Menu

What is a wholesale investor?

Friday, 30th Sep 2016

group fundWhile some investment syndicates are offered to all investors, other syndicates are only offered to ‘wholesale investors’. So what exactly is a wholesale investor?

If you’ve looked into investing in a residential property development syndicate, you might have seen the phrase, ‘available for wholesale investors only’, or something similar.

If this is the case, it’s not necessarily a cause for concern if you’re relatively new to property investment.

This is because an investor is deemed to be wholesale depending on their net income or net worth or a few other specific criteria.

To be classified as a wholesale investor, you must meet one of two criteria. These are either:

1) You must hold net assets worth more than $2.5 million; or
2) Your gross household annual income must be at least $250,000 (this can include income from a business if you’re a small business owner)

To prove that you meet at least one of these criteria, investors are required to obtain a certificate from a qualified accountant stating so.

There is also a third avenue that investors can take to participate in a syndicate that is only offered to wholesale investors.

That is to invest more than $500,000 in the syndicate. Anything above this amount is classified as a wholesale investment and allows the investor to take part in a syndicate offered only to wholesale investors.

If you meet any one of these three criteria, then you’ll be able to access more investments that potentially have greater returns or can provide more diversity to your portfolio.