Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation. Laws change over time and you should seek counsel to discuss any specific legal questions.
Real Estate Crowdfunding in Arizona: Understanding the Legal Framework for Investors
Real estate crowdfunding has changed how people invest in property, especially in Arizona, where a unique legal framework opens doors for residents eager to enter real estate without massive capital. But with opportunity comes regulation, and that’s where things can get complicated.
If you’re looking to get involved in a crowdfunding deal, or thinking of launching one, you’ll need to understand how Arizona’s laws intersect with federal securities rules. You’ll also want a trusted legal partner who can advise investors and help navigate state and federal compliance requirements.
Let’s break down real estate crowdfunding in Arizona.
What Is Real Estate Crowdfunding?
Definition and Scope
Crowdfunding involves raising smaller amounts of capital from a large number of investors, typically through online platforms that connect participants around a shared investment opportunity. In real estate, this often means investors pool funds to acquire, develop, or operate property through ownership interests in a sponsoring entity or project.
Unlike traditional real estate investments that may require substantial capital, some platforms allow participation with minimum investments as low as $1,000. While this expands access, it does not eliminate investment risk.
The Evolution in Arizona
Arizona was among the earlier states to adopt a formal framework for intrastate crowdfunding. Under A.R.S. § 44-1844(A)(22), certain offerings limited to Arizona residents may qualify for a state-level securities exemption when specific statutory and regulatory requirements are met.
Over time, the statute has been amended to reflect evolving federal standards and market practices, including adjustments to offering limits and disclosure obligations. While this framework can provide flexibility for qualifying issuers and investors, compliance remains essential.
Federal Regulations That Can Apply
Regulation Crowdfunding (Reg CF)
At the federal level, the Securities and Exchange Commission (SEC) permits qualifying issuers to raise capital through Regulation Crowdfunding using registered broker-dealers or funding portals. As of 2026, issuers may raise up to $5 million in a 12-month period under this exemption.
Investor participation is subject to limits based on annual income and net worth. Issuers are generally required to file required disclosures with the SEC using Form C, including financial statements, business information, ownership details, and risk factors. Annual reports must be submitted through Form C-AR.
These filing obligations are mandatory and require careful preparation.
Regulation D and Regulation A
Some real estate crowdfunding offerings rely on other federal exemptions.
Under Regulation D, issuers may raise capital through private offerings, including:
- Rule 506(b), which permits limited participation by non-accredited investors without general solicitation; and
- Rule 506(c), which allows general solicitation but limits participation to accredited investors and requires verification.
Regulation A provides additional flexibility. Tier 1 offerings permit raises of up to $20 million in a 12-month period and remain subject to state review, while Tier 2 offerings currently allow up to $75 million and are exempt from most state registration requirements.
Selecting the appropriate exemption and complying with its requirements is critical. An experienced real estate and securities attorney can help structure offerings to minimize regulatory risk.
Because crowdfunding and securities regulations are highly technical and fact-specific, investors and issuers should consult with qualified real estate and securities counsel regarding their particular circumstances before taking action.
Arizona’s Intrastate Crowdfunding Exemption
Core Requirements
Under A.R.S. § 44-1844(A)(22), certain intrastate securities offerings, including qualifying crowdfunding offerings, may be exempt from state registration when specific statutory and regulatory conditions are satisfied.
In general, eligible offerings must be limited to Arizona residents, and issuers are required to obtain reasonable evidence of investor residency. Issuers must also file a notice with the Arizona Corporation Commission and comply with applicable disclosure and escrow requirements.
While this framework can streamline capital formation for qualifying issuers, it remains highly technical and must be implemented carefully.
Scope and Investment Limits
Arizona’s intrastate exemption imposes aggregate offering limits over defined periods and applies to both debt and equity offerings when statutory conditions are met. Certain offerings involving digital assets or similar instruments may also fall within the scope of the exemption, subject to evolving regulatory guidance and heightened scrutiny.
Because these requirements are closely tied to federal intrastate exemptions and enforcement priorities, issuers and investors must remain attentive to both state and federal compliance obligations.
Working with an experienced Arizona real estate and securities attorney can help ensure these offerings are properly structured and documented.
Licensing and Oversight: Who’s Watching?
The Arizona Corporation Commission administers intrastate securities filings and enforces antifraud provisions under state law. The U.S. Securities and Exchange Commission maintains jurisdiction over interstate and federally exempt offerings.
Platforms facilitating Regulation Crowdfunding offerings must be registered with the SEC and FINRA as broker-dealers or funding portals. Platforms operating under Arizona’s intrastate exemption may be subject to state registration or oversight requirements depending on their activities and structure.
Regardless of exemption status, all participants remain subject to state and federal antifraud rules.
Who Can Invest and How Much?
Intrastate
Offerings conducted under Arizona’s intrastate exemption are generally limited to Arizona residents. Issuers and platforms are required to verify residency through appropriate documentation and representations.
In addition, Arizona law imposes per-investor participation limits for non-accredited investors, subject to statutory and regulatory conditions.
Regulation Crowdfunding
For offerings conducted under federal Regulation Crowdfunding, non-accredited investor participation is subject to annual investment limits based on income and net worth calculations, applied across all qualifying offerings within a 12-month period.
Issuers are responsible for monitoring compliance with these limits and maintaining appropriate records. Because these thresholds are periodically adjusted and subject to regulatory interpretation, careful legal oversight is essential.
What You Must Disclose
At the State Level
In Arizona, issuers relying on the intrastate exemption are required to submit a notice filing to the Arizona Corporation Commission. These filings generally include core offering information, such as the issuer’s identity, the nature of the securities being offered, intended use of proceeds, and key ownership and management details.
If any material information changes during the offering, issuers must timely amend their filings to remain compliant.
At the Federal Level
For offerings conducted under Regulation Crowdfunding, disclosure obligations are more extensive. Issuers must file Form C with the SEC, which typically includes:
- Financial statements
- Business and operational information
- Material risk factors
- Ownership and management structure
- Intended use of proceeds
Issuers are also required to file annual reports using Form C-AR for as long as reporting obligations remain in effect.
Incomplete, inaccurate, or poorly prepared filings can expose issuers to regulatory enforcement actions, investor claims, and other legal liability. Experienced legal counsel plays a critical role in helping issuers meet these obligations.
What About Platforms?
Platforms that facilitate Regulation Crowdfunding offerings must register with the SEC and FINRA as broker-dealers or funding portals.
Platforms operating under Arizona’s intrastate exemption may be subject to state registration and oversight requirements depending on their activities, structure, and level of involvement in securities transactions.
Regardless of exemption status, platforms and participants remain subject to state and federal antifraud rules and recordkeeping requirements.
Real Estate-Specific Things Investors Should Know
- Title and Escrow: Before funds are committed, investors should confirm that title issues have been properly addressed and that investor funds are being held by a qualified escrow agent or financial institution in accordance with applicable disclosures.
- Due Diligence: Investors should conduct thorough due diligence, which may include reviewing property appraisals, environmental assessments, financial projections, and the sponsor’s experience and track record. If material questions arise, investors should seek legal review before proceeding or consider declining the opportunity.
Recent Arizona-based multifamily crowdfunding offerings have demonstrated how intrastate exemptions can be used to raise capital for large residential projects, including properties with more than 100 units and relatively low minimum investment thresholds for in-state investors.
These transactions typically involve extensive legal documentation, regulatory filings, and compliance oversight, underscoring the importance of experienced counsel throughout the process.
What Risks Are Involved?
- Liquidity: Real estate crowdfunding investments are often long-term in nature. Capital may be tied up for extended periods, and there is typically no guaranteed secondary market for resale.
- Regulatory Changes: Federal and state securities regulations continue to evolve. Changes to exemption rules, disclosure requirements, or enforcement priorities may affect existing and future offerings.
- Fraud: Although most offerings are legitimate, fraudulent or misleading practices can occur. Both the SEC and the Arizona Corporation Commission maintain enforcement authority in this area. Investors should carefully review all offering materials and remain alert to potential warning signs.
What Smart Investors Do
- Evaluate the sponsor’s background, experience, and track record.
- Review offering documents carefully and strongly consider obtaining legal review.
- Confirm that the investment aligns with overall financial objectives and risk tolerance.
- Consult qualified legal counsel before committing funds.
For issuers launching crowdfunding offerings, early legal involvement can help avoid costly compliance issues and regulatory exposure.
How Gottlieb Law Supports Real Estate Crowdfunding
With deep experience in real estate and securities compliance, Gottlieb Law assists investors, sponsors, and platform participants throughout the crowdfunding process.
Our firm’s services include:
- Structuring Offerings: Advising issuers on appropriate state and federal exemption strategies.
- Regulatory Filings: Preparing and submitting required notices and disclosures to the ACC and SEC.
- Due Diligence: Reviewing property documentation, sponsor materials, and offering structures.
- Ongoing Compliance: Monitoring regulatory developments and disclosure obligations.
- Enforcement and Defense: Representing clients in regulatory inquiries, investigations, and enforcement actions.
Whether raising capital or evaluating investment opportunities, having experienced Arizona real estate and securities counsel can make a meaningful difference.
Work with Knowledgeable Arizona Real Estate Attorneys Today
Protect Your Investment. Power Your Next Deal.
The attorneys at Gottlieb Law guide clients through Arizona’s crowdfunding and securities framework with practical, compliance-focused advice. From structuring offerings to preparing disclosures and defending client interests, our team is prepared to support your next transaction.
Call Gottlieb Law today at 602-899-8188 or use our Contact Us page here to schedule your initial consultation.
Gottlieb Law, PLC provides this article for information purposes only and nothing herein creates an attorney-client relationship. You should not take any actions in reliance on any of the information contained herein without consulting with qualified legal counsel first and reading this article is not a proper substitute for seeking legal advice of your specific situation. Laws change over time and you should seek counsel to discuss any specific legal questions.