If you’re aching to invest in real estate but aren’t sure you want to deal with physical property or the hassle of being a landlord, opening an account with Realty Mogul could be a good idea.
This online real estate investment company was founded in 2013 with the goal of simplifying real estate investing through the use of technology.
With Realty Mogul, you can get started as a real estate investor with as little as $1,000 and watch as your cash is invested in pre-vetted real estate investments chosen by real estate professionals.
Keep in mind, however, you need to be an accredited investor to access all of this platforms’ offerings.
According to Realty Mogul, their securities are offered exclusively by a FINRA registered Broker Dealer.
The company offers investments in properties that return a solid cash flow for their clients, but they never offer high-risk investments such as “ground up construction or raw land.”
If you want to invest in real estate without direct property ownership, keep reading to learn more.
My Realty Mogul Review: Key Takeaways First
Before I unpack all Realty Mogul has to offer, here is a quick rundown of their services.
- Realty Mogul offers crowdfunded real estate investment opportunities to individuals who open an account with as little as $1,000.
- Most of Realty Mogul’s investment opportunities are only available to accredited investors.
- Realty Mogul invests in a wide range of properties that could include multi-family dwellings, self-storage, retail, medical buildings, medical buildings, office buildings, and more.
- Create a diverse real estate portfolio without the hassles of owning physical property.
- There are fees involved with using this platform, but they vary widely depending on your individual investment choices.
Hands-Off Real Estate Investing
Investing in Realty Mogul can make sense if you’re someone who is eager to get into the real estate game without having to get your hands dirty. Through the Realty Mogul platform, investors have the potential to invest in real estate online through a secure website.
After creating an account, investors can browse investment options, read through important materials and disclosures, and sign legal documents online.
Realty Mogul clients also have access to an investor dashboard that lets them monitor how their investments are doing 24 hours per day.
Realty Mogul offers accredited investors access to private placements.
To qualify as an accredited investor, you must meet a few requirements:
- Earnings: at least $200,000 per year (or $300,000 per year for a couple) and have an expectation to continue earning that income
- Net worth: a net worth of over $1 million not counting your primary residence
- Other requirements: for accredited investors as specified by the Securities and Exchange Commission under rule 501 of Regulation D.
When you open an account and invest through this platform, you usually do so by purchasing shares in a Realty Mogul LLC that invests into a third-party LLC or Limited Partnership that manages and holds title to the property on your behalf.
However, Realty Mogul also lets investors invest in real estate loans or debt. When you invest in real estate loans, you will either invest into the entire loan or a part of the loan known as a platform note.
Also, notice that Realty Mogul offers a few REIT products known as MogulREIT I and MogulREIT II.
These REITs are available to non-accredited investors or anyone who opens an account with Realty Mogul “subject to some legal limitations,” notes the platform.
It’s also important to consider that the timeline of various investment opportunities offered through Realty Mogul is variable.
As an example, loan investments typically last between six to twelve months. Equity investments, on the other hand, can last up to ten years.
Also note that the ongoing distribution payouts are never guaranteed but follow different schedules based on what you invest in. Debt investments pay quarterly while equity investments pay distributions monthly instead.
Benefits of Real Estate Investing with Realty Mogul
While investing in real estate without dealing with property may sound ideal, there are additional benefits that come with this option:
- Low minimum investment: You only need a $1,000 minimum investment to open an account with Realty Mogul.
- Ease of choosing investments: Choose among real estate investment options online and from the comfort of your own home.
- Professional real estate investment selection: Each investment is pre-vetted by professional real estate investors.
- Receive distributions on a regular basis. While not guaranteed, Realty Mogul distributions are paid out on a monthly or quarterly basis depending on the type of investment you choose.
- Monitor your account online: Realty Mogul makes it easy to monitor your account progress with their online dashboard.
Downsides You Should Be Aware Of
Before you jump in to open an account with Realty Mogul, there are some limitations to be aware of. For starters, most Realty Mogul investors need to be accredited investors with a net worth over $1 million excluding the value of their primary residence.
However, it’s important to note that non-accredited investors are able to invest in both the MogulREIT I and Mogul REIT II.
Second, make sure you understand that there is no secondary market for Realty Mogul investments. As a result, you will have to hold your Realty Mogul investments until they mature.
Since some investments offered through this platform last for up to ten years, the funds you invest could be illiquid for some time.
Finally, Realty Mogul comes with fees that vary from .30% to .50% depending on the type of investment you choose.
While these fees are lower than the 1% charged by competing online real estate platform Fundrise, they are still worth considering.
How to Open an Account
If you are an accredited investor who wants to invest in private real estate placements or anyone who wants to invest in a REIT, opening an account with Realty Mogul could make sense.
To get started, you’ll need to supply some basic personal information such as your name, address, and email address.
If you plan to invest in private placements, you’ll also need to provide information that proves you’re an accredited investor.
From there, you can connect a bank account with your Realty Mogul account and choose among pre-vetted real estate or loan investments offered on the platform.
You can start your account with as little as $1,000, and you can monitor your progress online via the Realty Mogul dashboard at any time.
Is Realty Mogul for You?
Accredited investors who are eager to invest in real estate will find plenty of options to choose from with Realty Mogul.
They can invest in private real estate investments or loans, and they can do so on timelines that last for up to ten years.
Non-accredited investors can also use the platform provided they want to invest in Realty Mogul’s REITs.
If you’re someone who wants to invest in real estate without managing private property on your own, this platform can make a lot of sense.
Fees may be relatively low compared to some comparable companies offering online real estate investments, and you can dive into real estate from the comfort of your own home.
Before you get started, however, make sure to compare other online real estate platforms, fees, and offerings. With enough research, you could become an online real estate investor in no time.