Invest directly in commercial real estate through this crowdfunding platform.
RealtyMogul is an online real estate marketplace where both accredited and non-accredited investors can invest in real estate. Non-accredited investors can only invest in two REITs, while accredited investors can choose from multiple investment options. Entry requirements are $5,000 for non-accredited and $25,000 for accredited investors, which is higher than competitor platforms.
- Consider RealtyMogul if you want to invest in real estate for the long term.
- Look elsewhere if you want to invest less than $5,000 or if you want to be able to sell your investment within your first four years.
How does RealtyMogul work?
RealtyMogul offers a wide range of commercial real estate investments including office buildings, industrial sites, multi-family dwellings and self-storage facilities. It also offers two real estate investment trusts (REITs) for non-accredited investors. This is how RealtyMogul works:
- The company vets real estate properties until it finds one that passes its underwriting process. These investments are either equity or debt investments.
- RealtyMogul releases approved investments to investors.
- Fill out an online application when you’re ready to invest.
- Keep track of your investments and the distributions RealtyMogul releases on a recurring basis.
Commercial real estate properties typically have a minimum investment ranging from $15,000 to $50,000. REITs have a minimum $5,000 investment.
The difference between public traded REITs and non-traded REITs
Real estate investment trusts (REITs) can be either publically traded on the stock market or privately traded on a real estate platform. You can buy and sell the first on the stock market like you would any company. This makes them highly liquid, meaning you can sell your investment whenever you want without a penalty or restrictions.
Privatly-traded REITs, on the other hand, are available only to select investors. This type of REITs is offered by RealtyMogul and they are highly illiquid. This means, you can’t sell your investment whenever you want without paying penalties.
Who is RealtyMogul best for?
RealtyMogul could be a solid option for:
- Accredited investors. The platform offers multiple investment options to accredited investors — those who have a minimum net worth of $1 million or earn $200,000 annually, or $300,000 annually for couples.
- Investors seeking REITS. The platform offers REITs for all investors, including non-accredited investors. But you need at least $5,000 to start investing and you can only chooses from two RealtyMogul REITs.
- Long-term investors. Direct investments are typically held for at least 10 years. That’s when you can get the highest value and sell your investment without any fees.
Fees and cost
RealtyMogul’s investment options aren’t fee-free. Depending on the type of investment, you could pay:
- 1% annual asset management fee for REIT investments.
- Up to 2% disposition fee of the contract sales price for each property — equity assets only.
- Undetermined amount, which is disclosed on a deal-by-deal basis — equity assets only.
However, you could also pay fees if you want to withdraw your funds before a certain time frame.
|Share Repurchase Anniversary (Year)||Effective Repurchase Rate(1)|
|Less than 1 year||No Repurchase Allowed|
|1 year until 2 years||98%|
|2 years until 3 years||90%|
|3 or more years||100%|
Pros and cons
In addition to recurring monthly, quarterly or semi-annual distributions, RealtyMogul has the following benefits:
- Tax deductions. Those who invest directly in real estate can write depreciation off on their taxes.
- Pre-vetted investments. RealtyMogul has one of the most strict vetting procedures that you can find in an online real estate marketplace platform.
- Can use IRAs. Use your self-directed IRA to invest in REITs or real estate through RealtyMogul. However, the custodian must be able to process documents via electronic signatures and process contributions and distributions via ACH transfer.
Potential drawbacks of RealtyMogul include:
- Variable Fees. Watch out for fees that vary depending on investment type. Fees range from 1% for REITs and higher for other types of investments.
- Illiquid. RealtyMogul’s investments are long term. You can sell your holdings before four years have passed, but you’ll pay fees. Most holding periods are three to 10 years.
- Direct investments for accredited investors only. All investors can invest in REITs, but only accredited investors can invest directly in real estate.
Compare with other real estate investing platforms
If you think $5,000 is too high or if the two REIT options for non-accredited investors is not enough of a variety for you, consider other real estate platforms.
How do I sign up?
Get started with RealtyMogul in five steps:
- Go to the RealtyMogul website and click Join.
- Choose whether you’re joining as an individual investor or a real estate company. Click Continue.
- Enter your name, email, phone number and password. Click Continue.
- Verify your email address and click Continue.
- Add your net worth and annual income for the past three years.
You must meet the following requirements to open an account with RealtyMogul:
- At least 18 years old
- Minimum $5,000 deposit for REITs
- Minimum $15,000 deposit for direct investments
- US or international resident
- Accredited investor for direct investments; all investors can participate in REIT offerings.
Have the following information on hand when opening your account:
- Social Security number
- Physical address
- Government-issued ID number
- Net worth
- Annual gross income for the past three years
Accredited investors should have this additional information on hand:
- Tax returns
- Investment account statements
- A third-party confirmation from an accountant or broker
RealtyMogul customer service
RealtyMogul’s hours of operation are weekdays from 9 a.m. to 5 p.m. PT. Get support from its customer service team by:
- Calling 877-977-2776
- Emailing email@example.com
- Clicking the Support button on the RealtyMogul website
- Visiting its headquarters at:
REALTY MOGUL CO, #603 10573 W PICO BLVD. LOS ANGELES, CA 90064
Is RealtyMogul legit?
RealtyMogul was founded by Jilliene Helman and Justin Hughes in 2013 and is headquartered in Los Angeles, California. The site has an A+ rating based on the Better Business Bureau’s internal criteria but it’s not accredited yet. As of July 2021, there are no complaints with the Consumer Financial Protection Bureau.
RealtyMogul reviews and complaints
As of July 2021, RealtyMogul has one review on Trustpilot and no reviews on BBB. The one reviewer gives RealtyMogul two stars and claims that even after four years of holding their investment, they didn’t have any returns on investment.
On the other hand, Reddit users love RealtyMogul’s thorough vetting process claiming the site “does better due diligence on sponsors and after investment monitoring.” But users also think the platform’s high fees and low liquidity are drawbacks.
I’ve signed up with RealtyMogul. Now what?
Now that you’ve signed up with RealtyMogul, make the most of your experience by:
- Scheduling a phone call. Set up a five-minute phone call with a RealtyMogul representative and get your questions answered.
- Funding an investment opportunity. Search available investments until you find one you’d like to fund.
- Tracking your investments. Log into your RealtyMogul account regularly to track your progress.
- Exploring the Knowledge Center. Learn about topics like REITs, commercial real estate, passive income, building wealth and more.
If you’re an investor looking to invest in REITs or an accredited investor wanting to invest directly in commercial real estate, RealtyMogul may be for you. But if you’re interested in other types of real estate or investment opportunities, explore other investing platforms before you decide to open an account.