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Written by Beau Jordan on May 17, 2022
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RealtyMogul Fees Explained 2022: What Are The Costs?

One of the best ways to diversify your portfolio is to invest in real estate. Even if you are currently investing in real estate you have options within the sector to diversify even more! Some of this diversification can come in the form of REITs (real estate investment trust), residential development, or commercial development. 

Unfortunately, the barriers to entry for traditional real estate investing are quite high. To invest in real estate investors usually need a minimum of 20% down to purchase a property. Even if the property is just $100k (which in 2022 would be difficult to find) you would need $20k as a down payment. That doesn’t even include the cash needed for renovations or building. 

Fortunately, real estate crowdfunding is now both legal and easy to access. Crowdfunding enables a large number of investors to supply capital through small investments rather than a small number of investors providing high amounts of capital. In essence, this allows more investors to play in the game rather than just venture capitalists!

RealtyMogul is a crowdfunding real estate platform that has seen success from both experts and new investors. A few of the most important platform offerings for RealtyMogul are its expertly created non-traded REITs and its private placement investments.

To learn more about all of the advantages and details of the RealtyMogul platform, head to our RealtyMogul summary article. While this article will cover some of the advantages of using RealtyMogul, the main purpose is to cover all of the fees associated with the RealtyMogul platform. 

Best Real Estate Platforms

PlatformInvestmentsLink
Crowdstreet LogoDiversified Funds, Individual Deals, Managed Portfolios, Opportunity ZonesView Investments
AcreTrader farmland investing platformMarketplace To Purchase Shares Of FarmlandView Investments
Equitymultiple crowdfunded real estate platformProfessionally Managed Commercial Real Estate PortfoliosView Investments
Realty Mogul real estate crowdfunding siteIncome REIT, Growth REIT, Individual Properties, 1031 ExchangesView Investments
Origin Investments real estate crowdfunding platformMultiple Private Managed Real Estate FundsView Investments

What is RealtyMogul?

realty mogul, investing, real estate, investingsimple.com

Since launch, RealtyMogul has had over 220k members use the platform. Those members have contributed to the nearly 30k investments made, over $800M raised for real estate projects, and nearly $5B in real estate nationwide. 

RealtyMogul has a couple of unique investment opportunities for its investors. Those two investment categories are REITs and individual properties. 

REITs on the RealtyMogul platform are a little different than other REITs you may find on other investment platforms. That is because the RealtyMogul REITs are non-traded REITs. This means that the REITs are private and must be purchased through the RealtyMogul platform rather than an online brokerage. 

Non-traded REITs typically see larger returns because they are not as public as traded REITs. This translates into higher returns because the portfolios are less susceptible to see panic selling as traded REITs. 

While RealtyMogul REITs are available to non-accredited investors, the minimum investment requirement is quite high at $5k. This is substantially higher than some of the RealtyMogul competitors. 

However, that minimum investment opens the door for investors to invest in one or both of RealtyMogul’s REITs. Remember that an investment in a REIT is a completely passive income. You as the investor will not be required to make any property selections or participate in the investment outside of your cash investment. 

RealtyMogul Investment Options

The first REIT is known as the Income REIT because of its monthly cash distributions. Typically investors who choose the Income REIT are looking for an investment with consistent cash flow. Additionally, this REIT is considered more conservative as it is focused on cash flow rather than high risk growth. 

The second REIT is known as the Apartment Growth REIT. This REIT is more aggressive and places a focus on growth through long term appreciation. The Apartment Growth REIT still pays cash distributions but at a lower yield and on a quarterly basis. This REIT is a higher risk but higher reward REIT for those looking to benefit from appreciation. 

The last investment opportunity for investors using the RealtyMogul platform is through individual properties or “Private Placements.” Since this form of investing is more risky, it is for accredited investors only. 

Accredited investors must meet one of the below three requirements. 

  1. Achieve at least a $1 million net worth
  2. Have a yearly income of over $200,000 if single or over $300,000 if married
  3. Demonstrate significant financial knowledge by passing a regulated exam such as the Series 65 or Series 7

Typically these individual property investments require a minimum investment of $25k to $50k and have a 3 to 7 year time horizon. To participate in individual property investments, investors will browse the RealtyMogul marketplace to select a deal on a property that is right for them and their risk tolerance. 

RealtyMogul Fees

According to the official RealtyMogul website, there are never any fees to establish an account with RealtyMogul. However, there are fees and account tiers that can come into play when utilizing all of the tools on the RealtyMogul platform. 

For purposes of this article, there are three buckets of fees and offerings associated with RealtyMogul investments. The three high-level buckets are listed below. 

  1. Income REIT Fees
  2. Apartment Growth REIT Fees
  3. Individual Property Investment Fees

Income REIT Fees

The Income REIT has paid consistent cash distributions to investors for 66 consecutive months. The best part is that the REIT has distributed annualized cash distributions between 6-8% a year net of all fees. 

The Income REIT portfolio is spread out among multi-family investments, office space investments, and retail space investments. Investors just need a minimum $5k investment to participate in the Income REIT.

Unfortunately, there are fees for those hoping to invest in RealtyMogul’s Income REIT. The most common fee is the asset management fee. This fee is 1% annually that can be payable in monthly arrears. 

The other Income REIT fee is the potential organizational and offering costs fees that are capped at 3% of equity contributions. If these fees are applied, the investor can expect to be made aware of it. 

It is also important to note that this investment is fairly illiquid. If you want to get your investment back prior to the completion of the specified investment period, you might be able to for a fee. RealtyMogul does state that early withdrawals are “subject to availability of capital” though. Typically this fee is 1% to 2% of your investment if the investment is held for more than a year. 

The official RealtyMogul team has consolidated information about the Income REIT in the RealtyMogul Income REIT Factsheet. The Income REIT Factsheet includes additional information surrounding terms, distributions, risks, and fees. 

Apartment Growth REIT Fees

The Apartment Growth REIT has paid consistent cash distributions to investors for 17 consecutive quarters. The best part is that the REIT has over $228M in asset value with the over $7.6M distributed to investors. Those assets are vital to the REIT as that is where larger future returns come to the investors. 

The Apartment Growth REIT portfolio is spread out among primary locations (MSAs have a population of 5M or greater), secondary locations (MSAs have a population between 2M and 5M), and tertiary locations (MSAs have a population less than 2M). Investors just need a minimum $5k investment to participate in the Income REIT.

Unfortunately, there are fees for those hoping to invest in RealtyMogul’s Apartment Growth REIT. The most common fee is the asset management fee. This fee is 1.25% annually that can be payable in monthly arrears. 

The other Apartment Growth REIT fee is the potential organizational and offering costs fees that are capped at 3% of equity contributions. If these fees are applied, the investor can expect to be made aware of it. 

It is also important to note that this investment is fairly illiquid. If you want to get your investment back prior to the completion of the specified investment period, you might be able to for a fee. RealtyMogul does state that early withdrawals are “subject to availability of capital” though. Typically this fee is 1% to 2% of your investment if the investment is held for more than a year.

The official RealtyMogul team has consolidated information about the Apartment Growth REIT in the RealtyMogul Apartment Growth REIT Factsheet. The Apartment Growth REIT Factsheet includes additional information surrounding terms, distributions, risks, and fees. 

Individual Property Investing Fees

As detailed above, the Individual Property Investing differs from the investment REITs offered on the RealtyMogul platform. These investments are in individual properties (or small groups of properties) rather than a set of properties in a portfolio. Additionally, these offerings range from multi-family investing to commercial real estate. 

This investment type is also referred to as “Private Placement” as defined by the SEC. Since these investments are more risky in nature, they are only available to accredited investors. Typically the minimum investment is $25k to $50k and the length of investment varies from 3 to 7 years. 

Unfortunately, the Individual Property Investing fees are more complex than the REIT offerings. The good news is that creating an account and investing with a real estate company will not cost you any direct fees. Every individual investment is different though and may or may not have direct and indirect fees. 

Fees are determined by individual real estate companies that are selling their investments on the RealtyMogul platform. Typically these fees will cover administration, legal, reporting, and communications for the investment. 

Every investment will descriptively lay out the specific fee structure for each real estate opportunity.  

RealtyMogul Fees: Final Thoughts

RealtyMogul provides great opportunities for investors to diversify portfolios with commercial real estate. With zero fees to create an account, there is no reason not to check out the platform to see if any investment opportunities match your particular needs and goals.

Remember that although creating an account and browsing deals is fee free, there are pieces of RealtyMogul that do have fees. The first list of fees apply to the Income and Apartment Growth REITs. Both of these REITs have asset management fees as well as potential organizational and offering costs fees. 

The second list of fees apply to Individual Property investing. These fees are determined by individual real estate companies that are selling their investments on the RealtyMogul platform. Typically these fees will cover administration, legal, reporting, and communications for the investment. 

Every investment on the RealtyMogul platform will descriptively lay out the specific fee structure for each real estate opportunity.  

If you feel like RealtyMogul may be a good fit for your investment portfolio, create an account today!

Article written by Beau Jordan

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