In the past, investors faced many barriers when entering the commercial real estate market. Historically, this type of real estate has only been open to accredited investors (i.e., very wealthy registered individuals).
In the age of digital disruption, everything has changed. Thanks to the emergence of crowdfunding platforms, it’s now possible for everyday investors—us non-accredited investors—to invest in commercial real estate.
All of a sudden, you don’t need to be rich or registered with the SEC to get some skin in the game. You can enter into commercial real estate just by signing up for a crowdfunding service.
If this sounds up your alley, one such service you should look into is RealtyMogul, a leading crowdfunding provider for commercial real estate projects.
Keep reading to learn more about what RealtyMogul is, how it works, and how you can make real estate deals using the platform.
What is RealtyMogul?
RealtyMogul is a leading real estate crowdfunding platform. It’s one of the longest-running and most widely respected platforms on the market, and something all investors should know about and explore.
With RealtyMogul, investors get a mix of personalized services with data-driven insights. Members can create their own portfolios with access to a broad range of real estate investment options.
Simply put, RealtyMogul opens access to institutional quality deals for real estate investors for residual cash flow and diversification across retail, industrial, office buildings, apartment buildings, and self-storage facilities.
The company also has great leadership under the direction of CEO Jilliene Helman and her team.
Who can access RealtyMogul?
What makes RealtyMogul unique is that the platform caters to both accredited and non-accredited investors. So, no matter which camp you fall into, RealtyMogul can help you start investing in no time at all. Suffice it to say the platform is full of opportunities for all types of investors.
So, whether you’re an everyday investor or a professional who’s been in the industry for years and is now looking for high-end properties, RealtyMogul has it all.
Does RealtyMogul have an app?
RealtyMogul is a desktop client only. Unfortunately, the service does not offer an app at this time.
That said, the RealtyMogul website typically receives rave reviews. Investors love its sleek design, quick access to information, and abundance of educational resources.
RealtyMogul Investment Options
Here’s a breakdown of what investment types and features to expect with the RealtyMogul platform.
1. REITs
RealtyMogul is widely known for its public, non-traded real estate investment trust (REIT) offerings.
REITs are ideal for investors looking to access passive real estate income in a less risky way than investing directly in properties.
With REITs, you don’t have to worry about any of the difficult aspects of owning real estate, like finding or dealing with tenants, purchasing properties, going through appraisals and inspections, and parting with high closing costs.
Instead, RealtyMogul purchases properties directly and gives investors regular distributions. It’s by far the easiest way to invest in real estate, whether you’re buying into the Los Angeles market or looking to buy into a specific sector (e.g., data center real estate).
For non-accredited investors, RealtyMogul offers MogulREIT I, which strives to produce steady income, and MogulREIT II, which is designed for growth. MogulREIT I offers attractive and stable cash distributions, while MogulREIT II enables long-term capital appreciation.
RealtyMogul also offers a separate REIT for accredited investors.
Auto Invest
RealtyMogul offers an auto-invest option, which is available upon enrollment with their REITs.
This is an excellent opportunity for investors looking for a hands-off approach to real estate management in which they don’t have to manually put money into investments.
This service is pretty straightforward. You simply enroll in the program and determine how often you want to invest in REITs. You may decide you want to invest in REITs on a monthly or annual basis. The minimum monthly investment is $250.
To get started, click the “auto invest” button on the RealtyMogul platform. Then, you need to give it some time for the auto invest request to process.
You can keep tabs on that progress by following updates on the RealtyMogul user dashboard.
Who should use auto-invest?
When you select auto invest, money automatically flows from your linked bank account into RealtyMogul REITs. As such, you need to make sure you have enough in your bank account to consistently cover the payments. Otherwise, you could get hit with overdraft fees from your bank.
Use auto invest if you’re in a comfortable financial situation and can afford to invest in real estate regularly. And as you do so, keep an eye on your portfolio.
Make sure you’re also investing in other areas like stocks, bonds, mutual funds, and index funds. That way, your portfolio doesn’t become too heavily weighted with real estate.
Real estate should only comprise a small portion of your overall portfolio. The last thing you want to do is set up an auto-invest option, forget about it, and wind up with an unbalanced portfolio.
Learn More:
2. Individual Properties
RealtyMogul also lets accredited investors invest in specific properties or small groups of properties through private placements. Unfortunately, non-accredited investors can’t access these investments.
Typical private placement investments range from three to seven years, and minimum investments run from $25,000 to $50,000.
3. 1031 exchanges
The 1031 exchange strategy has been growing in popularity over the last few years. Today, it’s one of the most popular techniques investors use to maximize taxes and diversify real estate portfolios.
With a 1031 exchange, investors can trade property for one of equal or lesser value. Under this method, you have the option of swapping a property for another single property or a smaller portfolio of offerings.
A 1031 exchange lets you defer capital gains taxes on your property, saving a lot of money in the process.
RealtyMogul makes it easy to find 1031 exchange-eligible investments, eliminating the hassle of discovering these opportunities.
Pricing & Fees
RealtyMogul is free to join, and you don’t have to pay anything to access their marketplace of properties.
Once you choose to invest with RealtyMogul, you’ll have to pay fees with each investment. According to RealtyMogul, fees range depending on the type of investment and the type of transaction you’re performing.
In most cases, you’ll probably have to pay 1% for asset management. REITs have fees too, generally hovering near 0.5%.
What’s more, RealtyMogul also has a minimum investment of $5,000. However, minimums can be higher, as it depends on specific investments.
Getting Started
One of the best things about RealtyMogul is that it doesn’t take long to sign up. You just need to complete these four steps.
1. Create Your Account
Head over to RealtyMogul.com and go through the brief registration process. It should only take a few minutes to get started.
This is a relatively painless experience, and you won’t have to wait days or weeks for approval.
2. Choose Your Investment
Once you’re in the system, you’ll see a list of eligible investments on your dashboard. Scroll through the offerings and browse properties that look interesting.
RealtyMogul does a nice job of providing transparency and visibility into each property. For example, you can view past performance and historical information to see if a property is something that makes sense for your portfolio.
3. Start Investing
Once you pick an investment opportunity, simply determine how much you want to put into the particular property.
You’ll also need to let RealtyMogul know what you want to do with distributions. You can either reinvest or receive direct payments.
4. Track Your Investments
The last step is to track and monitor your performance over an account dashboard. RealtyMogul makes it easy to see your total current investment and all of your distributions.
Another nice feature of RealtyMogul is that the site makes it easy to centralize tax documents and investment reports in one easy-to-access location.
Security
RealtyMogul is a widely used platform trusted by investors of all types. The company takes a variety of security measures to protect user data and offer a strong and safe user experience.
For example, RealtyMogul offers internal and external reviews of public and non-public services. They also use advanced security techniques (like encryption and firewalls) and offer real-time monitoring to detect and eliminate vulnerabilities and intrusions.
Customer Support
RealtyMogul offers standard phone and email support. Unfortunately, there is no live chat. However, customers should have no trouble accessing a live agent for assistance when necessary.
That said, the company does offer a variety of resources for customers, including a robust knowledge center. Customers with questions about things like REITs and real estate investing could potentially find the answers here without contacting customer support.
Property Sourcing
RealtyMogul sources investments from developers and team members with real estate connections who are able to locate lucrative properties.
The company claims to accept less than 1% of the deals they review, meaning investors get to choose from the cream of the crop.
Just keep in mind that this type of curated approach takes investors out of the sourcing process. This is good for REITs because you only want to invest in the best properties. However, if you’re looking for individual properties, you definitely want to pull from a wider selection.
As such, when investing in standalone properties, it pays to do your own research and form your own connections. Get a real estate agent who is a shark with a nose to the ground (pardon the mixed metaphor) to help you discover lucrative new opportunities.
Pros and Cons
Pros:
- Low barrier to entry
- Diverse offerings
- REITs and direct investing opportunities
- Accredited and non-accredited opportunities
- User-friendly platform
- Monthly auto investing at just $250 per month
Cons:
- High minimum investment of $5,000
- Direct investing is only open to accredited investors
- Fees range depending on how much you invest
- The platform doesn’t integrate with third-party financial management apps
Alternatives to RealtyMogul
Fundrise
Fundrise is a leading crowdfunding provider with a reasonable minimum investment of just $500. Like RealtyMogul, Fundrise is geared towards average investors seeking easy access to the real estate market.
Learn More:
Roofstock
Roofstock offers investors the opportunity to invest in single-family rental properties across the U.S. The platform comes with a $5,000 minimum investment and no management fees. Each property on Roofstock is carefully vetted, and it offers an excellent opportunity to diversify your portfolio.
EquityMultiple
EquityMultiple offers professionally managed commercial real estate opportunities. The platform enables investors to invest in funds or direct real estate opportunities. It also offers tax-deferred investing. Unlike other providers, EquityMultiple focuses heavily on institutional commercial real estate.
Learn More:
Frequently Asked Questions
Can RealtyMogul increase your net worth?
Investing in RealtyMogul is a great way to increase your net worth. It’s a pretty low-risk investment platform, and you’re most likely going to make money over time. The best way to increase your net worth through RealtyMogul is to set up an auto-investment plan and track it as time goes on. Watch your net worth increase as your money grows and your cash flow pours in.
Is it better to invest in REITs or individual properties?
It largely depends on your goals as an investor. Some people are perfectly happy investing in REITs, while others prefer to invest directly in properties because they have more control over their investment. Just keep in mind that investing directly in a property is a bit riskier.
Suppose you buy a multifamily house, and something happens to it—a fire, flood, earthquake, tornado, hurricane, or a destructive tenant. You don’t have to worry about these types of issues when investing in REITs.
So, just because you have the money to put a down payment on a piece of real estate doesn’t mean you necessarily should.
Think about what you want to get out of your real estate investment. If you’re looking for quick gains and no hassle, look into REITs and check out RealtyMogul. And if you’re accredited, check out their direct properties as a way to invest in specific properties with less risk.
Do you have to use real estate crowdfunding platforms to invest in REITs?
You don’t have to use crowdfunding platforms like RealtyMogul to invest in REITs. You can access many of them through any leading broker like Schwab or Fidelity. In fact, many investors prefer this approach because it’s more direct and you can see all your investments in one convenient dashboard.
Does RealtyMogul invest in multifamily homes?
Various crowdfunding platforms tend to focus on different market subsets. RealtyMogul tends to lean heavily on multifamily residential real estate with strong cash flows. So, if you don’t want to invest in that type of market, this platform may not be for you.
The Bottom Line
RealtyMogul is great for investors who have the risk tolerance for commercial real estate investments.
If you’re looking for crowdfunded real estate opportunities to boost your annual income, then RealtyMogul is a top investing platform you should consider. It offers passive income and long-term investment options. On top of that, the platform has a proven track record of success.
Of course, it’s important to do your due diligence in this market and select a crowdfunding platform that meets your specific needs. Always read the fine print and know what you’re getting involved with ahead of time.
What’s more, you should make sure the platform supports the property types you’re looking for.
Ultimately, all investors should use real estate to boost their personal finance situation. Are you ready to make your initial investment in real estate? Take your time, weigh your options, pick an investment that works for you, and your money can start growing right away!
No comments yet. Add your own