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RealtyMogul

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By: Scam Risk - Expert Reviewer

RealtyMogul Review 2021: Best Real Estate Investment Trust?

RealtyMogul is one of the most popular commercial real estate crowdfunding platforms in the industry today. Hundreds of thousands of investors have utilized the platform to diversify their portfolios by adding real estate exposure.

Is RealtyMogul the ideal approach for you to invest in real estate? This review will find out. 

This review will go over RealtyMogul to see if it really is the best real estate platform out there.

You’ll learn whether real estate is the right online business for you.

And at the end, you’ll find answers some of the most frequently asked questions regarding RealtyMogul and real estate in general.

But most importantly, you’ll see the exact system many others have used to build their own internet marketing business to over $40,000 a month in mostly passive income.

This system made them swear off real estate for good, because it uses some of the same skills but in a much more powerful and profitable way!

Pros:

  • Safe investment options
  • The minimum investment is low
  • Options for disbursement: withdraw or reinvest
  • Personal information is kept secure
  • Easy to use platform
  • Non-accredited investors can also invest

Cons:

  • Investments are not liquid
  • There aren’t as many investment options as there used to be
  • Variable fees: RealtyMogul does not charge a fixed cost

Table of Contents

What Is RealtyMogul?

Founded in 2013, RealtyMogul is a commercial real estate crowdfunding platform that was. Since 2014, the investment platform has allowed large and small investors to invest in privately held real-estate investment trusts (REITs). It also enables accredited investors to participate in private transactions.

Despite the fact that investors need to pay $5,000 at a time, RealtyMogul allows them to fund deals worth millions of dollars. It introduces ordinary investors to the world of commercial real estate.

One of RealtyMogul’s unique selling features is that it simplifies investing through a 1031 exchange. If you need to reinvest the funds from the sale of a rental property, you can use a 1031 exchange to invest in RealtyMogul. Simply put, you can delay capital gains on the deal until you sell your RealtyMogul shares. This is a terrific approach for someone who wants to become a more passive real estate investor to get started. Always get the advice of a tax professional before engaging in a 1031 exchange.

In some situations, you can invest in a self-directed IRA through RealtyMogul. However, RealtyMogul does not have a partner for these investments.

When Was RealtyMogul Founded?

Jilliene Helman launched the company in 2013, and it now has over 12,000 active certified investors who have invested more than $36 million in nearly 100 properties. RealtyMogul has raised more than $10 million in venture capital, making it one of the most well-capitalized companies in its industry.

Who Is Eligible To Invest On RealtyMogul?

Unlike most commercial real estate crowdfunding platforms, RealtyMogul accepts both accredited and non-accredited investors. Non-accredited investors are allowed to participate in the site’s proprietary REITs. These REITs are privately owned and not publicly traded. Typically, this means that your money is locked up indefinitely.

RealtyMogul, on the other hand, offers to buy back shares (at the present share price) once every quarter (after you’ve been invested for 12 months). As a result, many REITs have medium-term liquidity but not short-term liquidity.

Individual “equity opportunities” can be purchased by accredited investors. Investors can purchase a stake in an LLC through equity opportunities. The LLC is then the owner of a certain property. Also, these investments are quite volatile. You should not expect to receive your funds until the project has been completed and the LLC has been dissolved.

To qualify as an accredited investor, you should meet one of the following requirements:

You have earned more than $200,000 in the last two years. (Or a joint income of more than $300,000 in the previous two years.)

You have a net worth of over $1 million (excluding the value of your personal residence).

You have a trust with assets worth more than $5 million.

Product Offerings Of RealtyMogul

RealtyMogul provides a variety of investment options. You have the option to invest directly in an asset or through one of their REITs.

RealtyMogul provides a variety of direct investments, ranging from multi-family homes to commercial properties. You have the option of investing in either preferred equities or debt. You must usually be an accredited investor to make these investments.

You can invest in their REIT products as a non-accredited investor (or anyone else who is interested). MogulREIT I and MogulREIT II are two private REITs managed by RealtyMogul.

How Does RealtyMogul Work?

RealtyMogul allows investors to invest in a variety of commercial real estate projects. Multi-family housing, office buildings, industrial sites, self-storage, retail, and medical buildings are a few examples.

When you invest, you usually do so by purchasing shares in a RealtyMogul limited liability company (LLC), which then invests in an LLC or Limited Partnership (LP) that owns the real estate. Investing in this manner reduces overhead for investment sponsors and enables access to more investment choices and streamlined payout and tax reporting via the platform.

The RealtyMogul LLCs are managed by RM Manager, LLC, a wholly-owned subsidiary of RealtyMogul.

The period of individual investments varies according to the investment. Moreover, the normal duration of equity investments is from three to ten years. Distributions from equity investments are typically made quarterly or semi-annually. These are only broad guidelines, and it’s critical to remember that distributions on any investment are never guaranteed.

For income tax reasons, an IRS form K-1 will be supplied each year for each stock investment, detailing the outcomes of that specific investment. The IRS form 1099 is used to record distributions from RealtyMogul’s two REITs.

Advantages of RealtyMogul:

  • Ease of deciding on an investment
  • Quick and simple funding
  • Investing is monitored 24/7
  • Documents can be completed online
  • Dividends for stock investments are made quarterly or semi-annually; distributions for REIT investments are made monthly or quarterly
  • RealtyMogul offers additional investment options than real estate investment trusts (REITs)
  • Typically, commercial real estate investments investments do not necessitate capital calls, which are requests for additional funds above and beyond the initial investment
  • Individual investments are “pre-vetted,” which means that the platform does extensive underwriting to determine the profitability of each transaction.
  • Invest in both investments (only accredited investors) or in two different REITs (all investors)

What Are the Charges?

To figure out RealtyMogul’s fees, you must read the fine print on each deal or in the REITs. The MogulREIT II anticipates a net fee of 5.8 percent. This means that $0.942 of every dollar will be put to good use. The plan sponsors must also pay certain fees and expenditures linked with the REITs.

Investors interested in equity investments can learn about each project’s fee structure (including management fees).

This is a lot like other RealtyShares options.

Minimum Investment For Real Estate Investment Trusts

The minimum investment for each investment will be different. The lowest minimums on Realty Mogul investing packages, however, are roughly $5,000. Take a close look at the prospectus materials for each investment to validate investment minimums.

Buy Back Programs For Commercial Real Estate Investing

In terms of liquidity, most real estate crowdfunding platforms lock your money away for at least a few years. This is especially true for RealtyMogul, as public, non-traded REITs are illiquid investment vehicles. RealtyMogul, on the other hand, distinguishes itself by a repurchase program that allows some shareholders to sell their stakes in MogulREIT I and II back every quarter after at least 12 months from their first investment. However, investors will have no choice but to sell your shares at a loss in order to take advantage of this opportunity. Furthermore, any buybacks are at the discretion of RealtyMogul and may be constrained by capital availability limits.

When investments are accepted, RealtyMogul buys them back at a predetermined percentage rate. The figure is determined by the lower of two factors: the current net asset value or the acquisition price. These percentages change based on how long it has been since you made your investment:

  • For fewer than two years, the rate is 98 percent.
  • 99 percent for a period of two to three years
  • 100% for three years or more
  • 0% for investments lasting less than a year

It may not be pleasant to obtain compensation and lose 1% or 2% of your buying price. This is still some nice flexibility in emergency instances if an investor has to quickly access large sums of capital. Thus, you should only invest in a RealtyMogul REIT that you can afford to buy and hold for the full liquidation time, whatever that may be (usually 3 years or more).

Target Returns

Realty Mogul publishes aggressive return targets for its investment packages. However, it is important to note that the actual return on any property investment may vary. There are no promises that you will receive a return on your investment or even that you will break even after the investment term is up—you may actually lose equity on a property after fees are deducted. RealtyMogul has shared the following goals:

Private placement investments: These are investment possibilities that are set up to pay out on a monthly or quarterly basis. Annualized returns might range from 0% to 15% per year, depending on the investment type and company plan. These placements may not be suitable for you if you do not have a high-risk tolerance for property investing.

MogulREIT I Returns: This publicly listed, non-traded REIT has traditionally provided monthly payments. Annualized return rates have ranged from 7.7 percent at the low end to 8 percent at the top end. These are net returns after fees have been deducted.

MogulREIT II Returns: This REIT, which concentrates almost entirely on multi-family equity property investing, pays weekly, with historical performance corresponding to an annualized 4.5 percent since January 2018. These performance data, like those for MogulREIT I, are net profits after fees.

Fee Schedule

Each of RealtyMogul’s asset classes is subject to its own set of fees. Fees are also associated with specific investment opportunities within each asset class. As a result, it is critical to read the Offering Circular of each investment before signing on the dotted line to determine which costs you will be asked to pay. While these costs vary, a private placement investment is normally around 1%; MogulREIT I and II impose fees of 1% and 1.25 percent of total property equity value, respectively.

Customer Support

RealtyMogul provides regular client service. Not only does the company provide a comprehensive FAQ for self-service, but it also provides phone and email help every day during regular business hours.

Track Record

RealtyMogul was founded in 2013, making it one of the more recent entrants into the real estate crowdfunding sector. This implies that, while its initial reporting showed strong growth in its investments, it is still a relative newbie, with a track record as an investing platform that has yet to emerge.

As a younger platform, it may carry a higher level of risk than older, more established platforms. However, there’s no such thing as a risk-free investment. In any case, it’s always a good idea to look at real estate crowdfunding in general before deciding on a platform to invest in, whether it’s RealtyMogul or not. As usual, do your homework and consider all of your options before making a final decision.

Is RealtyMogul Publicly Traded?

It is a public non-traded REIT, which implies that it is registered with the Securities and Exchange Commission or SEC but is not traded on stock exchanges like publicly listed REITs.

How Much Can You Make From RealtyMogul?

Trying to figure out how to invest money is a risky endeavor regardless of what you select to invest in. When you put your money in illiquid assets, such as those supplied by RealtyMogul and real estate in general, you are taking on more risk because the assets cannot be easily sold.

However, potential returns with RealtyMogul may be attainable. MogulREIT I has typically paid out annualized distributions of 6.00 percent of NAV (net asset value) after expenses. MogulREIT II has typically made annualized dividends of 4.50 percent of NAV net of fees. Despite this tendency, RealtyMogul states that these distributions are subject to change at any time and that returns are not guaranteed.

The return on certain properties will vary according to the property, its location, the timeline, how the property is handled, and other factors. These elements are tough to estimate effectively in advance because real estate values fluctuate with the economy.

How Do I Withdraw Money From RealtyMogul?

The funds have a one-year lockup period during which you cannot withdraw your money, which is longer than the industry average ( the average fund has no lockup). The withdrawal fees are as follows:

  • One-year lockup
  • From one year to two years, there is a 2% cost.
  • From two to three years, there is a 1% fee.
  • There is no cost if you stay for three years or more.

You have the option of withdrawing your investment returns or having them automatically reinvested.

Can You Make Money With RealtyMogul?

Yes, you can!

But there are many preferred equity investments out there.

There’s a lot that comes along with real estate that many people struggle with.

Now, don’t get the wrong idea…

It’s not impossible to make money with real estate, but if you’re gonna put in the amount of grueling work to do this business (which, trust us, isn’t easy), you might as well bring in some REAL money while you’re learning the ropes.

The program that helped skyrocket many online businesses to over $40,000+ per month is so simple that making money really does become second nature.

Is RealtyMogul A Scam?

RealtyModul is a legit investment opportunity.

It is entirely possible to build a profitable, successful real estate business… But there are better ways to build a business other than with real estate.

Our #1 pick proves this.

Is RealtyMogul Legit?

RealtyMogul is a legit real estate investing platform.

But, when it comes to building a business, you have plenty of options.

And even if you’re dead set on becoming a realtor, you’ve got way better options than RealtyMogul.

Keep in mind, I don’t get paid to promote any of the programs I review. I personally think real estate is a great business model, but you could end up leaving way too much money on the table.

This RealtyMogul review highlights many positive aspects of this personal finance crowdfunding platform.

Final Verdict

RealtyMogul receives the approval of many people for allowing non-accredited investors to take advantage of many of the same options as accredited investors without having to maintain a net worth of $1 million excluding the value of their home.

A non-accredited investor must remain qualified by the platform in order to participate in real estate investing. However, while investing in real estate products or services as a means of making money is traditionally reserved for those with really deep wallets, RealtyMogul allows individuals of all stripes to participate in real estate investment trusts (REITs).

With a $5,000 minimum investment in these long-term property deals, it is also considerably more accessible than some other equity crowdfunding sites.

What Is Our Top Recommendation For Making Money Online In 2021?

Where this RealtyMogul falls short, in my opinion, is in scalability.  Because in order to make a good amount of money with real estate, you have to own several different houses.

And who has that kind of capital to start?

But what if you went local?

With Local Lead Generation, you will be getting service requests from multiple sites at every minute of the day from people who are willing to pay a lot of money for what you can provide them.

I was watching a YouTube video once where the host made a comment that it isn’t about making a lot of money from one website… it’s about making a little bit of money from lots of different websites.

So, think of it this way….

What if you could have streams of investment income where you operated 10 rental units that you could charge anywhere from $750-1,000 per month?

That’s $7,500-10,000 per month in passive income!

What If You Invested Into 100 Rental Units?

But instead of spending $Millions to build houses or apartment complexes… you spend a couple hundred dollars to build websites.

You then get those websites ranked in the search engines for specific home-based services that customers are searching for.

Next, you offer your lead generation system to local business owners who are looking for customers and are willing to pay you for their information.

And Then…

BAM!

You’ve just created a Digital Real Estate Investment Empire that is potentially earning you 4-5 figures in PASSIVE INCOME on a monthly basis without spending a single dime on ads.

With conventional digital real estate, you have to compete with thousands, if not millions of others who are selling the SAME product to the SAME customers.

Once the training program is completed you will also have access to a Facebook group much better than the RealtyMogul group in our opinion. This group is much more active.

Unlike RealtyMogul, where you’re profiting maybe $250 per property, you could be getting 5-10X THAT.

With Local Lead Generation, the competition is virtually nothing and your profit margins are 85-90%.

Now, I could go on and on, but I’m sure you have tons of questions about how to create Digital Real Estate assets and start building YOUR digital empire!

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