Realty Mogul 2020 Review
As crowdfunding conquered investing and borrowing, it did the same with real estate investments. Realty Mogul is a crowdfunding real estate network where investors and real estate investment supporters and borrowers come together to make mutually profitable real estate investments. Overall, we found Realty Mogul to be easy to use and convenient.
What's Realty Mogul?
RealtyMogul is an online real estate capital market that started in 2012. The platform was set up by Jilliene Helman and Justin Hughes. They planned to challenge conventional real estate financing by creating an online crowdfunding platform.
Crowdfunding is a method of putting together creditors, borrowers and investment partners to make new investments. It is called a "peer-to-peer" system, involving mainly individuals on both sides of the transaction (although RealtyMogul is also open to institutional participation).
Today, the website has more than 185,000 registered users. It provided funding for more than 375 acquisitions, with funds raised totaling more than $400 million. The company set up equity capital for commercial real estate. RealtyMogul is operated by a team of experts with a range of expertise in real estate, finance and technology.
How RealtyMogul works?
RealtyMogul helps investors to engage in a wide variety of commercial real estate investments. Types include multi-family homes, office buildings, manufacturing sites, self-storage, retail and medical buildings.
When you invest, you normally do so by buying stock in a RealtyMogul Limitated Liability Company (LLC) that, in effect, invests in an LLC or a Limited Partnership (LP) that owns the real property. Investing in this manner minimizes overheads for fund investors and offers access to further investment opportunities, as well as streamlines the recording of dividends and tax details across the website.
RM Manager, LLC, a wholly-owned subsidiary of RealtyMogul, is the manager of RealtyMogul LLCs.
The definition of the particular investment depends on the company. Equity investments usually range from three years to 10 years. Equity portfolios usually pay out dividends on a quarterly or semi-annual basis. These are just general laws, and it is important to note that investment distributions are never guaranteed.
For income tax purposes, the IRS form K-1 will be issued annually for each equity investment and the proceeds of that specific investment will be published. Distributions from RealtyMogul's two REITs are recorded on IRS form 1099.
Benefits of RealtyMogul:
- Easy collection of investments
- Simple and convenient financing
- Monitoring of expenditure 24/7
- Reports can be made online
- Quarterly or semi-annual distributions for equity investments; monthly or quarterly distributions for REIT investments
- RealtyMogul provides more investment versatility than real estate investment trusts (REITs)
- Investments usually do not require a capital call that is a request for additional capital outside the initial investment
- Individual investments are 'pre-planned,' which ensures that the platform offers a detailed underwriting to assess the feasibility of every investment.
- Invest in both investments (accredited investors only) or in two separate REITs (all investors)
In rivalry with Fundrise's eREITs, RealtyMogul launched their first REIT in 2016. Called MogulREIT I, the advantages are that accreditation is required, more diversification of assets investing in individual properties and a much lower minimum investment threshold than private placement. The total sum to be invested is $5,000 plus a premium of up to 3% of Equity Contribution and a 1% annual wealth management charge.
According to their website, MogulREIT can invest in a number of types of properties, including but not limited to multi-family, residential, industrial, self-storage, retail and medical office. The fund will invest in a range of commercial real estate-related equity and debt securities through these various types of property. Therefore, it would be a collection of different types of property and not just one segment or place across the country.
Unlike other private REITs that have long periods of investment without redemption, RealtyMogul notes that they will require redemption every quarter. However, it is also noted in the deal circular that there are caps on the total amount of redemption each year.
MOGULREIT II (New)
In September 2017, another REIT, the MogulREITII, was launched by RealtyMogul. Unlike the first REIT program, MogulREIT II is available to both accredited and non-accredited investors, enabling all investors to participate in the real estate market.
The emphasis of this second REIT is on the inequity of a multi-family national industry, which is an especially hot business area. As RealtyMogul notes, according to the United States. Census Bureau's Housing and Vacation Homeownership Report, the U.S. housing market experienced a solid recovery, as demonstrated by a gradual decline in vacancies and average annual effective rent growth of 3.9% per year between 2010 and 2015.
Realty Mogul Fees
You will make a minimum initial investment of $1,000 to invest with RealtyMogul. You will make regular ACH transactions from your bank account for up to $100,000. You will need to use wire transfers for sums that reach $100,000. Every investment you fund will have a different account number that the platform will use to ensure that the funds go directly to the particular investment opportunity.
Proceedings of the Realty Mogul Signup
You start with creating an account. You must first create a password and confirm your email address. You will then declare that you are an accredited investor, that is, that you are a wealthy investor with a net worth of at least $ 1million — excluding your primary residence — or that you have an taxable profit of at least $200,000. (Note: If you want to invest in only the two MogulREITs — see below — you don't need to be accredited.) After that, you enter general details, and you're in.
The Dashboard of Realty Mogul: The dashboard helps investors to monitor all the terms of their investment on the website. This covers how much money they have spent, successful sales, and returns on these investments.
RealtyMogul provides a rare opportunity to invest in real estate that is less costly than to buy real estate on an individual basis. This is also much broader in nature than investing in real estate thanks to real estate investment trusts (REITs). It is an incentive to invest in real estate through a number of close-to-home investment opportunities.
The downside is that you need to be an accredited investor to take part in a variety of network transactions. Nonetheless, RealtyMogul's REITs have a far more open area for taking action.
Realty Mogul main features and highlights
- Commercial Real Estate