You can make a lot of money on commercial real estate and development, especially in expanding markets across the United States. But getting involved in large-school projects requires a lot of capital and the right connections.
RealtyMogul is here to make real estate investing a lot easier with minimal funds. According to the real estate crowdfunding platform, they’ve paid out more than $172 million to investors, financed over $2 billion in property value, and has over 200,000 registered members. Let’s take a closer look at RealtyMogul below.
See all the best real estate investing offers here. Other brokerage and investment offers here (e.g. Ally Invest, J.P. Morgan).
| Investment Offerings | Equity, preferred equity |
| Property Types | Commercial |
| Minimum Investment | $1,000 |
| Time Commitment | 6 months |
| Advertised Returns | 8%+ |
| Availability | All 50 states |
| Management Fees | 1% to 1.25% |
PROS
- REIT products are open to nonaccredited investors
- Low investment minimums
- REIT buyback program adds liquidity
- High targeted rates of return
CONS
- Complex fee structures
- Short track record
RealtyMogul Investment Offerings
RealtyMogul offers real estate investment trusts (REITs) and private placements.
REITs
There are two REIT products to choose from: The Income REIT and The Apartment Growth REIT.
The Income REIT is an LLC that invests in and manages a portfolio of commercial real estate investments, including multi-family, office, industrial, self-storage and retail. It’s a public, nontraded REIT, meaning it’s registered with the Securities and Exchange Commission, but it isn’t traded on stock exchanges like publicly-traded REITs. This REIT generally pays monthly dividends.
The Apartment Growth REIT is also a public, nontraded REIT, but invests in common and preferred equity investments in multi-family apartments, with dividends typically paid quarterly. Historical dividends are lower than The Income REIT, but it also aims to gain significant value appreciation over time.
Private Placements
Private placements are only open to accredited investors. These include opportunity zone eligible investments and diversified funds which are often not subject to some of the laws and regulations that protect investors, and are generally exempt from registration with the SEC.
RealtyMogul Features
RealtyMogul is a commercial real estate crowdfunding platform that allows investors of all sizes to invest in REITs, opening the world of commercial real estate to the Average Joe. Terms vary from investment to investment.
Open to Non-Accredited Investors
Non-accredited investors have access to RealtyMogul’s privately-held, non-traded REITs with a minimum investment of $5,000.
Accredited investors can invest in any of RealtyMogul’s offerings. These are individuals with a net worth of more than $1 million (excluding home value), or an annual income of more than $200,000 (or $300,000 with a spouse) for each of the last two years.
REIT Buyback Program
Most real estate crowdfunding platforms are illiquid, which means you can’t take out the money you invested within a given time frame. That said, RealtyMogul does allow shareholders to sell their Income Growth REIT and Apartment Growth REIT investments back to RealtyMogul, quarterly for a reduced price after the first year:
| INVESTMENT HELD FOR | BUYBACK PERCENTAGE |
| Less than 1 year | 0% |
| Between 1 and 2 years | 98% |
| Between 2 and 3 years | 99% |
| Over 3 years | 100% |
This is not a guarantee and is subject to availability of capital.
High Return Targets
As with any investment, actual returns vary. There is no guarantee that you will earn a return or even get your initial investment back. RealtyMogul return targets, however, are:
| INVESTMENT | RETURN TARGET |
| Private placement | 0% – 15% annualized, distributed on a quarterly or monthly basis |
| The Income REIT | 7.7% – 8% annualized, distributed monthly |
| The Apartment Growth REIT | 4.5% annualized, distributed quarterly |
Customer Service
RealtyMogul offers phone and email support during normal business hours, as well as a comprehensive FAQ section.
RealtyMogul Pricing & Fees
Signing up for a RealtyMogul account is free. There are no costs to join or to browse the investments available on the platform. However, once you begin investing, there are fees to take into account.
RealtyMogul charges different fees for REITs and single-asset direct investments:
REITs
| FOR | COST |
| Organization, offering & other operational expenses | Up to 3% of the equity raised directly from investors |
| Asset management fee | 1% annualized fee based on the average investment value of the assets |
| Disposition fee | Up to 2% of the contract sales price for each asset sold |
| Promoted interest | Undetermined amount earned after the REIT has been paid a preferred return |
| Servicing fee for performing investments | 0.5% of the principal balance and accrued interest |
| Special servicing fee for nonperforming investments | 1% of the original value |
Single-asset direct syndications incur a 1% administrative services fee.
You can find the specific fee structure for each deal when you browse through RealtyMogul investment opportunities.
Bottom Line
RealtyMogul opens up the world of real estate investing to people who aren’t property development experts. Investments are open to both accredited and non-accredited investors who can meet RealtyMogul’s investment minimums and want to diversify their portfolio. Although REIT offerings aren’t completely liquid, you have the option to sell your shares back to the company after you’ve owned them for at least one year.
Other real estate investing options you might like:
See our brokerage and investment offers page here.
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