it is worth confirming this distinction early rather than discovering it after identifying a DST during the 45-day window.

The tests above cover individuals, but a trust, corporation, or LLC can also qualify as an accredited investor in its own right, generally by holding total assets above five million dollars and not having been formed for the specific purpose of buying the offered security. This matters for a Miami owner who holds title through an LLC or family trust, since the entity's own asset base, not necessarily the individual members' personal finances, may be what a sponsor actually evaluates during verification. The rules here get technical quickly, and confirming which test applies to your specific ownership structure before you start comparing offerings avoids a delay once the 45-day clock is running.

Because a DST sponsor's verification process, gathering a CPA letter or account statements, can take days to complete, an investor who waits until deep into the 45-day identification window to confirm accredited status is adding avoidable risk to an already tight timeline. Anyone selling appreciated Miami property who thinks a DST might fit their plan is better served figuring out accreditation status before the sale even closes, so the answer is settled well before the clock on identification starts running.