A Married Couple consists of two people who are legally married and who will use their combined financial qualifications to determine their accreditation status.
As a married couple there are four ways that you may qualify as accredited:
- Income Based Verification – This requires that you be able to provide evidence that the two of you combined have earned at least $300,000 per year for the last two consecutive years
- Net Worth Verification – This requires that you be able to provide evidence that you have a combined net worth over $1 million
- Third Party Verification – This requires that you obtain a letter from a financial professional who has personally reviewed your net worth or income
- Rollover Verification – This only applies to those who have previously invested in another Rule 506 private offering issued by GreenZone Properties
Please select one of the following options:
Income Based Verification
The Income Based Verification method requires that you provide evidence that the two of you combined have earned at least $300,000 per year for the last two consecutive years. You must also have a reasonable expectation of reaching that same income threshold this year.
You can use any document that has been filed with the IRS to verify your income. This includes things such as a W-2, K-1, 1099, 1040, etc. Keep in mind that you must be able to verify hitting the $300,000 threshold for the past two years. It is not enough to qualify in just the most recent year. Additionally, you are required to submit a signed letter indicating any anticipated changes to your income for the current year and stating that you anticipate being able to exceed the $300,000 threshold needed to qualify as accredited.
Net Worth Verification
The Net Worth Verification method requires that you provide evidence that you currently have a combined net worth of more than $1 million. Net worth is calculated by adding up all of your assets and subtracting your liabilities. There are a few caveats as explained below.
Assets – Anything you own with a positive cash value
Liabilities – Debts and other financial obligations
When calculating your net worth you may not include any equity in your primary residence. However you are not required to deduct the mortgage you may have on your home, so long as you have do not have negative equity (meaning your home is financially underwater). For example, if your home is worth $400,000 and you have a mortgage of anything less than $400,001 your mortgage is NOT considered a liability that you need to document.
If you do have negative equity you must deduct that amount. For example, if your home is worth $400,000 and you owe $450,000 you must deduct the difference ($50,000) as a liability. Additionally, if you have borrowed any money from your home such as through a HELOC (Home Equity Line of Credit) within the past 60 days you must also deduct that amount as a liability. In the case of a HELOC you would only deduct the total amount outstanding, and not the full credit line.
Examples of assets may include: bank accounts, brokerage accounts, retirement accounts, automobiles, other investments, and physical possessions like computers, cell phones, furniture, appliances, jewelry, etc. Please keep in mind that you must be able to verify the value of all assets such as with bank statements or appraisals.
Examples of liabilities may include: credit card debt, student loans, auto loans, mortgages on additional property owned, medical bills, and other outstanding debt you may have. All liabilities must be disclosed.
In order to provide proper documentation of your status as an accredited investor based upon net worth, all of the following documents are required:
- Bank statements, brokerage account statements, retirement plan statements, and other such financial statements no older than 90 days showing your current account balances
- Tax assessments and property appraisals conducted by a third party reflecting the value of physical assets such as jewelry, rental properties, sports memorabilia, etc. or receipts for things like consumer electronics
- A credit report from Equifax, Experian, or TransUnion
- A list summarizing your assets and liabilities
- A written statement (signed letter) certifying that you have disclosed all liabilities necessary to make a fair and accurate determination of your net worth.
Additional documentation may be necessary if your assets are not held in your name. For instance, if you own 50% of a business with total assets of $800,000 you could claim $400,000 as your own. In order to do so, you’ll need to provide a copy of the business formation documents, the operating agreement which needs to include something indicating your interest (50% in this example), and evidence of the asset’s value. For example, if your business owns rental properties you could include the sales agreement or HUD-1 to show ownership, a current mortgage statement (showing the liability that must be subtracted), and an online valuation such as from Zillow, Trulia, or Realtor.com.
Third Party Verification
Third Party Verification requires that you obtain a letter from a financial professional who has personally reviewed your net worth or income. This is usually, but not always, someone that you’ve worked with and that knows your financial situation such as an accountant. They should have reviewed your qualifications within the past three months.
The third-party individual must be either:
- A Certified Public Accountant (CPA),
- A licensed attorney,
- An SEC registered investment advisor, or
- An SEC registered broker-dealer
This individual should prepare a letter on their letterhead (preferred, but not required) indicating that they have confirmed that you are an accredited investor. The letter can be short, but must indicate the third party’s role (as a CPA, licensed attorney, SEC registered advisor, or SEC registered broker-dealer either on the letterhead or in the letter itself) and simply state that they have reviewed your financial qualifications and have verified that you are an accredited investor.
Rollover Verification refers to any individual or couple who has previously invested in a different Rule 506 private offering issued by GreenZone Properties. If this is your first investment in a GreenZone Properties fund you cannot use this approach to accreditation verification.
You must invest in the new offering in the same manner that you invested in the previous one, otherwise you will need to requalify. For example, if you previously qualified as a couple but have since become divorced and now wish to invest as a single person you will have to requalify. You would also need to requalify if you previously invested as part of a company you were an owner in, but now wish to invest outside of that entity.
If you are able to qualify through a Rollover Verification, you will only need to provide written certification (a signed letter) indicating that you are still an accredited investor by the same method previously used.