RealtyMogul Review 2020
RealtyMogul is an online crowdfunded real estate investing platform. Investors can pool their money together and invest in a variety of different real estate projects. The layout of the platform allows for an interactive experience for investors. You can check the status of your investment, view ongoing updates and monitor the progress of each project.
RealtyMogul takes a modern approach to real estate investing and aims to give a better investor experience when compared to a traditional REIT investment. RealtyMogul offers a variety of portfolios consisting of both commercial and residential real estate. In this RealtyMogul review, we will cover the strengths and weaknesses of the RealtyMogul platform.
Minimum Investment: $5,000
Account Fees: 0.30% – 0.50% per year
Investment Length: 6 – 120 months
Accredited Investor Requirement: NO
Private REIT: YES
Investment Types: Debt, Equity, Preferred Equity
Property Types: Commercial, Residential, Single-Family
States: All 50 US States
Secondary Market: NO
Self Directed IRA: YES
RealtyMogul Company At A Glance
Founded: October 2012
Address: 10780 California Route 2, Los Angeles, CA 90025
Founders: Jilliene Hellman, Justin Hughes
Contact Info: [email protected], 310-907-7129
What Is Real Estate Crowdfunding?
Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture. In this case, that new business venture is in real estate. Crowdfunding is a way for business owners to raise money, not by asking one investor for a huge investment, but by reaching out to a large pool of investors who each contribute a small amount of money.
A key difference between crowdfunding and more traditional methods of raising money is in the platform used, as crowdfunding is usually done online. Real estate investors have adopted crowdfunding as an alternative to more traditional means of financing investments. For example, large developers are using crowdfunding platforms to attract capital from a large group of smaller investors.
What Is RealtyMogul?
RealtyMogul is a crowdfunded real estate investing platform where investors can pool their money together and purchase real estate projects throughout the country. The RealtyMogul platform offers a variety of real estate investments.
Investors can purchase equity investments in both commercial and residential real estate as well as real estate debt investments.
RealtyMogul offers multiple investment vehicles, however, some are only accessible to accredited investors.
When you create an account with RealtyMogul, first you will create your username and password. The minimum investment is $5,000 and you can make any deposits under $100,000 directly using ACH transfers (anything over $100,000 will need to be a wire transfer). To invest in RealtyMogul Private Placements, you must be an accredited investor. There are a number of options available for non-accredited investors too!
You can choose from 3 investment options on the RealtyMogul platform:
- Mogul REIT I
- Mogul REIT II
- Private Placements (accredited investors only)
To be eligible to invest in Mogul REIT I and Mogul REIT II, you DO NOT need to be an accredited investor! You can invest in these REITs as long as you meet the $5,000 minimum investment.
RealtyMogul Investment Options
RealtyMogul offers 3 different investment options. Each has a unique investment objective. Private Placement investments are limited to accredited investors only. Mogul REIT investments do not require investors to meet the accredited status.
The term or time horizon of RealtyMogul investments depends on the type of asset (debt or equity). Debt investments typically have a 6 to 12 month time horizon. Equity investments typically have a longer-term, on average 3 to 10 years. Equity investments typically pay distributions on a monthly basis. While debt investments typically pay distributions on a quarterly basis. It is important to understand that distributions are never guaranteed by RealtyMogul.
Mogul REIT I
Mogul REIT I is a public non traded REIT investing in commercial debt and equity investments. The goal of Mogul REIT I is to generate income and diversification through a variety of real estate investments. With the aim to preserve, protect and grow your investment over the long term, Mogul REIT I has the objective to pay attractive and consistent cash distributions.
The minimum investment for Mogul REIT I is $5,000 for ordinary accounts and $5,000 for retirement accounts. This investment is open to any type of investor, and not limited to accredited investors. Mogul REIT I has had an average annualized return of 7.76% over its life. Investors receive dividend payments on a monthly basis.
Mogul REIT II
Mogul REIT II is a public non traded REIT focused on the growth of capital over the long term. This REIT has the goal of paying out quarterly cash distributions to investors. Mogul REIT II mainly invests in residential real estate, primarily apartment developments.
One of the main strategies of the REIT is to renovate and reposition multifamily homes with the goal of capital appreciation over time. Mogul REIT II looks for properties in established and revenue-consistent areas and neighborhoods. As a result, over the past year Mogul REIT II has paid out a 4.5% yield on distributions to investors. The minimum investment for this REIT is $5,000.
Realty Mogul also offers a variety of private placement investments. These private placements are limited to accredited investors only. You must have a net worth of $5,000,000 or annual income of $200,000 / $300,000 if married.
For the most part, all private placement offerings are slightly different within Realty Mogul. Some may have investment minimums as well as lock-up periods for your initial investment. The investment objective for Realty Mogul private placements is for long term capital appreciation and income over time.
What Is An Accredited Investor?
An accredited investor is someone who has a recognized level of income, net worth, or professional experience allowing them to invest in higher-risk securities that may not be registered with traditional securities laws. The SEC uses the term accredited investor to describe individuals who show financial knowledge of the risks associated with unregistered security.
In order to stay compliant with the SEC, the companies who issue unregistered securities must verify they are selling to accredited investors only. They may do this by verifying income and net worth of the investor using tax returns, W-2’s, mortgage statements etc.
An investor must meet the following requirements to meet the accredited status:
- An annual income of $200,000 ($300,000 if married) over the last 2 years, and reasonably expects to make this much in the future.
- OR a net worth of at least $1,000,000, not including the value of your primary residence.
Realty Mogul charges fees based on the type of investment you select. For example, debt or equity investments. These fees include an asset management fee ranging from 0.30% to 0.50% annually. There are also legal fees for certain investment types. These fees can be up to 3% of the initial investment.
Pros Of Investing With Realty Mogul
- User-friendly dashboard and experience.
- Gives regular investors access to large scale real estate investments.
- The minimum investment is $5,000.
- Quarterly or monthly distributions based on the investment.
- Invest in both equity and debt real estate investments.
Cons Of Investing With Realty Mogul
- Non traded REITs are illiquid in nature, you must have a long term time horizon.
- Private Placement investments require investors to have an accredited status.
- Fees vary by investment vehicle.
Alternatives To RealtyMogul
Fundrise is one of our favorite platform for investors who are non-accredited. You can choose from a variety of portfolios depending on your investment goal. The user interface is the best available today. The starter portfolio has a minimum opening balance of just $500, making this investment accessible to just about anyone.
Other platforms like EquityMultiple put you in the driver’s seat. You hand-select each project to invest in based on your own criteria. This platform is for those who have a lot of prior real estate investing experience. Investors need to know how to determine what projects are investment-worthy and a good fit for their portfolio. EquityMultiple is for accredited investors only.
RealtyMogul Review: Summary
We believe RealtyMogul is one of the top crowdfunded real estate investing platforms available today. With a $5,000 minimum deposit investors can get started investing in private real estate projects throughout the country. RealtyMogul offers both debt and equity real estate investments. Investors can choose from a variety of portfolios so they can find one that best fits their needs. RealtyMogul offers a unique user experience and access to an asset class traditionally limited to higher net worth investors.
Crowdfunded real estate investing has grown in popularity over the last decade. With so many options and platforms available it can be daunting to decide on the right platform for you. Our blog, Investing Simple brakes down many of these real estate investing platforms. Check out our articles below.