RealtyMogul Review 2024: How It Stands Out, Where It Can Improve

Real estate crowdfunding platforms let investors pool their money to fund real estate projects as a group. Crowdfunding can be an excellent way to tap into the real estate market with a relatively small upfront investment—without the hassle of owning and managing properties independently. One real estate crowdfunding platform to consider is RealtyMogul, which caters to accredited and nonaccredited investors in search of commercial real estate assets. You can invest with an individual account or a SDIRA (self directed IRA).

Who is RealtyMogul best for?

RealtyMogul is best for nonaccredited investors seeking returns from public, non-traded REITs, and accredited investors interested in private placements.

Pros and cons

Benefits of RealtyMogul

Open to accredited and nonaccredited investors

Nonaccredited investors can invest in two non-traded REITs that provide access to a portfolio of properties with the potential to pay passive income. Accredited investors can invest in REITs or individual properties (private placements) that may offer quarterly distributions along with capital appreciation.

Fully vetted properties

To be included on the RealtyMogul platform, real estate companies (aka "sponsors") must meet specific minimum qualifications, including requisite experience backed by a strong track record and satisfactory background and criminal checks. Once a sponsor's offering is live on the platform, the RealtyMogul team conducts ongoing quality control measures, such as visiting the property (or a representative property in the case of a portfolio) and reviewing third-party reports.

Potential for high returns

RealtyMogul's overall realized internal rate of return (IRR) is 20.8%, topping its target IRR of 15%. The Income REIT has distributed between 6% and 8% (net of fees) annually since its inception, while the Apartment Growth REIT has returned an annualized rate of 4.5%.

Automatic investing

Once you've invested in one of RealtyMogul's REITs, you can participate in its auto-invest program to buy additional shares each month (subject to a $250 monthly minimum).

What could RealtyMogul do better?

Fairly high investment minimums

You'll need at least $5,000 to invest in REITs or $25,000 for private placements.

Illiquid long-term investments

The real estate investments offered on RealtyMogul can't be quickly sold or traded. Most property deals have an expected hold period of three to seven years, and RealtyMogul says you shouldn't invest with the expectation of reselling your investment before then. The company's two REITs are non-traded, making them illiquid assets. Still, each REIT has a share repurchase program that may provide limited liquidity after you've held the REIT for at least one year, subject to the availability of capital.

Few investment opportunities

Currently, RealtyMogul only offers two REITs for nonaccredited investors and a dozen properties for accredited investors.

No mobile app

The company doesn't offer a mobile app, so you'll have to access RealtyMogul from your desktop or laptop computer or your mobile device's browser.

How does RealtyMogul compare?

There are several crowdfunded investing platforms you can choose from. Here’s how a few compare to RealtyMogul.

RealtyMogul: In-depth review

Here's a closer look at how RealtyMogul works and what investors can expect.

Usability

RealtyMogul has an easy-to-use website where you can research past investments and review basic information about current offerings. You'll need to join RealtyMogul to view key investment details. Joining is free, and you can create an account by entering your contact information and selecting if you're an accredited investor (or not).

The Securities and Exchange Commission (SEC) defines an accredited investor as someone having a net worth of at least $1 million (excluding their primary residence) or an annual income of more than $200,000 (individually) or $300,000 with a spouse or partner in each of the previous two years.

Once you create an account, you can explore opportunities, select an investment, and complete the transaction online. From there, you can track the performance of your investments in your account dashboard, where you can also view quarterly investment reports and annual tax documents, such as K-1s and 1099-DIVs.

Unlike some real estate investing platforms, RealtyMogul doesn't offer a mobile app, so you need to be content working from your desktop or laptop computer.

Investment options

Nonaccredited investors can invest in commercial real estate properties through public, non-traded REITs designed for income and growth. The RealtyMogul Income REIT pays monthly cash distributions, while its Apartment Growth REIT focuses on capital appreciation. The minimum investment for either REIT is $5,000.

Qualified, accredited investors can invest in a specific property or a small group of properties (referred to as a "private placement") across various property types, including apartment buildings, office, retail, industrial, mixed-use, ground-up development, self-storage, cold storage, and mobile home parks. The typical investment horizon ranges from three to seven years, with a minimum investment of $25,000 to $50,000.

Technology

The online-only RealtyMogul platform provides the software, tools, and information you'll need to invest in real estate—whether you buy REITs or build your own real estate portfolio. RealtyMogul members have access to institutional-quality office, multifamily, retail, and other commercial real estate deals in dozens of markets nationwide.

The platform lets you sort deals by property type, your investment timeline, projected return metrics, and other criteria. You can also view detailed financials and attend a live webinar with the real estate company to learn more and ask questions. Once you screen and select an investment, you'll sign the necessary legal documents online and manage your investment through your member dashboard.

According to RealtyMogul, you can contact an investor relations team member anytime you have questions about the platform.

Costs

RealtyMogul requires a minimum $5,000 initial investment to trade REITs, though you'll generally need at least $25,000 to $50,000 to invest in private placements. There are no fees to join RealtyMogul or use the platform, and you won't pay any fees directly if you choose to invest.

However, you'll pay fees in connection with each investment, typically covering administrative and legal expenses, ongoing reporting, and communications from the investment. The specific fee structures vary by investment and are disclosed in each investment's Offering Circular.

Education

The RealtyMogul Knowledge Center offers dozens of articles covering everything from conducting due diligence to understanding your Schedule K-1. You can enter a term in the search bar or filter content by REITs, building wealth, commercial real estate, investing, passive income, and RealtyMogul news.

The website also has a glossary with simple descriptions of commonly used real estate investment terms and an FAQ page covering questions about RealtyMogul, general investing questions, and details about individual deals, REITs, taxes, and real estate companies, or "sponsors."

Customer service

You can reach a RealtyMogul representative via phone or email from 6 a.m. to 6 p.m. Pacific Standard Time (PST) on weekdays (excluding federal holidays) or by submitting an online form on the company's website. You might find an answer to your question in the website's FAQ or Knowledge Center pages.

Social features

RealtyMogul maintains a limited presence on Facebook, Instagram, LinkedIn, X (formerly Twitter), and YouTube. Your best bet for interacting with the company is to call or email.

Security and reliability

RealtyMogul says it limits access to your personal information to employees with a legitimate business need to access that information. The website is built with multiple layers of protection, and the company uses industry-standard encryption technologies to safeguard your information.

Using the platform's online software, you can use a standard ACH transfer to move money from your bank account to RealtyMogul. If you invest over $100,000, you'll wire the funds directly to the relevant real estate company using a specific account and routing number to ensure the cash gets to the right place.

Company reputation

RealtyMogul was founded in mid-2012 and welcomed its first member to the platform in the first month of 2013. Since then, some 280,000 registered RealtyMogul members have collectively invested over $1 billion in capital on the platform across projects valued at more than $7 billion. Still, the company (and the real estate crowdfunding space in general) has a limited operating history, so it's wise to do your homework before making investment decisions.

RealtyMogul has an A+ rating with the Better Business Bureau (BBB), though it’s not BBB accredited, with just four customer complaints submitted over the past three years.

How does RealtyMogul make money?

Like other alternative investment platforms, RealtyMogul earns money by charging asset management fees specific to each investment. You can learn more about the fees you can expect to pay by reviewing each investment's Offering Circular.

Other RealtyMogul services

RealtyMogul currently offers two REITs and a dozen private placement investment opportunities. The company plans to add 1031 exchange properties to its offerings, creating even more options for real estate investors. A 1031 exchange is a tax strategy that lets you defer capital gains taxes when selling one property and using the proceeds to buy a "like-kind" property over a specific timeframe.

TIME Stamp: As with any real estate investment, read the fine print first

Real estate crowdfunding platforms are an easy entry point into real estate investing. However, it's essential to do your homework and read the fine print so you know what to expect before you invest.

For example, RealtyMogul fine print shows that its investments are illiquid, meaning you won't be able to sell your REIT or exit a private placement early if you need cash or decide real estate investing isn't for you. The fine print also explains that fees vary by investment—typically a 1% to 1.25% annual fee for REITs and 1% to 2% for private placements.

While these fees are in line with other investment platforms, it's important to understand how a particular investment's fees will impact your returns.

RealtyMogul emphasizes that it doesn't provide investment or tax advice, but you can contact an investor relations team member anytime you have questions about the platform. Consider working with a qualified investment advisor or tax professional if you have further questions or need help choosing the best investments for your goals, risk tolerance, and time horizon.

Frequently asked questions (FAQs)

What is the return rate for RealtyMogul?

According to the most recent data, RealtyMogul's overall track record includes 228 total realized investments with a 20.8% overall realized internal rate of return (IRR). Of course, past performance doesn't guarantee future results, and investors bear the risk of loss. RealtyMogul advises members to "conduct their own evaluation and due diligence of prospective real estate investments" and to seek advice from an investment professional.

Is RealtyMogul better than Fundrise?

RealtyMogul and Fundrise are both real estate crowdfunding platforms, but there are some key differences to consider before deciding which is right for you:

• RealtyMogul has a $5,000 minimum initial investment versus just $10 for Fundrise.
• RealtyMogul has options for accredited and nonaccredited investors, but you have to be accredited to invest in individual properties. With Fundrise, you must be accredited only to access a few premium offers.
• RealtyMogul lets you choose the properties you want to invest in, while Fundrise automatically generates a portfolio based on your goals and risk tolerance.
• The RealtyMogul platform is web-only, while Fundrise offers a user-friendly app to track your investments on the go.

RealtyMogul might be better if you prefer more control over your investments and can comfortably afford the $5,000 minimum investment. Consider Fundrise if you want to start with a small investment and access premium features as your assets grow.

How do you invest in real estate?

If you’re like most people, a home might be your first venture into real estate, but there are other ways to tap the market. For example, you can buy a rental property, rent out a room in your home (aka "house hacking"), flip houses, invest in REITs, or use an online real estate investing platform like RealtyMogul or Fundrise.

Of course, some options are better than others, depending on your goals and risk tolerance. For instance, you might choose a REIT if you're looking for a hands-off approach—or a rental property for hands-on control and valuable tax breaks.