Review and Ranking
What is Realty Mogul?
Note: This is a review of Review of Realty Mogul's accredited investor options only. Please click here for an in-depth review of their nonaccredited investor options, including their REITs).
IMPORTANT 2021 COVID-19 UPDATE: The investment repercussions of the global pandemic continue to change and evolve with unusual speed. As such, this review might be dated, no longer accurate, irrelevant and/or missing crucial information necessary to making an effective investment. For the latest and greatest information on analyzing investments in this new era, see the latest article in the series: "How will Covid-19 / Coronavirus Affect my Alternative Investment Portfolio?"
2020-09-11: Realty Mogul announced a new model on some of their funds where investors can now invest directly with the sponsor (versus via an LLC that is managed by RealtyMogul). This addresses a possible concern of what happens to the investor if the company goes bankrupt. Jilliene Helman, CEO of Realty Mogul says "RealtyMogul still stays involved for the life of the transaction as an admin services provider to maintain a digital investor dashboard whereby investors can view their distributions, download their tax forms and view quarterly reporting".
Realty Mogul specializes in a variety of investments ranging from residential to commercial and debt to equity.
They boast one of the larger VC fundings, at $45.1 million.
Two reviews ago, they had a healthy number of accredited investments, and boasted the 2nd largest number (13 versus 1 average). Then, they appeared to shift their focus to the non-accredited investor market and the number of accredited investments had dried up (just 1). As of August 18th, 2021 they have 10 accredited offerings. So in the next update, we will survey the investors to see what they think of the offerings (and potentially remove them from probation).
Advantages: $45.1 million in venture capital funding.
Disadvantages: Some investments require up to a $50,000 minimum, which is far above the industry average. Investor fees are on the high side, at 1 to 2% ( is 1%).
Alleged problematic investments: (as reported by investors)
Joplin Full-Service Hotel Equity: never paid a preferred return even though it was supposed to stay open during the remodel instead of completely closing as it did. Sponsor has missed payments to lender. Still has not opened 2 years later and little communication.
Update 9/23/2017: Sponsor now has to raise more equity or debt to avoid the project going bust. If they raise equity, then existing investors will be diluted.
Update 10/19/2017: construction has paused until/unless sponsor can raise more money.
Update 7/20/2018: sponsor is trying to get a construction loan. A break-in at the property resulted in stolen copper wires.
Memphis Courtyard: stopped paying as the business they were supposed to be transitioning to never materialized. Update September 2017: distribution to be given out, but under proforma.
8/18/2021: Adam Beverage has been removed, from "Alleged problematic investments" investments, per the following info from Realty Mogul:
As investors are already aware, the Borrower has been on a 36-month payment plan to pay the loan deficiency. After multiple meetings with the Borrower, the RM asset management team has successfully negotiated an early payoff to repay the loan. Though the early payoff incentive was contemplated when finalizing the deficiency payment plan, the Borrower was attempting to negotiate further concessions. In exchange for repaying the entire outstanding principal balance, the remaining deficiency (unpaid interest, exit fee, legal fees) has been forgiven.
Your final distribution has been processed and should be received within the next 3-5 business days. The final distribution is broken down as follows:
Credit: Borrower Payment - $243,552.48
Credit: Previous Holdback - $15,000.00
Debit: Incurred Legal Fees - ($633.52)
Debit: Incurred Servicing Fees - ($2,333.30)
Debit: Final Entity Holdback - ($2,500.00)
Final Net Distribution: $253,085.66
As a result of this distribution, investors have realized a final net IRR of 8.7%. Furthermore, investors have received $2,393,558 in total distributions on a $2,000,000 investment. Regarding the early payoff, there was no guarantee that the Borrower was going to make all future deficiency payments on time nor make the final balloon payment in April 2021. While we remain disappointed that the investment did not perform as projected, we believe that considering the situation and options, the best possible outcome was achieved. Thank you for participating in this investment with RealtyMogul."
*Starred sites are tied and are shown in alphabetical order.
For more raw data on the site (including investor and sponsor fees, legal structure etc.), or to easily compare it with the data of competitors, see the feature by feature comparison matrix.
Where can I discuss other Realty Mogul deals?
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On probation (3 out of 10 stars)
About Ian Ippolito
Ian Ippolito is an investor and serial entrepreneur. He has been interviewed by the Wall Street Journal, Business Week, Forbes, TIME, Fast Company, TechCrunch, CBS News, FOX News, USA Today, Bloomberg News, Realtor.com, CoStar News, Curbed and more.
Ian was impressed by the potential of real estate crowdfunding, but frustrated by the lack of quality site reviews and investment analysis. He created The Real Estate Crowdfunding Review to fill that gap.
Code of Ethics: To maintain objectivity, I do NOT accept any money from any outside sponsor or platform for ANYTHING (including but not limited to affiliate ads, advertising etc.). See code of ethics for more.
Personal opinion only: All info is my personal opinion only as an investor. I am not an attorney, nor an accountant, nor your financial advisor. Always do your own due diligence and consult with your own licensed professionals before making any investment decision. Information is believed to be correct but may have errors, so use at your own risk. If you find an error, please let me know.
Ratings are general: In my opinion, every investor comes from a different risk tolerance and financial situation, so there's no such thing as a single investment or platform that's great for everyone. There are many deals that aggressive investors love, which I won't touch, and vice versa. And every investor has their own way of doing due diligence. I believe there's no one right way to do it.
So, the site ratings are based on criteria which I feel are important to the broadest range of investors (transparency, volume, bankruptcy protection, etc). And even though I have my own personal, conservative, due diligence method (and talk about how the site's deals measure up in the "deep dive section"), I don't use my personal criteria as a factor in the ratings. So for example, a high ranking/rating doesn't mean that I would personally invest in a site (and vice versa). Click here to see what's in my own portfolio.
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This site has been ranked and reviewed as part of our in-depth, 100+ site industry review. All data is believed to be correct, but may have mistakes. Please contact us if you notice one. All non-data (including rankings, investor comment summaries, etc.) are my opinion only. I'm just an investor and not an attorney, accountant, or certified financial advisor. To maintain neutrality: I do not own a portion of any of the companies reviewed.