If you want more control over the properties you invest in, RealtyMogul is an excellent choice. And the platform still has different REITs you can invest in to help diverisfy your portfolio of real estate.
That said, RealtyMogul is just one of many real eatate crowdfunding platforms out there. And some alternatives are superior depending on how much money you want to invest or what returns you’re looking for.
Fundrise is our favorite alternative if you want to invest in real estate with little money since it only takes $10 to start. You get paid in quarterly dividends, and there’s only a 1% management fee as well. And, there’s a secondary marketplace for shares which helps increase liquidity.CrowdStreet is another excellent alternative, but most opportunties are only available to accredited investors, and there’s a $25,000 minimum.
Finally, Streitwise is a great alternative if you’re interested in generating dividend income. It’s paid over 8% in dividends since 2017, and the $5,000 minimum is the same as RealtyMogul.
Pros
“Pre-vetted” Investments – RealtyMogul has a thorough underwriting process that evaluates the property, location and the borrower or sponsor for each investment opportunity available on the platform. The vetting extends to background and criminal checks on the principals involved in the investments and includes the RealtyMogul underwriter stepping foot on each property to evaluate it in person.
Simple Investment Process – There are no capital calls in which you will be required to provide additional capital over and above your initial investment. Instead of additional investment, your investment may be diluted if more money is needed or the transaction requires member loans at a high rate of interest (10%–15%). If member loans are necessary, your equity position in the investment would be subordinated to those member loans, and the loans would have to be paid back before any equity distributions are made.
No Capital Calls – There are no capital calls in which you will be required to provide additional capital over and above your initial investment. Instead of additional investment, your investment may be diluted if more money is needed or the transaction requires member loans at a high rate of interest (10%–15%). If member loans are necessary, your equity position in the investment would be subordinated to those member loans, and the loans would have to be paid back before any equity distributions are made.
Greater Control Than REITs – When you invest in a REIT, you are investing in a portfolio of real estate properties, but you have little information and even less control over the individual investments. With RealtyMogul you can invest in individual properties, including those close to your home. In fact, RealtyMogul allows you to be very specific with your real estate investments.
Private REITs – The recently introduced Income REIT and Apartment Growth REIT allow non-accredited investors to invest in real estate.
Cons
Accredited Investor – You must have an annual income of at least $200,000 (or $300,000 for a couple) or a net worth of more than $1 million — and that doesn’t include the value of your personal residence. However, the recently introduced REITs are open to both accredited and non-accredited investors.
Illiquid Investments – There is no secondary market to sell your positions and must hold to maturity, which can typically be 3-7 years.