Realty Mogul, an online, equity crowdfunding platform for real estate is going live today and already has its first success story. AH Capital, a real estate investment company in Los Angeles, raised $110,000 using Realty Mogul’s platform for real estate crowdfunding. The money was raised while Realty Mogul was in private beta and is being used to purchase and rehabilitate a duplex in Los Angeles, CA.
AH Capital structured the investment as a secured loan, paying interest of 10% to investors on an annual basis. AH Capital is a real estate company that specializes in finding and creating value in residential properties. They looked to Realty Mogul to raise additional capital to continue growing the business. CEO Nicholas Halaris said, “Realty Mogul allows us to reach new investors and benefit from economies of scale available only through a web platform”.
Realty Mogul provides a unique platform for people who want to invest in real estate but are unsure of how to get started and do not have time to manage investment properties full-time. Users have access to buy shares of investments for as little as $5,000. CEO Jilliene Helman says “we’re introducing our investors to new real estate investments and allowing them to invest in their own backyard alongside some of the best private real estate investment companies, like AH Capital.”
Among the investors in the transaction was Thomas Pham , a real estate investor who historically invested in condos, doing most of the work himself. Thomas said, “Investing with Realty Mogul was great. It’s much easier than dealing with the hassles of property acquisition and property management. The team made it incredibly easy.”
Realty Mogul looks forward to many more success stories as it launches the web platform to a broader audience today. For accredited investors, Realty Mogul offers two types of investment opportunities: Loan Purchase for Residential Rehab and Equity Purchase for Commercial Buy and Hold.
- Loan Purchase for Residential Rehab – Investors pool their money to invest in a loan, which is tied to a residential property that is being rehabilitated. The property is intended to be sold directly after rehabilitation. Investors earn interest on their money with a balloon payment at the end. The average hold for a loan like this is six to twelve months.
- Equity Purchase for Commercial Buy and Hold – Investors pool their money to purchase shares in a specific commercial property. That property is acquired and managed by a professional investment company with a track record of success. Investors are entitled to a share of the cash-flow from rents as well as share of the proceeds when the property is sold. The average hold for an investment like this is three to five years.
Realty Mogul will first launch with properties in California and Washington.