Real estate is one of the most desirable assets due to its intrinsic value, resistance against inflation, tax advantages, and long-term returns. While the asset has many advantages, it’s difficult to manage properties on your own. RealtyMogul can give you exposure to real estate returns without the work involved with managing properties.
What is RealtyMogul?
RealtyMogul is a real estate firm that lets investors capitalize on private investments and REITs. The company pools resources from investors to acquire large properties that address the investment’s objective. For instance, the RealtyMogul Income REIT focuses on real estate investments with high cash flow, while the RealtyMogul Apartment Growth REIT focuses on assets with high appreciation potential.
How Does the RealtyMogul Platform Work?
RealtyMogul lets investors pool their money together for compelling real estate opportunities. The company targets multifamily apartment buildings and large complexes that most individual investors cannot afford. RealtyMogul embraces a “strength in numbers” mentality as it approaches these expensive investments that look promising. RealtyMogul has high minimum investment requirements and distributes cash flow from rental properties to investors after accounting for fees.
You can make more money buying real estate on your own, but you won’t have to worry about property management or the headaches associated with real estate. A professional team will manage the investments and look for profitable investment opportunities.
What Investments Does RealtyMogul Provide?
RealtyMogul provides several types of real estate investments. Here’s what you can expect to find if you give RealtyMogul a closer look.
Private Market Offerings
RealtyMogul raises funds from investors to acquire large properties. These private market offerings give investors partial ownership of the property and a claim to a percentage of cash flow. The firm targets properties across the United States and lists them on the investments page. You will have to fill out a form to learn about the investment and make your initial investment if you want to go in that direction.
Real estate investment trusts allow investors to pool their money together to acquire properties. RealtyMogul manages two REITs with different objectives. Both RealtyMogul REITs require a $5,000 minimum investment.
The Income REIT focuses on cash distribution and often has a yield between 6% and 8%. The Income REIT has consistently made cash distributions for over 80 months. The REIT pays a monthly dividend to its investors. The REIT holds over $350 million in total assets.
The Growth REIT focuses on property appreciation and has a lower but still respectable yield. Investors can expect an annualized distribution rate of approximately 4.5%. The company makes quarterly dividend payments and has made over 20 consecutive quarterly payments. Over 3,500 investors have pooled their money into this REIT, and it currently holds over $260 million in assets. The REIT invests in multifamily properties and has averaged an annualized return of 7.80% since its inception on August 23, 2017.
Self-directed IRAs give investors more flexibility over which asset classes can go into their retirement portfolios. RealtyMogul offers investments that are IRA-eligible if you have a self-directed IRA. Individual retirement accounts shield you from taxes. While a traditional IRA shields more of your pretax money, a Roth IRA protects your capital gains and dividend distributions from taxation. Investors with several decades before retirement may benefit from Roth IRAs. However, if you do not have many years left before retirement, a traditional IRA protects your money from taxes. By the time you take it out in retirement, you will be in a lower tax bracket.
What are the Pros and Cons of Investing with RealtyMogul?
Before investing in any company or fund, it is important to assess the pros and cons. Here are the pros and cons of investing with RealtyMogul.
- Earn cash flow: You can generate monthly or quarterly payments without doing any work.
- No property management or other headaches: Real estate is a great investment opportunity, but it is also a lot of work. RealtyMogul can perform all of the tasks while you receive frequent payments.
- Portfolio diversification: RealtyMogul invests in several property types across the United States. This level of diversification minimizes your risk and can complement the other parts of your portfolio.
- High minimum investment: Both REITs require a $5,000 minimum investment.
- Not as liquid as other investments: You can’t sell your shares on a whim. It may be several months before you can sell shares from the REIT and access your principal investment.
- Dividends are treated as ordinary income: Stocks have qualified dividends that have more favorable tax treatment. However, RealtyMogul REIT distributions are treated as ordinary income. That means higher taxes, and it’s not exclusive to RealtyMogul. Any REIT distributions are treated as ordinary income.
How Does RealtyMogul Stack Up?
RealtyMogul offers competitive REITs and private real estate investment opportunities. The investment opportunities have standard yields and appreciation potential. RealtyMogul has IRA-eligible investments, which helps it stand out from the competition. The real estate company is reliable and consistently distributes funds to its investors.
Who Is RealtyMogul Best For?
RealtyMogul is best for investors who have at least $5,000 to put into a minimum investment. RealtyMogul investors want to capitalize on the benefits of real estate without having to manage properties. If you want passive cash flow and a long-term perspective for your investments, the real estate firm can help.
Should You Invest with RealtyMogul?
RealtyMogul has a lot to offer. You get a diversified real estate portfolio, steady cash flow, and appreciation. While the benefits are plentiful, it is best for people who have enough money to spare and want a way to invest in real estate. If you only have a $10,000 investment portfolio, an investment with RealtyMogul would require 50% of your portfolio funds. While RealtyMogul has real estate diversification, you shouldn’t put 50% of your funds into one asset class.
RealtyMogul funds are also less liquid than other investments. If you are a long-term investor who wants to collect cash flow, the real estate firm is right for you. However, if you believe you will need some or all of your principal $5,000+ investment within a few weeks or months, it may not be the best opportunity for you. RealtyMogul is not the best choice if you are a day trader. While you can day trade REITs that trade on public stock exchanges, you do not have the same luxury with private REITs like the ones RealtyMogul provides.
How to Get Started with RealtyMogul
You can get started with RealtyMogul by creating an account on the company’s website. It is free to sign up and learn about the investment opportunities. Once you sign up, you will have to connect your payment information to make investments.