Crowdfunding real estate has become a popular investment method in recent years, and one of the companies leading the way is Realty Mogul. With two different REIT options, Realty Mogul gives investors the opportunity to invest in multiple properties without having to personally fund a purchase or deal with any brokers.
What is Realty Mogul? (Review)
My Realty Mogul QUICK-LOOK Review
Company Name: Realty Mogul
Company Website: https://www.realtymogul.com/
Founders: Jilliene Helman and Justin Hughes
Minimum REIT Investment: currently $5,000
Investment Term: 1 – 10 years (3+ year term for 100% return – see details below)
Account Fees: Asset management 1%, Operating Expenses up to 3%, specific asset fees .5% – 2%
Annual Yield: 4.5% – 8% (2 different REITs)
Property Types: multi-family / multi-tenant, apartment, retail and office buildings with cash flow
Accolades: Forbes, Fox Business, Wall Street Journal
Let’s Acknowledge This First…
One of the first things I noticed when writing this review, is that the minimum initial investment amount is currently listed at $5,000. Previous investor reviews, and third-party reviews, indicate that the initial investment (even earlier this year) has been as low as $1,000.
Is this misinformation, or does the amount change? When the first REIT was introduced in 2016, the minimum investment amount was $2,500 per the company’s own YouTube video.
In either case, that’s quite a jump, especially for the average new real estate investor. What determines the fluctuation? We didn’t see an answer to that on their website. Is it a deal breaker? No, but it is inconsistent, and a bit confusing for investors researching their crowdfunding REIT options online.
RELATED: For a lower initial investment REIT opportunity, read this article: What is stREITwise? (Review) Should You Invest?
My Realty Mogul FULL Review
About Realty Mogul
Since 2013, Realty Mogul has been establishing a positive track record, both financially and socially. By performing rigorous due diligence on all property deals, they have managed to continually provide a passive income to investors.
Every deal they consider must meet requirements in 4 key factors:
1. The Partnering Company (background, experience, business references)
2. The Market (including demographics, trends, and comparables)
3. The Quality of the Property (current physical condition, tenant population, estimated improvement costs, and long-term viability)
4. The Investment (legal structure of the agreement, fees, and active management of assets)
A property must meet the requirements of all 4 areas, and receive unanimous approval from their investment committee, to be considered as an addition to the Realty Mogul asset portfolio.
The Realty Mogul REIT Options
An Affordable Way to Get into Real Estate:
It depends on what’s considered “affordable.” In the grand scheme of things, yes. In general, investing in REIT’s is the affordable option when the alternative is purchasing the property yourself. How much one has to invest, will determine which REIT company one chooses to invest with.
Realty Mogul is not the lowest initial investment option, but does offer two REITs with a moderate start-up investment that have brought returns to investors for 3 years.
The Details on the Realty Mogul REITs:
- Mogul REIT 1
- Designed to provide investors consistent monthly income through obligated interest payments of debt securities (mix of senior secured loans, mezzanine debt, B-notes, preferred equity and equity structures)
- Currently comprised of 14 diversified investment properties including multifamily, office, industrial, self-storage, and retail buildings
- Mogul REIT 2
- Designed to provide long-term capital appreciation and quarterly income through regular payments of multi-family apartment buildings (equity investments)
- Currently comprised of 7 multi-family investment properties
Account Minimum Investment:
Both REITs offered by Realty Mogul currently have an initial investment minimum of $5,000.
Both REITs are available to accredited or non-accredited investors.
The Potential Return:
- Mogul REIT 1 – has reported returns between 7.76% and 8% since inception in 2016
- Mogul REIT 2 – has reported returns of 4.5% since 2018
Must-know Investment Information:
Public non-traded REITs, such as these, are illiquid by design, meaning that they are meant to be long-term investments.
However, Realty Mogul has implemented a Share Repurchase program which allows investors the option of limited quarterly liquidity so long as capital is available.
Here is the Share Repurchase timeline:
- First year – NO Repurchase Allowed
- 1 – 2 years – 98%
- 2 – 3 years – 99%
- More than 3 years – 100%
So, the soonest you can request repayment is after 1 year, be it at a discount, and you can request 100% repayment after the 3 year mark.
This Share Repurchase program is a unique investor option that Realty Mogul offers.
What Realty Mogul REITs Offer
- an alternative to the stock market with historically higher return potential and inflation hedge
- MODERATE MINIMUM INVESTMENT
- $5,000 minimum investment for either REIT
- NO BROKER FEES
- However, there are account management fees as described at the top of this article
- PROFITABLE TRACK RECORD
- Though returns have not been as high as some other REITs, they have been profitable
- CUSTOMER SATISFACTION
- 4 and 5-star reviews by investors who did their own due diligence*
- Acclaimed by Forbes, Fox Business, and Wall Street Journal
* We found two 1-star reviews on Google. The first offered no reason for why they gave only 1 star. The second complained that his money was tied up for 12 months. That’s just poor research on his part, as they make it VERY clear that this is a long-term investment with a minimum of 12 months return (and they disclose that any early return request prior to 3 years is returned at a percentage.)
Additional Accredited Investor Options
For those who want to invest greater amounts across a variety of investments, there are 2 other options available for Accredited Investors only:
1. Individual Property Investments (Private Placement)
- Property Types include multi-family, office, industrial, and flex-space
- Minimum Investments range between $15,000 – $50,000
- Investment Term range is 3 – 7 years
2. 1031 Exchanges (Very complicated property exchange!)
- Allow real estate investors to defer their capital gains tax on the sale of a property if they reinvest the proceeds in another qualifying property.
- Highly flexible investment range between $25,000 and $50,000,000
- No agents, escrow, or closing costs
Those interested in either of these opportunities should consult a tax professional, and the Investor Relations department at Realty Mogul has 1031 Specialists to help with questions or transactions.
What Does the BBB Have to Say?
Realty Mogul has been filed with the BBB since 2016, and currently holds an A+ rating. To instantly check their current status, you can visit the BBB’s website.
The PROS and CONS
Overall, we found the Realty Mogul’s website to be very informative, and mostly user-friendly. To find a lot of the details, you want to make use of their footer menu as much as you do the main top menu. They have extensive FAQ’s pages. Account start-up is quick and easy. Support is readily available.
- A+ BBB Rating
- Share Repurchase program offers some flexibility in a typically illiquid investment
- Moderate Minimum Investment amount of $5,000 in either REIT offering
- Proven track record of providing investors a positive return while minimizing risk
- Transparency in their business platform and real estate activity
- $5,000 initial investment. Yes, this is a drop in the bucket considering you are investing in multi-million dollars of real estate assets. None-the-less, it may be more than the “average Joe” can give up for 3+ years.
How Do You Become an Investor?
You Can Get Started in 4 Easy Steps:
- Start a quick personal profile and select your reason for joining Realty Mogul
2. Select Your Investment
- View past investment performance
- Browse current “open investments”
- Choose which investment aligns with your personal goals
3. Make your Investment
- Enter your investment amount
- Choose to receive or reinvest your distributions
4. Monitor your Investment
- Use the Realty Mogul Dashboard to see your current account overview including:
- cash invested
- distributions reinvested
- cash distributions paid out
- Inspect your active investment, anytime you want, with 24 / 7 access online
- Receive quarterly investment reports
- Receive annual tax documents
* Disclaimer – BYIO is not providing investment advice. BYIO is not promising a return on your investment. BYIO suggests you consult with your financial professional, or make sound judgment on your own, when debating investing in Realty Mogul or any other online investment company. We’ll keep sharing what information we have, and we hope you make a lot of money!
Some Realty Mogul FAQ’s
1. Why Realty Mogul?
Realty Mogul has a very strategic and thorough due diligence system. They claim to research 1000 properties, on average, before underwriting any agreement. (1 in 1,000 makes it into their portfolio!)
2. Can I invest more than the minimum $5,000 when I open a new account?
How much you can invest is determined by your income, and you may need to be an accredited investor to increase your investment amount. It is advised to call and discuss your investment options with a Realty Mogul professional real estate adviser to determine the appropriate amount.
3. What’s an Accredited Investor?
The SEC defines an Accredited Investor by the following:
- Earn an annual income per individual of over $200,000 per year ($300,000 per couple) with the expectation of maintaining such level of income in the future.
- Have a net worth of more than $1 million (individually or jointly), excluding the value of a primary residence.
- Be a bank, insurance company, registered investment advisor, business development company, or small business investment company.
- Be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.
- Be a business in which all the equity owners are accredited investors.
- Be an employee benefit plan, a trust, charitable organization, partnership, or company with total assets in excess of $5 million.
4. Are the investments guaranteed?
No. No investment is guaranteed, be it stocks, bonds, or real estate. There is always risk in investing. What you want to research, and discuss with you financial advisor, is how the investment minimizes risk. The advantage with real estate is that it is a physical asset, as opposed to a stock or bond.
5. Can I contact somebody at Realty Mogul if I have a question before investing?
Yes. You can contact them at any time. Here is their Contact Information:
Address: 10780 Santa Monica Blvd, Los Angeles, CA 90025
Phone Number: (877) 977-2776
You can also find them on these social media platforms:
Facebook | Instagram | Twitter | LinkedIn | YouTube
Who are Realty Mogul’s Competitors?
Click to read our DiversyFund Review. Minimum initial investment is $500, and there is no early redemption plan.
Click to read our Fundrise Review. Minimum initial investment is also $500.
Click to read our stREITwise Review. Minimum initial investment is $1,000 and they have an early redemption plan!
Click to read our CrowdStreet Review. ACCREDITED INVESTORS ONLY. Minimum initial investment is $25,000.
Click to read our Rich Uncles Review. No minimum initial investment required.
There are many real estate crowdfunding companies available to choose from. We’ll keep reviewing, and updating as necessary. We hope you find the right company to meet your goals!
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