RealtyMogul is one of the better platforms for real estate crowdfunding. Here I will provide an overview and full RealtyMogul review to help you make the best decision for real estate investing.
RealtyMogul Review 2020: Passive Income with Crowdfunding
Real estate is among the safest investment options. However, it requires a lot of capital, care, and attention, as choosing the wrong property or investing at the wrong time, can cause you to lose all or part of your investment.
If you’re finding it difficult to invest in a property or care for one, then it may be a good one to consider an app like RealtyMogul. This internet based platform allows investors to invest in properties without having to worry about choosing or maintaining one. Plus, you can start for as little as $1,000. Hence, anyone can invest.
But, is RealtyMogul reliable and a good choice for investors? We’ll gauge in this RealtyMogul review.
Let’s get started:
What is RealtyMogul?
Based in Los Angeles, Real Mogul is an online crowdfunding platform that allows investors to invest in real estate without actually purchasing one. It offers both private real estate investment placements and real estate investment trusts (REITs).
If you don’t know REIT, here is a set of real estate investing definitions to help you.
Launched in 2013, it has over 175,000 investors who have invested more than $375 million under different plans. According to reports, the company has above $100 million in investment distributions.
The platform makes it possible to invest using a 1031 exchange. Thanks to this feature, you will be able to defer capital gains until you decide to sell your RealtyMogul shares.
Hence, RealtyMogul can be a good option for those looking for a regular income. However, it’s important that you get in touch with a tax professional before engaging in a 1031 exchange.
RealtyMogul History and Overview
Founded by Justin Hughes and Jilliene Helman, the platform aims to disrupt the traditional market and introduce a peer to peer arrangement.
Accredited by the Better Business Bureau in 2013, the platform enjoys a rating of A+. You can turn to the program to invest in real estate and also to generate equity for your real estate.
How to Join RealtyMogul?
The signup process is very simple. The platform is open for both individuals and institutions.
Accredited investors enjoy more benefits. However, the requirements can be tough. You must meet one of the following conditions:
- Have a net worth of at least $1 million excluding your current home.
- Have an annual income of $200,000 for this year or an average of $150,000 for the last two years.
- Have a trust with assets worth $5 million or more.
Non-accredited investors can invest in privately held REITs that are not traded. This means your investment will be locked indefinitely. On the other hand, accredited investors have the option to invest in equity opportunities.
In simple words, they can buy a share belonging to an LLC that owns a specific property. These investments are typically for a long period of time and offer little liquidity. You will have to wait until the LLC is dissolved or the project is completed before you can take your cash out.
Go here to sign up.
How Does RealtyMogul Work?
The first step is to make an account. The process will take a few minutes. Once done, you will have the option to take part in various commercial real estate investments such as industrial sites, medical buildings, warehouses, office buildings, etc.
Make sure to go through all the details and choose carefully. The company may show you data including past performances of similar projects to help you make a decision. However, remember that past performance does not guarantee future performance.
Once selected, the platform will ask you to fund your account. There are several ways to do so. The company allows ACH transfers for amounts under $100,000. If you want to invest more than you will have to turn to wire transfers.
At this stage, it is important that you decide if you’d like to take out your distributions or reinvest the money. You will be able to keep an eye on your investment from the dashboard. It will provide details including your total investment, distributions, etc.
You can invest in two ways. If you are an accredited investor, you will pay RealtyMogul and in return, the company will issue you shares that it will buy back based on the nature of your contract.
The company will invest the money it has accumulated from multiple sources into a Limited Partnership of LLC that holds title to the property you wish to invest in.
This method provides more investment options to investors and reduces overhead for sponsors. Plus, it also helps streamline tax information and reports.
Most investments run between three and 10 years. You will receive distributions on a quarterly basis but some investments may pay semi-annually.
In addition to this, the company will also provide you form K-1 for tax purposes.
|Min To Invest||Accredited Only?||Fees||Next Steps|
|$1,000||No||0.50%/year||Sign Up||Read Full Review|
See Related: Free Rental Property Excel Spreadsheet
Minimum Investment: You can start from $1,000 only but you’ll need at least $5,000 for an IRA account. Also, requirements differ based on your investment type. Private placements, for example, require more capital.
Available Accounts: Self-directed IRAs and taxable investment accounts.
Investment News: The platform gives regular updates regarding your investments. You can access quarterly reports from the dashboard. They are also emailed to you. In addition to this, the company will also offer you year-end tax investments to make it easier to calculate taxes.
MogulREIT1: The company announced its first-ever REIT, called MogulREIT I, in 2016. Some believe it was to compete with Fundrise’s popular eREITs. This option offers more diversification as it lets you choose individual properties. Plus, investment requirements are lower when compared to private placements.
You will need a minimum of $5,000 to invest. There is a fee of 3 percent+management fee. MogulREIT consists of a pool of various commercial properties. But, what truly sets it apart is the fact that the company offers quarterly redemptions on these REITs.
But, since these redemptions come with limitations, it’s important to go through the contract in detail.
MogulREIT2: The company announced MogulREIT II in the fourth quarter of 2017. This option is available for both accredited and non-accredited investors and concentrates mainly on the multifamily market, which is one of the fastest growing real estate markets right now.
According to the company, you will be paying a total of 5.8% in fee, which means 0.942 of every dollar will be invested.
RealtyMogul Fees and Costs
The platform is free to join. However, you will have to pay a small fee for its services. The commission varies between 1% and 1.5% for REITs.
On the other hand, the commission largely differs from project to project when it comes to private placements. The total fee will depend on a number of factors including the size of the investment.
In addition to this, there is a management fee. However, since there are no hidden charges, you will not have to worry about having to cover extra fees.
Pros of RealtyMogul
Let’s have a look at some of the pros of RealtyMogul in this RealtyMogul review to understand why it may be a good option for you:
- Suitable for all kinds of investors including accredited and non-accredited investors. However, some options may not be open for non-accredited investors.
- It allows you to execute documents online. Thus, you will not have to worry about manual calculations.
- The dashboard is quite easy to use. You will have no problem in maintaining your account or keeping an eye on performance.
- No capital calls are required. Hence, you will never be asked to provide additional capital above and over your initial investment. If the company ever needs more money, it will dilute your investment instead of asking for more capital.
- Pre-vetted investments, thus safe and secure. The company uses a detailed underwriting process to evaluate properties.
- REITs offer a lot of ease but they provide investors no control over individual investments. However, this will not be a problem with RealtyMogul since it allows you to invest in individual properties based on your preference.
- Regular distributions for both REIT and equity investments
Cons of RealtyMogul
No product comes without disadvantages. Let’s have a look at some of the cons of RealtyMogul in this RealtyMogul review to understand where it needs improvements:
- It can be quite difficult to qualify as an accredited investor since very few people in the country have an annual income of $200,000.
- It can take up to 7 years for investments to mature which can be a problem for some users since you have no secondary markets to count on.
Is RealtyMogul Safe and Reliable
RealtyMogul is safe and secure as it is a registered platform with all the licenses required to offer financial services. In addition to this, there is little to no risk of data theft as the company uses reliable multistage testing to ensure vulnerabilities are well taken care of.
The company is headquartered in Los Angeles and has been operational for close to a decade. It’s backed by several venture capital firms. Hence, it can be said that RealtyMogul scam is just a myth and the firm is real and safe.
See Related: RealtyMogul vs Fundrise
RealtyMogul Customer Support
We found a lot of information on the website including detailed articles and videos on how to use the platform. You will also find information related to REITs and retirement investment on the site. If this doesn’t work then you will have the option to get in touch with the company over email, live chat, or phone.
They’re available Monday to Saturday 8AM to 6PM. The agents are quite friendly and well-informed. However, you may have to wait a little while to get connected.
RealtyMogul Review Conclusion
RealtyMogul is a reliable platform that caters to all kinds of investors. You can start from just $1,000 but a lack of liquidity can be a problem for some users.
If you have holding power and you’re struggling to find the right investment then consider opting for RealtyMogul as it offers pre-vetted properties and is also easy and affordable to use.
Financial Wolves is a blog focused on helping you make money to achieve financial freedom.