Table of Contents
Last Updated: November 19, 2020
RealtyMogul offers small to medium investors access to real estate investments with higher liquidity potential. Instead of tying your money down for five to 10 years, the platform offers a unique buyback program.
By using crowdfunding, the firm keeps the minimum investment low. This allows smaller investors to combine the best of traditional and modern portfolio theory.
Property investment is a traditional approach to wealth generation, while crowd-funding lowers the barriers to entry for those brand-new to investing.
Is this the modern approach to investment management for digital natives, or is it too risky? In this RealtyMogul Review, we’ll look at the pros and cons of investing with this platform.
- Available to both accredited and nonaccredited investors
- Unique buyback program for additional liquidity
- Good rates of returns
- Simplified investing through passive asset allocation
- Low money contribution to get into the property market
- RealtyMogul fees change per investment
- Capital isn’t secure
- The minimum investment is $5,000
Asset Management Fee:
REIT Management fees:
0.50% to 0.60%
What Is RealtyMogul Best For?
RealtyMogul centers on non-traded REITs for the most part. These investments are best for investors with higher risk tolerance. The profit potential is higher, but so is the risk.
Many investors prefer the higher liquidity of traded REITs. RealtyMogul offsets liquidity issues by providing a buyback program.
If you wish to add property assets under management but don’t know how to invest in property, the $1,000 minimum investment makes this relatively affordable. It’s also a viable option for those who don’t want active asset allocation, nor wish to deal as much with portfolio rebalancing or financial planning.
It’s best for investors that want to turn over their property portfolio to a team of professional investment advisors.
- Non-accredited investors who’d usually not have access to non traded REITs.
- Private investors that want to access private placements
- Those with moderate to high-risk preferences
Everything you need to know about investing with RealtyMogul:
The base minimum is $5,000, but this varies depending on the investment opportunity. Some REITs require a higher buy-in.
Setup & Ease of Use
RealtyMogul reviews agree that setting up an account is easy. We agree. You must be:
- Over 18
- Able to provide proof of identity & address and
- Proof of income or proof that you’re an accredited investor
Note that foreign investors are subject to different regulations and so may have to provide additional information.
It’s simple to register. Just go to the website and hit the “Get Started” button. Enter your full name and surname, email address, phone number, and password. Submit these details and then check your email for the verification code.
Once you enter the code, you’ll go through to the next stage of the process. Here the company will establish your investment profile. You’ll provide details of your current income and income for the last two years.
When you’ve set up your profile, you’ll be able to browse the investment opportunities.
RealtyMogul offers the following types of portfolios:
RealtyMogul REIT investments fall into one of two categories. Both are public nontraded REITs, but the focus is different.
If you’d like to invest in commercial real estate, this could be the right choice. This portfolio is registered with the SEC but isn’t available on stock exchanges. Most options here pay dividends monthly.
Historically, the dividends range from 7% to 8%.
The focus here is on multifamily apartments rather than commercial properties, while the dividends are paid quarterly. The returns have averaged out at 4.5% annually for the last few years. The benefit is that capital growth tends to be higher.
Joint Venture Equity Investments
Open to accredited investors only, these give you access to private placements. Such investments may be exempt from SEC or state registration, so investors should approach with care. The properties cover a range of types, such as industrial, commercial, self-storage, retail, medical, and multifamily.
You become a shareholder in RealtyMogul LLC. The company then invests in the project under its name.
Distributions are typically paid quarterly, although this might vary depending on the project. The target goal is an annual minimum return of 15%.
Another option only accessible to accredited investors, 1031 exchanges are a complex instrument. They’re designed to defer the capital gains tax when you sell a property. We’re not going into full details here, because this is something that you should discuss with your CPA first.
Once you’ve registered, it’s simple to select and view your investments. The dashboard allows you to keep a constant track of each project’s performance. Should you wish to avail of the buyback offer, you can do so from the dashboard.
The system will alert you to the penalties for pulling your money out before you’re supposed to.
Generally speaking, you won’t pay penalties if your money’s been invested for at least three years. It’s wise to check the terms for each investment because that doesn’t apply across the board.
These are the most important RealtyMogul features:
Automated Investment Management
The firm offers automated investments in the form of recurring payments. This type of investment doesn’t lend itself toward quick rebalancing, so a robot advisor would be a waste. The closest you get is when you first set up your account.
The online wizard helps you narrow down your investment goals. It takes your current income, risk preferences, and future income into consideration to do so.
RealtyMogul Reviews indicate that the employees are easy to talk to. You may call in or email if you need financial advice about one of their products. They’re willing to talk you through whether or not it’s the right choice for you.
REIT Buyback Program
The RealtyMogul Redemption Program is what sets this investment apart. You’re locked in for the first year, but after that, the company will consider buying back your investment.
Why is this unique?
With most investments of this type, your money is inaccessible for several years. Some REIT programs allow investors to apply for their money early. Such applications are typically only considered once a quarter, however.
Whether or not you’re able to redeem your investment is at the company’s sole discretion.
With RealtyMogul, things work differently. You may apply any time after the first year. The amount they’ll pay you will depend on the lower of the net asset value or the purchase price.
If you try to cash out during the second year, you pay a 2% penalty.
If you try to cash out during the third year, you pay a 1% penalty.
After three years, there are no penalties.
Be warned: The company pays out as long as there’s enough cash to do so. So far, they’ve been true to their word but look at this as a three-year minimum term to be safe.
RealtyMogul Reviews are largely positive, so it’s hard to find some cons. Of course, since you deserve the best information, we went digging for dirt.
$5,000 Minimum Investment
In property investing, $5,000 is nothing. That’ll barely even buy you a nice garden shed. That said, you’re a new investor with only a little to spend, that $5,000 might as well be $5,000,000.
For the smaller investors, the $5,000 will represent a large chunk of their portfolio. Given the higher risk of such investment, it’d be better to diversify a bit first.
No Set Fees
The team negotiates property financing directly with the developers. Different deals require varying levels of effort on the part of the team. The fees change accordingly. While understandable, this is somewhat annoying.
Capital Isn’t Secure
These investments do bear risk. While the underlying property provides some security, something could go wrong. A developer could, for example, go bankrupt and have the property sold to offset debt.
On the upside, you’re only financing a portion of the development, not the whole thing. Investing this way makes it easier to diversify your risks.
It’s fairly easy to get in touch with the company. You may phone them or email them for advice. They offer consultations via both mediums.
We’d have liked to see a chat option on the website, but it’s not a dealbreaker. The employees are knowledgeable and helpful and most queries aren’t urgent.
RealtyMogul provides a wealth of information for those who want to learn more about generating wealth. While there is information on other investments, it’s mainly skewed towards the products that the company offers.
If you’d like to know almost everything about REIT investments, you’re in the right place. Should you need a more generalized overview of all potential types of investing, you’ll have to do more homework.
The knowledgebase provides everything you need to know about using the platform.
Commissions & Fees
The RealtyMogul management fees typically run between 1% and 1.5% per annum. For some projects, additional RealtyMogul fees may apply. Read the fine print carefully before adding anything to your portfolio.
At this stage, there is no RealtyMogul app on either iOS or Android. Is this a negative? Slightly, because it’s fun to check in on your portfolio. Since you will seldom need to rebalance or manage your portfolio, the website is all you need.
Do we give the firm the thumbs up as one of the top apps to make money? Their website works flawlessly, and they’ve got a unique concept. So, yes, we’ll give it to them based on their web app.
RealtyMogul User Reviews
Most reviews are positive. The average RealtyMogul review on Reddit lauds the company as one of the best apps to make money in real estate. The negative RealtyMogul Google reviews are the exception rather than the rule. You’ll be hard-pressed to find a negative RealtyMogul review from 2020.
The company has an A+ BBB rating and no complaints. That’s impressive considering it’s been going since 2012. Clients praise the excellent returns, professional service, and good-quality of investments.
One or two people didn’t understand the terms. The primary complaint is that you can’t withdraw the funds at will or without penalties in the first year.
Is RealtyMogul the Best for You?
Our RealtyMogul review has been primarily positive. The company is committed to vetting potential investment opportunities, and they’ve made it easy for medium investors to access them. We believe that they’ve done an excellent job of choosing winners so far.
That said, proceed with caution. While not a typical property investment, this should still be seen as a three to five-year deal at the minimum. Do your research before putting any money down. Use only money you can forget about for the time being.
RealtyMogul Pros and Cons
|Nonaccredited investors may also invest||The initial investment amount of $5,000 is high for the small investor|
|Higher liquidity than traditional non traded REITs||You don’t actively manage your portfolio|
|Returns good||No flat fee for all account sizes – costs vary per offer|
|Blend of property and equity portfolio||Boring for those who prefer active asset allocation|
|Passive asset allocation makes it easier for less confident investors||Not highly liquid assets|
|Lower than usual minimum investment period and buyback options|
|Minimum balance is affordable compared to buying a property|
|Property investment may offer better capital growth than exchange-traded funds over the long-term|
|Realestate Mogul reviews are good|
|An excellent way to diversify your portfolio|
|Professional asset management team considers investment opportunities as a committee|
|You may cash out early without a massive penalty|
|Person-based service interaction with a financial advisor via email or on the phone|
|Available to foreign investors|
Alternatives of RealtyMogul
How does RealtyMogul stack up against competitors?
RealtyMogul vs. Fundrise
Fundrise is one of the top Realty Mogul competitors. Fundrise is more affordable, with an initial investment of $1,000. The downside is that it’ll only consider withdrawals from the platform once a quarter. They don’t have a buyback program.
Learn more about Fundrise in our dedicated review.
RealtyMogul vs. Worthy Bonds
If you can only dream of having $5,000 to invest, it might help you to start at Worthy Bonds instead. The company allows you to buy bonds for just $10. There is some risk, as Worthy Bonds uses the money to create small business loans.
The upside is that you’ll get a fixed interest rate of 5% per annum. You may also enable the round-up feature, which makes savings simple.
Read more about Worthy Bonds in our dedicated review.
Let’s end this RealtyMogul review on a high note. The company takes low-cost, high quality investing to new heights. Would we like the fees to be lower? Naturally, but they’re a drop in the ocean compared to actively managing a property.
RealtyMogul makes passive property investment a reality through a unique hybrid crowdfunding model. By allowing buybacks and lower than average minimum investments, the company’s cracked the code for success.
What is RealtyMogul?
The company is a crowdfunding hybrid of the real estate investment model. Developers and property owners approach the company for financing. If the company accepts the proposal, they establish a REIT fund. Investors then put in $5,000 or more towards funding the project. Investors receive returns in the form of dividends and capital growth.
Is RealtyMogul a good investment?
The answer is that it depends on your goals and risk appetite. If you can squirrel away the money without accessing it for at least three years, this might be a good option. If you need highly liquid assets, look elsewhere.
Is RealtyMogul worth it?
The Realty Mogul returns so far have ranged between 4.5% and 8%. That’s not including the capital growth of the properties. That’s certainly better than you’ll get at a bank, but less than the equity market might deliver. To maximize returns, we’d say that it’s worth adding to your portfolio. It shouldn’t, however, be your whole portfolio.
Is RealtyMogul legitimate?
Yes. They have been running since 2007, are SEC-registered as required, and have an A + BBB rating. During the research for our RealtyMogul REIT review, we didn’t find any indications that RealtyMogul is a scam. Dissatisfaction with the company is generally due to a misunderstanding about the investment.
How does RealtyMogul work?
The RealtyMogul team invites commercial property developers and owners to apply for financing through them. The funds may be for new development, property improvement, or leveraging equity to purchase new property. The company’s investment committee does extensive research on the viability of each project. They consider the risks and profit potential. If a proposal passes muster, they’ll invest. The company then sells shares in the project on to the public, using a crowdfunding model. Clients typically receive distributions and might benefit from capital growth.