Is RealtyMogul Legit?

RealtyMogul

Have you ever considered investing in real estate but feel overwhelmed by the process and unsure where to start? The thought of owning a property and managing tenants may seem daunting, but what if there was a way to invest in real estate without the hassle?

Enter RealtyMogul, an online platform that allows individuals to invest in a variety of real estate projects, from apartment buildings to office spaces, with a minimum investment of just $5,000. But with so many investment options available online, you may be wondering, is RealtyMogul legit? Let’s take a closer look at this innovative platform and explore its credibility in the world of real estate investing.
Learn More About RealtyMogul

Company Background

RealtyMogul was founded in 2013 with the goal of empowering investors to build their real estate portfolios. The company was founded by CEO Jilliene Helman, who identified the need to provide non-traditional investors with access to real estate investment opportunities.

The company has since grown to become one of the leading online real estate investment platforms in the United States, with over $1 billion invested on the platform to date.

RealtyMogul offers its members exclusive access to institutional-quality real estate investments, including individual properties and Real Estate Investment Trusts (REITs), all with the aim of generating passive cash flow, diversification across almost all property types, and creating long-term value.

RealtyMogul’s approach is rooted in personalized service, proven business discipline, and data-driven insights. Members have access to a wide variety of commercial real estate deals, including multifamily, office, retail, and ground-up development, in dozens of markets across the country.

The company has an impressive track record, with over $5.9 billion in property value financed via the RealtyMogul platform and over 29,000 apartment units financed to date. Additionally, the company has a membership base of over 274,000 registered members.

This speaks to the legitimacy of the company and the trust that investors have placed in the real estate investing platform. With a focus on transparency and a commitment to offering institutional-quality real estate investment opportunities to non-traditional investors, RealtyMogul has established itself as a leader in the online real estate investment space.

Key Features

RealtyMogul is a real estate crowdfunding platform that connects investors with real estate investment opportunities. The platform allows accredited and non-accredited investors to invest in a range of real estate projects, including commercial, multi-family, mixed-use, industrial, and residential properties.

Here are some key features of RealtyMogul:

Real Estate Investment Opportunities: RealtyMogul offers a range of real estate investment opportunities, including equity investments, debt investments, and preferred equity investments. Investors can choose to invest in individual properties or in diversified portfolios of properties via their REIT offerings.

Diversification: RealtyMogul offers investors the opportunity to diversify their portfolios by investing in a range of real estate projects across different asset classes and geographic locations.

Professional Management: RealtyMogul’s team of real estate professionals manages the investment process, including due diligence, asset selection, and ongoing property management.

Transparency: RealtyMogul provides investors with regular updates on the status of their investments and offers a range of reporting tools to help investors track their performance. Additionally their website is very detailed and straightforward with the inherent risks and fees associated with their investment solutions.

Non-public REITs

RealtyMogul offers two different non-traded Real Estate Investment Trusts (REITs): the Income REIT and the Apartment Growth REIT. The Income REIT focuses on providing monthly income to investors by making equity and debt investments in commercial real estate properties.

Since inception, the Income REIT has paid an annualized cash distribution of between 6-8% net of fees for 76 months and distributed a total of $27.1MM to investors to date. The Apartment Growth REIT, on the other hand, focuses on capital appreciation through value creation in apartment buildings located in resilient markets. Since inception, the Apartment Growth REIT has made quarterly distributions equating to 4.5% annualized based on purchase price and has delivered a 12.03% total return for the last twelve months.

Investors can invest in either of these REITs with a minimum investment of $5,000. Both REITs are non-traded, which means they are not listed on a stock exchange, and can offer potential passive income through cash flow derived from tenants paying rent and potential additional income from enhancements to the properties. RealtyMogul conducts regular audits by Cohn Reznick to ensure transparency and reliability for its investors.

Private placement offerings differ from publicly traded investments in that they are not registered with the Securities and Exchange Commission (SEC) and are not available for purchase on public exchanges. As a result, private placement offerings may be subject to less regulatory oversight and may offer less liquidity than publicly traded investments.

Investing in private placements requires careful consideration of the associated risks, potential returns, and the suitability of the investment for an individual’s financial situation and investment objectives. It is important to thoroughly review the offering documents and consult with a financial advisor or tax professional before investing in a private placement offering.

Impressive Returns

RealtyMogul has an impressive track record of returns across different types of real estate investments outside of their REIT offerings. As of their most recent reported data, the platform had a total realized investment amount of $208,390,450, with a total of 223 realized investments. The overall realized internal rate of return (IRR) was 20.7%, which is above the overall target IRR of 15.0%.

Looking at the track record by investment type, equity syndications had an average realized IRR of 22.8% with an average target IRR of 16.5%. The platform has realized investments in 75 equity syndications, with a total realized investment amount of $134,826,000.

Residential debt had an average realized IRR of 10.2% with an average target IRR of 10.0%. The platform has realized investments in 132 residential debt projects, with a total realized investment amount of $33,038,500.

Equity funds had an average realized IRR of 31.7% with an average target IRR of 16.9%. The platform has realized investments in 6 equity fund projects, with a total realized investment amount of $23,341,150.

Fixed income had an average realized IRR of 9.1% with an average target IRR of 9.5%. The platform has realized investments in 10 fixed income projects, with a total realized investment amount of $17,184,800.

RealtyMogul has a solid track record of returns across different types of real estate investments. The platform’s above-target overall realized IRR of 20.7% indicates that the platform has been successful in generating returns for its investors. However, it’s important to remember that past performance is not a guarantee of future results, and all investments come with some level of risk.

Higher Investment Minimums

RealtyMogul’s Income REIT is available to all investors, but it is important to note that the platform has high minimum investment requirements. The minimum initial investment amount for the Income REIT is $5,000, making it more accessible to those with a larger amount of capital to invest.

Moreover, the REIT’s investment offerings are complex and may require a level of investment knowledge and expertise that may not be suitable for beginner investors looking to dip their toes into real estate investments.

Additionally, non-accredited investors may face potential restrictions on the amount of their investment. If you are a non-accredited investor, your investment amount is limited based on your annual income or net worth. RealtyMogul may help you calculate your maximum allowable investment amount when you initiate an investment on their platform.

While all investors have access to the RealtyMogul Income REIT, the high investment minimums, complex investment offerings, and potential restrictions for non-accredited investors may not make it the best option for beginner investors looking to start small in real estate investments.

Strengths:

  • Diversification: Both the RealtyMogul Income REIT and the Apartment Growth REIT offer a diversified portfolio of commercial real estate investments, which can help to reduce overall investment risk.
  • Potential for Passive Income: Both REITs provide investors with an opportunity for passive income from real estate investments. The Income REIT provides monthly cash distributions while the Apartment Growth REIT provides distributions on a quarterly basis.
  • Regular Audits: Both REITs undergo regular audits by Cohn Reznick, which provides an extra layer of transparency and assurance for investors.
  • Experienced Management: RealtyMogul has experienced management and investment teams that have a strong track record in the real estate industry.
  • Impressive Historic Returns: The payoff for the lack of liquidity and higher risk has paid off historically for RealtyMogul investors.

Weaknesses:

  • Illiquid Investment: Both REITs are non-traded, which means they are not listed on a stock exchange and can be challenging to sell. This makes the investments illiquid and potentially long-term in nature.
  • No Guaranteed Returns: The REITs are not guaranteed, and there is no assurance that investors will receive returns or that they will receive a full return of their investment.
  • Limited Operating History: The Income REIT has a limited operating history, which makes it challenging to assess its performance over the long term.
  • Conflicts of Interest: There are potential conflicts of interest between the REITs, their manager, and their affiliates, which may impact investment decisions.
  • Risk Factors: Both REITs have risk factors that investors need to consider before investing, such as the possibility of economic downturns affecting the real estate market and the risk of default on investments.

Final Thoughts – Is RealtyMogul Legit?

After examining RealtyMogul’s background, investment offerings, and track record of returns, it is safe to say that the platform is legit and has established itself as a reputable player in the online real estate investment space.

One of RealtyMogul’s biggest strengths is its commitment to transparency. The company provides investors with regular updates on the status of their investments and offers a range of reporting tools to help investors track their performance. Additionally, the platform undergoes regular audits by Cohn Reznick, providing an extra layer of transparency and reliability for its investors.

RealtyMogul’s impressive returns across different types of real estate investments within their REIT’s and outside of its REIT offerings further solidify its legitimacy. However, it is important to note that all investments come with risks, and RealtyMogul is no exception.

Investors need to carefully consider the associated risks, potential returns, and the suitability of the investment for their financial situation and investment objectives before investing in RealtyMogul’s non-traded REITs. Moreover, the high investment minimums, complex investment offerings, and potential restrictions for non-accredited investors may not make it the best option for beginner investors looking to start small in real estate investments.

For the right investor, RealtyMogul can be a valuable tool for diversifying their investment portfolio and generating passive income from real estate investments. Click here to get started with RealtyMogul today.

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