RealtyMogul.com

RealtyMogul.com is an online real estate crowdfunding marketplace, connecting borrowers and sponsors to capital from individual and institutional investors. Through an online platform, RealtyMogul.com gives borrowers access to debt capital, sponsors access to equity capital and investors tools to browse investments, do due diligence and invest online. RealtyMogul.com offers bridge and permanent loans and joint venture equity.^[2]

RealtyMogul.com and its community of over 80,000 online real estate investors have invested over $200 million in debt and equity real estate transactions in over 350 properties, collectively valued at over $800 million.^[3][4][5]

History

RealtyMogul.com was founded in 2012 and launched in 2013 by Jilliene Helman and Justin Hughes.^[6][7]

RealtyMogul.com raised $9 million in Series A funding in 2014^[8][9] and $35 million in Series B funding in July 2015.^[10][11] The Series A funding was led by Canaan Partners^[12] and the Series B funding by Sorenson Capital.^[13]

In May 2013, RealtyMogul.com became the first crowdfunding online platform to have funded over $200 million in debt and equity transactions.^[14][15][16]

The Model

Individuals invest by purchasing shares in a RealtyMogul.com limited liability company (“LLC”) that in turn invests into a secondary LLC or Limited Partnership (“LP”) that holds title to the real property. The entirety of the Realty Mogul LLCs are managed by RM Manager, LLC, a wholly owned subsidiary of RealtyMogul.com.^[17]

Term of investment differs between debt and equity investments. Loan investments in debt range from 1 to 10 years and distribute proceeds to investors monthly,^[18] while equity investments range from 3 to 10 years and provide investors with quarterly distributions of proceeds.^[19]

RealtyMogul.com charges deal sponsors a commission on funds raised with a tiered fee schedule based on the amount. Investors are charged a 1-2% annual investor reporting and technology fee, which is based on invested capital.^[20][21]

Investors are presented with potential investment opportunities pursuant to Rule 506 (b) and 506(c) of Regulation D of the Securities Act, section 4(a)(2),^[22][23] and Title IV of the JOBS Act, regulation A.^[24]

Debt Financing

RealtyMogul.com offers two types of debt financing opportunities for its online investors: Bridge Loans and Mezzanine Debt.^[25] Both have investment terms that range from 1 to 10 years and distribute proceeds to investors on a monthly basis.^[26]

Equity Investments

RealtyMogul.com’s equity investment opportunities allow online members to pool their money to purchase a piece of a specific commercial property, in commercial buy and hold transactions. Investors receive a share of the cash-flow from rents and a share of the proceeds when the property is eventually sold. The hold period for these equity investments range from 3–10 years.^[27][28]

1031 Exchange

In March 2016, RealtyMogul.com began offering its online members investments that were 1031 exchange eligible.^[29] A 1031 Exchange (also referred to as “like-kind” exchange or “starker” exchange^[30]) refers to section 1031 of the Internal Revenue Code. IRC 1031 provides an exception that allows individuals to postpone paying tax on the gain received in a business or real estate transaction if he or she reinvests the proceeds in similar property as part of a qualifying, like-kind exchange. Qualifying transactions pursuant to IRC Section 1031 are tax-deferred, but not tax-free.^[31]

MogulREIT

In August 2016, RealtyMogul.com began offering MogulREIT, which is a Regulation A+ eligible investment option open to both accredited and non-accredited investors.^[32] An investor can participate in MogulREIT with a $2,500 minimum investment.

Locations

RealtyMogul.com is headquartered in Los Angeles, CA and has additional locations in both Atlanta, Georgia and New York, New York.^{[33][34][35][36]}

Notable Projects

The types of properties that have appeared as investment opportunities on RealtyMogul.com’s online platform include apartment buildings, office buildings, retail shopping centers, self-storage facilities multifamily dwellings, industrial sites, medical buildings, hospitality establishments and pools of single family homes.^[37][38]

In 2014, RealtyMogul.com, raised $1.5 million for the 163-room Hard Rock Hotel in Palm Springs, California. This was the first crowdfunded hotel in the country. The equity transaction involved 85 investors.^[39]

RealtyMogul.com also provided $3.9 million in mezzanine financing for the acquisition and conversion of an industrial property in Garden Grove, CA into an 896-unit self-storage facility at a total cost of $15.1 million.^[40]

RealtyMogul.com invested $1.44 million in a mobile home park fund. The fund plans to invest in a diversified portfolio of cash-flowing manufactured housing communities (MHCs) across the United States.^[41]

RealtyMogul.com helped finance a $20 million acquisition of Chesapeake Landing, a 256-unit multifamily building in Dayton, Ohio through a $1.6 million equity investment.^[42]

Investors

Investors include Hrach Simonian, a general partner at Canaan Partners who was responsible for RealtyMogul.coms Series A funding round, Sorenson Capital, David Rose, Gordon Stephenson, Jilliene Helman, Microsoft Accelerator, Microsoft Accelerator Tel Aviv, Tibor Nagygyorgy, VoiVoda Ventures.^{[43][44][45][46]}

Founders

RealtyMogul.com was founded in 2012 and launched in 2013 by Jilliene Helman and Justin Hughes.^[47][48]

Jilliene Helman serves as the Chief Executive Officer of RealtyMogul.com and is responsible for the company’s strategic direction and operations. Jilliene, who sits on RealtyMogul.com’s board, has underwritten over $5 billion of real estate and was previously a Vice President at Union Bank, where she spent time in Wealth Management, Finance and Risk Management. Jilliene is a Certified Wealth Strategist®, holds Series 7, Series 63, and Series 24 licenses and has a degree in Business from Georgetown University.^[49]

Justin Hughes served as the Chief Technology Officer of RealtyMogul.com until August 2016. He was replaced as CTO by Sameer Shamsuddin.^[50] The departure of Justin Hughes was immediately followed by the departure of another senior executive, General Counsel Ryan Sakomoto, less than 30 days later.^[51]

Justin, who also sits on the company’s board, previously ran an independent consultancy in Los Angeles providing web-based application development and digital marketing services. Justin holds a California Bureau of Real Estate license, Series 7, Series 63, and Series 24 licenses, and earned a Bachelor's Degree in Cognitive Science from the University of California at Berkeley.^[52]

Board

Currently RealtyMogul.com’s board includes the following individuals:

• Jilliene Helman, Co-Founder and CEO.^[53]
• Hrach Simonian, a General Partner at Canaan Partners.^[54][55]
• Rob Rueckert, a general partner at Sorenson Capital.^[56][57]
• Steve Ozonian, Chief Real Estate Officer of Carrington Holding Company, LLC.^[58]

See also

• Crowdsourcing
• Crowdfunding
• Disruptive Innovation
• Commercial Real Estate
• 1031 Exchange

External links

• RealtyMogul.com official website

References