Rule 147 is a federal rule that basically says that as long as you, all investors and usually 80% of the assets owned by the company are all contained within one state, then the SEC will allow states to regulate the sale of securities. The securities will usually be registered under Regulation D, Rule 504, which limits the issuer to raising $1 million in a 12-month period. Registered offerings under Rule 504 are approved by state regulatory agencies under the Small Company Offering Registration (SCOR) program
State registrations can be challenging and may take a long time to get approved, but once approved, you can raise money from non-accredited and accredited investors, and some states may allow you to advertise.
These types of offerings are generally more suited for syndicators who only need to raise $1 million or less (e.g., to start a business) versus buying real estate where $1 million might not go as far as you need it to. But, if everything is contained in one state and you don’t have a short timeframe to close on a property you have under contract, it could be a viable option for you.
The reason Rule 506 is so popular is that it pre-empts state laws (except for securities notice filings) and allows you to raise an unlimited amount of money from investors in multiple states without getting pre-approval from federal or state regulators, so you can raise money as soon as the offering documents are complete.