RealtyMogul Review 2022: Is Commercial Real Estate Investing for You?
Range of Investment Opportunities
Variety of Properties
- Allows non-accredited investors to dabble in real estate investment trusts
- High rates of return
- Has automation features, making the investment process straightforward
- Due diligence for investment opportunities
- High investment minimums
- Limited track record
- The fee structure varies by investment type and is complicated
RealtyMogul is a crowdfunding and real estate investing platform where accredited and non-accredited investors can find commercial real estate opportunities for investment online. The website claims to have offered $4.7 billion worth of property.
Previously, the platform offered high-risk properties, such as hotels, but things have changed. Today, all investment opportunities on RealtyMogul undergo a thorough due diligence process, and the platform vets all sponsors.
A Shift in Business Approach
After losing investors’ money in renovation and hotel acquisition deals, RealtyMogul shifted to opportunities offering more consistent cash flow. An excellent example in this regard is apartment complexes with tenants already occupying all units.
The investments on RealtyMogul come from two sources:
- Developers who submit deals to the platform. Then, RealtyMogul performs due diligence before approving the investment.
- The platform also finds investments through real estate veterans on its team.
RealtyMogul currently lists 17 open opportunities for investors and 275 past opportunities.
RealtyMogul has become insanely popular among real estate investors due to its many features.
What RealtyMogul Offers:
- Expansive Reach: The platform is trustworthy for investors because it has raised over $800 million and financed properties worth more than $4.7 billion so far. Also, more than 220,000 members are registered on the platform, while nearly 29,000 apartment units have been financed to date.
- Diversified Portfolio: According to RealtyMogul, investors often overlook the importance of adding commercial real estate to their portfolios. The appropriate allocation of commercial real estate varies based on an individual’s financial goals, income and age. RealtyMogul can help in the process.
- High Investment Minimum: The lowest minimum for any investment on RealtyMogul is $5,000, although the range varies by the investment type.
- Auto Invest: RealtyMogul offers auto investment opportunities for investors interested in its real estate investment trusts — also called REITs — namely, RealtyMogul Income REIT and RealtyMogul Apartment Growth REIT. Investors can watch their investments increase every month without having to manage them directly.
How To Invest With RealtyMogul
RealtyMogul enables investors to invest in different ways, including individual properties and REITs. Both accredited and non-accredited investors can invest, although non-accredited investors are not authorized to invest in standalone deals.
Real estate investment trusts are the key commercial investments on the platform. You can choose to invest in the RealtyMogul Income or RealtyMogul Apartment Growth REIT.
The minimum is $5,000 for either investment, but they have different distribution rates, frequencies and objectives.
Good To Know
The Apartment Growth REIT is a public, non-traded REIT that invests in apartment buildings, and its primary objective is capital appreciation. It has made 16 consecutive quarterly distributions equal to 4.5% annualized, based on purchase price.
The Income REIT is a public, non-traded REIT that invests in a diverse selection of commercial real estate properties, and its objective is passive income. The REIT’s annualized distribution rate is 6%, and those distributions are made quarterly and have been paid over 65 consecutive months.
The individual properties on RealtyMogul require you to be an accredited investor, making $200,000 annually — $300,000 jointly for married couples — or having a net worth of at least $1 million.
You can choose from different properties, such as multi-family residences, industrial properties and offices. The investment terms for individual properties are two to seven years.
1031 Exchange Private Placements
A like-kind, or 1031, exchange lets investors defer capital gains tax on the sale of an investment property when they purchase another investment property within the timeframe established by the IRS. The 1031 exchanges on RealtyMogul allow you to invest amounts of $25,000 to $50 million. These investments come with monthly distribution options, although not all properties meet the eligibility criteria.
How Does RealtyMogul Compare to Its Competitors?
|Fees||Up to 3% for REITS; individual property investment fees vary by investments||0%||3% or $2,500, whichever is greater, for sellers when deal closes; 0.5% or $500, whichever is greater, for buyers when offer is accepted|
|Choice of Investment||REITs, single properties, 1031 private placement investments||REITs||Single-family rental properties|
Although RealtyMogul is a good option for non-accredited and accredited investors alike, DiversyFund is better for people who do not want to pay high fees and prefer lower minimum investments.
The downside of the DiversyFund platform is that it only offers REITs while RealtyMogul also has other investment opportunities. Meanwhile, Roofstock is an ideal option for people who want to single-family rentals with monthly returns.
Is RealtyMogul Right For You?
RealtyMogul is definitely a sure-shot way to expand your access to investments. Moreover, the platform lets you diversify your portfolio even if you already invest in real estate because it offers commercial real estate investing.
RealtyMogul is ideal for non-accredited investors wanting to get their hands on public, non-traded real estate investment trusts and accredited investors intending to add private placements to their portfolios.
Another thing that makes RealtyMogul better than its competitors is the wide range of investment opportunities. Even if you do not want to invest in REITs, you can still leverage the potential of individual properties and private placements as long as you qualify for accreditation.
The only thing holding you back may be the high investment minimums. But if you want to earn big, you have to invest big — but not bigger than you can afford to lose.
Daria Uhlig contributed to the reporting for this article.
This article has been updated with additional reporting since its original publication.
Editorial Note: This content is not provided by RealtyMogul. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by RealtyMogul. Information is accurate as of April 21, 2022.
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- Business Insider. 2021. "RealtyMogul Review: Commercial Real Estate Investing With a $5,000 Minimum."
- RealtyMogul. "The Definition of Like-Kind Property in a 1031 Exchange"