Investor Questionnaire required in California

Hi from sunny Campbell California!

Thanks Sandi for bringing up your question on Investor Qualifications.  Thought it would be good for today’s blog article.

Did you know about the Investor Questionnaire currently required by the State of California?  This questionnaire needs to be filled out by your broker for anyone to whom “notes or interests are sold”.  The purpose, according to the California Department of Real Estate (DRE) is to “make reasonable efforts to ensure all of the following with respect to the offer or sale of notes or interest in notes to be secured by a lien on real property or a business opportunity”.

The three basic criteria listed are;

1) Can the investor be reasonably assumed to have the capacity to understand the fundamental aspects of the investment, by reason of their educational, business, or financial experience.”

2) Can the investor bear the economic risk of the investment.

3) Is the investment in the notes or interests suitable and appropriate for the purchaser, given the purchaser’s investment objectives, portfolio structure, and financial situation.

Your broker needs to make this determination on the basis of information he or she obtains from the purchaser including according to the DRE “, at least, the age, investment objective, investment experience, income, net worth, financial situation, and other investments of the prospective purchaser, as well as any other pertinent factors the commissioner shall establish through regulation”.   

Your broker needs to maintain and annually update records of the information used to determine that an investment is suitable and appropriate for each purchaser and keep these records for at least four years.

Check in with your broker for additional information on this requirement or go to:

Please email me at if you’d like a copy of the questionnaire.

Good luck and Happy Lending!


p.s. Comments and questions are encouraged.  Also, if you like this article please hit the “Like” button.



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