One of the most well-known commercial real estate crowdfunding platforms available today is RealtyMogul. Thousands of investors have used the platform to diversify their portfolios with real estate.
Is RealtyMogul the best method for you to invest in real estate? Let’s find out in this review.
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 to some of the most frequently asked questions regarding RealtyMogul and real estate in general.
RealtyMogul is a course that teaches you about real estate investing.
If you’ve read my other articles on real estate investing, you’ll know there are 3 primary ways to invest:
Wholesaling, buy-and-hold, and flipping.
While they each have their pros and cons, there is a ton of potential for success in investing in real estate.
Real estate has created some of the largest fortunes in world history.
That being said, you should take some time to seriously think about something:
Is now the best time for YOU to get into real estate investing?
Because despite the potential upside, investing in properties or land takes a lot of capital, and is very labor intensive.
That means if you:
- Have less than 3 hours per day, OR
- Aren’t sitting on $20K+ in disposable income
This may not be the best time for you to start investing in physical real estate.
Don’t get me wrong, real estate investing can be an amazing way to protect your assets while generating cash – but there’s a time and a place for it.
But there’s good news!
All you need is a system to generate the cash (& free time) you need to be ready for real estate investing.
My preferred method of getting there is by becoming a Digital Landlord
It takes the benefits of real estate investing, but removes many of the barriers (& annoyances), like:
- Small cash flow on properties
- Having to take out debt
- Dealing with repairs and upkeep
- Dealing with tenants
The cool part is that the income is mostly recurring (AKA semi-passive).
You could make anywhere from $2,000-$10,000+ per month doing it.
You can build it as big (or small) as you feel like, without the annoyances I listed above.
If that sounds interesting, you might want to think about becoming a Digital Landlord.
Then, you can take the profits and start investing in physical real estate a year or two from now.
If you wanna see what RealtyMogul looks like on the inside, keep reading.
What Is RealtyMogul?
RealtyMogul is a commercial real estate crowdfunding platform that was founded in 2013. The investment platform has allowed both large and small investors to invest in privately held real-estate investment trusts (REITs) since 2014. In addition, accredited investors are also allowed to take part in private deals.
RealtyMogul enables investors to finance deals worth millions despite the $5,000 minimum up-front payment. It provides an overview of the commercial real estate market for regular investors.
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 wanting to become a more passive real estate investor. 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?
The company was founded in 2013 by Jilliene Helman, and as of this writing, it has more than 12,000 active certified investors who have put more than $36 million into close to 100 properties. Having raised more than $10 million in venture capital, RealtyMogul now ranks as one of the best-capitalized companies in its field.
Who Is Eligible To Invest In RealtyMogul?
RealtyMogul accepts accredited and non-accredited investors, unlike most commercial real estate crowdfunding platforms. The site’s proprietary REITs are open to non-accredited investors. These REITs are privately owned and not traded publicly. This generally implies that your funds are permanently locked.
On the other hand, RealtyMogul offers to purchase shares once every quarter (after a 12-month investment period) at the current share price. Since they lack short-term liquidity, many REITs have medium-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 residence).
- You have a trust with assets worth more than $5 million.
Product Offerings Of RealtyMogul
RealtyMogul offers many different ways to invest. Either directly in an asset or through one of their REITs are options for investing.
Direct investments from multi-family homes to commercial properties are available with RealtyMogul. Debt or preferred stocks are also options for investment. Usually, accredited investors can 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?
Investors can choose from a range of commercial real estate projects with RealtyMogul. Examples include multi-family housing, office buildings, industrial locations, self-storage, retail, and healthcare facilities.
When you invest, you usually purchase 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 records 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)
- Commercial real estate investments do not necessitate capital calls or 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?
You must review the fine print on each offer or in the REITs to determine RealtyMogul’s fees. The expected net fee for MogulREIT II is 5.8%. Therefore, $0.942 out of every dollar will be put to good use. Additionally, the plan sponsors are required to cover some fees and costs related to 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. However, the lowest minimums on Realty Mogul investing packages 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
Regarding 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 their shares at a loss to take advantage of this opportunity. Furthermore, any buybacks are at the discretion of RealtyMogul and may be constrained by capital availability limits.
RealtyMogul buys investments back at a predetermined percentage rate when investments are accepted. The figure is determined by the lower two factors: the current net asset value and 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%.
- 99% 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 wise to get paid and lose 1% or 2% of your buying price. This is still some nice flexibility in emergencies 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).
Realty Mogul publishes aggressive return targets for its investment packages. However, it’s 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 range from 7.7% at the low end to 8% at the top. 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% since January 2018. These performance data, like those for MogulREIT I, are net profits after fees.
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’s 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% of total property equity value, respectively.
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.
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’s 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 before deciding on a platform to invest in, whether it’s RealtyMogul or not. As usual, do your homework and consider your options before making a final decision.
Is RealtyMogul Publicly Traded?
It’s a public non-traded REIT, which implies that it’s 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 choose 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 you cannot easily sell the assets.
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, location, timeline, handled property, 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 can withdraw your investment returns or have them automatically reinvested.
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.
Many people are happy with RealtyMogul because it enables non-accredited investors to benefit from many of the same opportunities as accredited investors without having to keep a net worth of $1 million, exclusive of the value of their property.
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’s also considerably more accessible than some other equity crowdfunding sites.
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 me, 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.
Alternatives To RealtyMogul?
Yes, there are plenty of other business models to choose from if you want to pursue making money in 2022. Here are just a few:
Is RealtyMogul A Scam?
So, time for the $1,000,000 question – is RealtyMogul a scam?
No, not technically. You can 100% make money with this program, though it’s not nearly as simple as they make it seem.
As with most businesses, there is A LOT of work to be done upfront & no guarantee of you being successful.
Not to mention the profit margins are typically pretty small.
Don’t get me wrong, I’m a big proponent of front-loading work now, so you can reap the rewards later.
But if I’m gonna do that, I want the rewards to be HIGH and virtually guaranteed.
I’d rather put in that same 3 months of work (in my spare time) & build a handful of Digital Rental Properties that each produce $500-$2,000 checks every single month afterward (AKA recurring income).
And the cool part is that you can do it in a lot less time than 3-months (I personally did it in my first 2 weeks of being a Digital Landlord).
Unlike physical real estate, you can do it from anywhere in the world, so it’s a genuine “laptop-lifestyle” business.
All you need is an internet connection.
Some of my friends are Digital Landlords that run their 6-figure businesses from:
- Camping trips at national parks
- Beachfront in Hawaii
- On the road in a camper van (with a pet pig!)
They focus on living an enjoyable life first, and focus on income second. All thanks to this program.
They can take weeks or months off, and money keeps rolling in.
Living happily is the top priority.
If the thought of living perpetually at your dream vacation spot interests you, being a Digital Landlord might be for you!
What Is My Top Recommendation For Making Money Online In 2022?
I’ve personally tried all of the major online business models:
- I’ve sold fidget spinners through Amazon FBA
- I’ve drop-shipped a toilet bowl putting green on Shopify
- I’ve sold women’s health supplements via Clickbank affiliate marketing
And I made money with all of them, so trust me when I say: there is no “perfect” business model.
It’s worth noting that I FULLY endorse real estate investing as a way to grow wealth, and that’s why I invest my own money in commercial and residential real estate.
That being said, my #1 recommendation for making real money online as a beginner is, hands-down: being a Digital Landlord.
Whether you’re a complete newbie, or you’ve been around the block before but have never had that “big win” to propel you forward, becoming a Digital Landlord is for you.
Time: If you’ve got a spare hour-or-two each day, you can do this. If you want to drop everything and go all-in, you can do this. More time obviously means faster results, but even putting in a few hours per day is enough to see real success.
And because of that flexibility, you don’t need to trade your time for money. Once the income starts, it’s recurring.
That means you can take a month off, travel the country, pursue a passion project, chill on the beach, or charter a boat across the world.
But you can only do that once you’ve created an income stream that doesn’t require YOU to be there all day, every day.
Real estate investing is a FULL-TIME JOB. If you stop finding deals, your money dries up.
Ownership & Control: Unless you’re buying your properties in cash, you don’t technically own the properties – the lender does.
If you miss a single payment, the property can be taken from you.
Why pour your soul into a business that could be taken away from you at the drop of a dime?
When you’re a Digital Landlord, you literally own all of the assets, which means you have ultimate control.
Ongoing costs: With real estate, profit margins are actually pretty slim. Real wealth is made in owning the assets, and owning A LOT of them.
Being a Digital Landlord, your profit margin is nearly 100%. Watch here to learn how.
Just a reminder: these Digital Rental Properties are worth (at a minimum) $500/mo in semi-passive income. And each time you create another one, your income increases, and the effort put into creating the next property decreases.
Best-case scenario, you have properties bringing in over $3,000+/mo on auto-pilot.
It’s Effectively Copy-Paste: Here’s my favorite part: once you have your first Digital Rental Property up, you can literally copy-paste another version of it and find another willing “renter” in a few days. DOUBLING your income doesn’t get much easier than that…
If you wanted to double your income with real estate investing, you would need twice as many properties, or double your profit margins on each property. And I can guarantee you, that’s a lot harder than a few clicks & a phone call.
Make Money Helping Real People: When you’re a Digital Landlord, you’re helping solve REAL problems that people are ASKING for help with:
Small local businesses around the world need one thing: customers. Without them, their business would fall apart. If you can provide those customers, they’re going to be really happy – and they’re going to pay you for it.
You’re helping a struggling mother or father put food on the table for their families, put their kids through college, or simply live life a little bit more comfortably.
Having this type of impact on the world is what will help you sleep soundly at night.
So, the rest is up to you. You could keep looking at other opportunities like RealtyMogul, which might make you money.
You could keep researching and researching for the next few months (or few years), never making a concrete decision.
OR, you can look deep inside, think about those dreams, hopes, & desires, and make the decision to ACTUALLY make it happen, just like it has for thousands of other students before you.
Making a fortune while actually helping real people that need it.
If this sounds like you, click here to see how it all works.