RealtyMogul is a popular real estate investment crowdfunding platform that allows both accredited and non-accredited investors to invest in commercial real estate. The platform aims to simplify investing in real estate using technology. This RealtyMogul Review will help you determine if the real estate crowdfunding platform is a good option for you.
RealtyMogul Review: Overview
RealtyMogul gives investors access to private commercial real estate opportunities that are typically reserved for institutional and high-net-worth investors. With non-traded REITs available from just $5,000 and private placements for accredited investors, the platform offers a straightforward way to diversify beyond traditional stocks and bonds. RealtyMogul has facilitated more than $1.2 billion in investor equity across hundreds of real estate projects and provides access to both income-focused REITs and individual private real estate deals. Few platforms offer this combination to both accredited and non-accredited investors. RealtyMogul is designed for long-term real estate investing, so liquidity is more limited than traditional brokerage accounts. Investors seeking quick access to their capital may find the multi-year holding periods less suitable for their goals.
RealtyMogul can help both accredited investors and non-accredited investors invest in real estate. The platform is one of the largest crowdfunding platforms for commercial real estate investments, more specifically multi-family properties.
What makes RealtyMogul unique is that a non-accredited investor can access the investment opportunities available on the platform. With some crowdfunding platforms in the real estate investing marketplace, only accredited investors are eligible to invest.
The platform is also known for its very thorough due diligence. RealtyMogul thoroughly vets each and every real estate deal and sponsor with in-person, on-location market and property research.
The investment platform also goes a step further than other real estate investing platforms by offering portfolio and asset management for standalone real estate investment trusts (REITs) and commercial real estate deals.
RealtyMogul Review: How Does RealtyMogul Work?
RealtyMogul is a real estate crowdfunding platform that aims to simplify investing in commercial real estate.
RealtyMogul offers investors a wide range of commercial real estate investments. These investments include multi-family housing, office buildings, self-storage property, medical properties, and retail properties.
On the RealtyMogul platform, investors can browse real estate projects and investments. They can also easily view due diligence materials. The platform allows for the secure signing of documents for any investment made on the platform.
Once you invest in real estate via RealtyMogul, you will gain access to the dashboard, which allows you to monitor your investment 24/7. This way, you can see how your investment is working for you.
RealtyMogul Review: Ways to Invest
The most common way to invest with RealtyMogul is through their equity investments for accredited investors. With the platform’s equity investments, you simply fund a single purpose entity, and the entity itself invests in the asset, whatever that may be. Money made from the investment is then returned to investors after being split up.
Besides private placements, RealtyMogul also has two real estate investment trusts (REITs) that invest in similar properties.
Each REIT is made up of different investments and has differing goals. One REIT focuses on multi-family housing and apartment buildings, while the other focuses on commercial real estate properties.
RealtyMogul Review: Is Real Estate Crowdfunding a Good Investment?
Online technology helps bring forth a new way of real estate investing. For this reason, real estate crowdfunding can be a good option for both seasoned and novice investors.
At one time, the only way a smaller investor could add a real estate investment to their portfolio was through a publicly traded REIT. However, with the help of real estate crowdfunding, investors can invest in private placements and real estate deals they otherwise would not have access to.
Diversify Your Portfolio with Commercial Real Estate
Adding real estate to your portfolio can help not only with diversification but with stability as well. This is because it is not generally as affected by stock market fluctuations. Public REITs do not accomplish the same thing since they are traded on the stock market and can be affected by stock market downturns.
Additionally, other types of real estate investments that do not occur via a crowdfunding platform typically require a large initial investment. With crowdfunding, investors can invest in real estate for much less and more easily.
RealtyMogul Review: Due Diligence
Most importantly, with real estate crowdfunding, the due diligence is typically done for you. Properties are generally vetted and simply brought to you via an online platform where you can then perform additional research before making any decisions.
Sophisticated datasets aid the due diligence process. The review process focuses on the sponsor and the property. Perhaps most importantly, a RealtyMogul team member travels to each individual property to confirm the property’s location, building characteristics, and condition.
However, all investments come with some risk, so you should always do your own research and be aware of your own risk tolerance.
RealtyMogul Review: What’s Included with RealtyMogul?
RealtyMogul includes quite a few features for investors who use their platform. RealtyMogul’s platform includes:
- Private Market Offerings
- Dashboard
- 1031 Exchange
- Auto Invest
RealtyMogul Review: Private Market Offerings
If you are an accredited investor, you can invest in individual properties through RealtyMogul’s platform.
The private placements or individual real estate deals include multi-family housing, office buildings, retail properties, and medical properties.
These offerings are equity investments and are structured as an LLC. Investors make money when the LLC profits from the investment.
Each property is thoroughly vetted, and due diligence is handled entirely by the RealtyMogul team.
These investments typically range from three to seven years and require a minimum investment of $25,000 to $50,000.
RealtyMogul Review: Dashboard
The RealtyMogul website includes a dashboard that investors can access once they invest in either of the REITs or a private market offering. The dashboard allows you to monitor your investments and see how your money is working for you.
Investors can see the money they have invested, any transactions that are currently active, as well as any earnings on their investments.
RealtyMogul Review: 1031 Exchange
With 1031 exchanges, investors can defer the capital gains tax that comes with selling a property by reinvesting their earnings back into a qualifying property.
RealtyMogul’s 1031 exchange allows accredited investors to invest funds immediately. There are no agents, escrow, or closing costs when you invest through the 1031 exchange platform.
Additionally, the property management services are taken care of. This is covered by a management fee, however.
These exchanges are ideal for investors who are looking to sell current properties and defer taxes.
RealtyMogul Review: Auto Invest
RealtyMogul offers an auto investment option for both of their REITs. This option allows investors to watch their investments grow automatically from month to month. Each REIT is different and offers different ways of investing. If you are interested in property investment but do not want to manage your own portfolio, the auto-invest option may be useful to you.
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RealtyMogul Review: Is RealtyMogul Legit?
Realty Mogul has a pretty good track record. The platform is indeed legit. Both the equity investments and REITS have had strong past performances. The company is well known for its thorough vetting and due diligence.
RealtyMogul is one of the largest real estate crowdfunding platforms out there, with more than 185,000 members. It has provided funds for over 375 investments totaling more than $400 million. The platform has also returned more than $190 million to investors.
RealtyMogul consists of a team of professionals who have experience in finance, real estate, and technology.
While each deal is thoroughly vetted, it is still important to look at the fine print of each deal or investment to make sure you know what you are getting into. This, however, is the same for almost any investment.
If you are looking to invest in real estate deals without the day to day headache of purchasing a property yourself, this platform is a solid option.
RealtyMogul Review: How Much Does RealtyMogul Cost?
While Realty Mogul does not charge a fee to browse properties on their platform, there are some other fees that you should be aware of.
Since fees vary across different investments, it is important to read the fine print to know what fees you will be liable for as an investor.
RealtyMogul does not have tiers like some other real estate investment platforms. However, each of its investment opportunities has a different structure and supports different goals.
MogulREIT I
The minimum investment for this REIT is $5000.
MogulREIT I is a non-traded, public REIT that makes equity and debt investments in commercial real estate properties. These properties are diversified by geography, property type, and investment.
The primary goal of this REIT is to provide passive monthly income to each investor through the evaluation of investment opportunities that support the distribution target.
This REIT invests in both debt and debt-like securities such as loans.
MogulREIT I has at minimum the following fees:
- Organization, offering, and other operating expenses: Up to 3% of the equity raised from investors. This covers third-party accounting fees, legal fees, and marketing expenses.
- Asset management fee: A fee of 1% of the average investment value of each REITs’ assets.
- Equity asset fees:
- A disposition fee of up to 2% of the sales price for every asset that is sold.
- A promoted interest fee. This amount is only determined after the REIT has paid a preferred return to investors.
Other Fees
- Servicing fee for performing investments: This is a 0.5% fee charged on the principal balance and accrued interest.
- Special servicing fee: 1% of the original value of nonperforming investments.
MogulREIT II
MogulREIT II also has a minimum investment of $5000.
MogulREIT II has at minimum the following fees:
- Organization, offering, and other operating expenses: Up to 3% of the equity raised from investors. This covers third-party accounting fees, legal fees, and marketing expenses.
- Asset management fee: A fee of 1.25% of the average investment value of each REITs’ assets.
- Equity asset fees:
- A disposition fee of up to 2% of the sales price for every asset that is sold.
- Other Fees
- Acquisition fee: This fee is up to 3% of the purchase price.
MogulREIT II is also a, non-traded REIT. This REIT invests in both preferred equity and common investments. The investments in this REIT are apartment buildings.
The focus of MogulREIT II is long-term appreciation through the renovation and refurbishment of apartment buildings and multi-family housing.
Private Placement
The fees for the private placement investment options vary per deal but are generally around 1%.
The investment minimum for these types of deals are anywhere from $25,000 to $50,000. While this may seem high to some, this is actually a bit lower than the industry standard.
RealtyMogul Review: RealtyMogul Cancellation Policy
While RealtyMogul does not have a cancellation policy per se, it does offer a buyback option for its REITs.
With the buyback program, some investments may be eligible for repurchase from RealtyMogul. The value of the RealtyMogul buyback on your investment depends on how long it has been in your possession.
Here is a basic break down of the buyback program and how much you can sell your shares back to RealtyMogul for:
LESS THAN 1 YEAR- Not eligible for repurchases
1 YEAR – 2 YEARS- 98% of net asset value (NAV)
2 YEARS – 3 YEARS- 99% of NAV
3 OR MORE YEARS- 100% of NAV
However, just because you may want to sell your shares back to RealtyMogul, this doesn’t mean they will necessarily repurchase them. For example, the company will not buy back more than 5% of shares within a calendar year. This works out to just about 1.25% of shares quarterly.
For private placement deals, it depends on the specific deal as to whether or not you can withdraw your funds. For this reason, you may want to look at the fine print before investing.
There are both pros and cons that come along with RealtyMogul. Let's take a look at what they are.RealtyMogul Review: Pros and Cons
Pros
Cons
RealtyMogul Review: Is RealtyMogul a Good Investment?
RealtyMogul provides a good option for investors looking to get into real estate investing without purchasing property themselves.
For the accredited investor, the platform offers investment opportunities in the private market that are thoroughly vetted and handpicked by the RealtyMogul team. This gives investors potential peace of mind when it comes to deciding whether or not a property is a good investment.
For those looking to get into real estate investing without having to take on a load of responsibilities, RealtyMogul appears to be a good option.
RealtyMogul Reviews by Investors
RealtyMogul is rated fairly highly by most professional reviewers. With that said, there are not many investor reviews available online.
However, RealtyMogul is one of the most respected real estate crowdfunding platforms out there. This is mostly because of its due diligence and thorough vetting of each deal.
Final Review: Is RealtyMogul Worth It?
If you are looking to invest in commercial real estate property, RealtyMogul may be a useful option. The products and services available could make investing in commercial property simpler.
The platform offers a good investing option for accredited investors and access to REITS with solid past performance for those who are not accredited.
The website is easy to navigate, and investors who are simply curious about the deals on offer can browse available investments at no cost to them.
For those looking to make money via real estate without the hassle of taking on the hard work of managing a property, RealtyMogul offers some potentially excellent options.
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