Realty Mogul: MogulREIT I, MogulREIT II. Review

Category: Non-accredited investor funds
Honors: Best for debt (MogulREIT I)

Realty Mogul was the 2nd platform in the industry to introduce nationally available funds to non-accredited investors. Currently it has 2 funds.

MogulREIT I

 

This fund invests in debt and debt-like securities.("loans, equity in commercial real estate ventures and other real estate-related assets").

It's made more than 12 months of 8% (annualized) monthly distributions. It has no performance fee, which is one of the biggest fees if the fund as well. It has a nice feature where you can view the portfolio here.

It's minimum investment is $1000 which is the industry average ($5,000 for IRA which is a bit more).

On the downside, skin in the game is exceptionally low with principals investing only $2,500 or 0.05%.

MogulREIT II

This fund is very new, starting in September of 2017. It invests in multifamily apartment communities (both with high occupancy, and value-added opportunities). It's minimum investment is $1000 which is the industry average ($5,000 for IRA which is a bit more).

On the positive side, principals have invested $1 million in this fund which is much more skin in the game than the industry average ($100k) and the largest percent of invested equity currently (25%). Also, it has no performance fee, which is one of the biggest fees if the fund as well.

This fund has no history or target yield. This makes it difficult to gauge the risk and appropriateness for portfolio. I hope they at least change the target soon.

It's currently leveraged at 0%, but has the ability to go up to 75%. Unfortunately there is no target leverage, so it's difficult to say how conservative or aggressive they intend to go. It would be really nice if they set a target in the future, so that an investor can determine if targeted risk is a good fit for their portfolio or not.
 

Both funds:
 

Neither fund has full bankruptcy protection. They are bankruptcy remote, but do not have the backup service providers specified in advance. So in a bankruptcy, this could be a problem.

As mentioned earlier, neither fund has a performance fee which is a huge plus. Slightly offsetting this is that both funds charge a 3% organizational and offer expense fee when you make a deposit, which is a bit higher than the industry average (1.5%).

Both funds have a one year lockup during which you can't take out your money, which is longer than average ( the average fund has no lockup). The withdrawal fees are:

  • One year lockup.

  • 1 year until 2 years 2% fee.

  • 2 years until 3 years 1% fee.

  • 3 or more years no fee.

     

  • Advantages: No performance-based fees, access to either multifamily or debt strategies if that's what your portfolio is looking for.
     
  • Disadvantages: Incomplete bankruptcy protection, slightly high 3% organizational and offering expense fee on deposit (average is 1.5%),inability to pull money out for one year.
     

  • Accolades: Best for debt (MogulREIT I).

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 Realty Mogul's REITs?


You can do this with thousands of other investors in the private investor club. While the club is free, membership is restricted to investors who have no business connections to sponsors or platforms. Also, all members must agree to keep all club info confidential by signing a nondisclosure agreement. Click here to join or get more info.

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Realty Mogul, MogulREIT 1,MogulREIT 2
    • Code of Ethics: To maintain objectivity, I do not accept any money from any sponsor or platform for anything (including 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 a registered financial advisor, attorney or accountant. 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.
       

    • Reviews 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 reviews are based on criteria which I feel are important to the broadest range of investors (transparency, volume, bankruptcy protection, etc). So for example, a positive review doesn't mean that I would personally invest in a site (and vice versa). Click here to see what's in my own portfolio.

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.

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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. 

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