RealtyMogul.com has launched their first REIT (real estate investment trust) labeled the MogulReit I. The new investment vehicle will allow non-accredited investors access to commercial real estate investment opportunities. MogulReit will be using Reg A+ and thus may raise up to $50 million. RealtyMogul.com described the new offer as democratizing real estate investing. Previously only accredited investors (individuals earning $200,000 a year or more or with a net worth of $1 million) could invest in real estate online. RealtyMogul has now opened their platform up to millions of more potential investors.
Investors may participate in the MogulREIT with a minimum $2500 investment (@$10 per share) gaining access to a diversified portfolio of real estate in a single purchase. Property assets will include multifamily, retail, self-storage and office. The offering circular for the MogulREIT may be accessed here.
RealtyMogul.com explained that the MogulREIT is designed to have low fees;
Traditional non-traded REITs employ a highly manpower-intensive sales method, resulting in upfront sales commissions of 7 percent, on average, and total expenses of up to 15%. By offering MogulREIT I exclusively on RealtyMogul.com, it affords investors direct online access to the product with no sales commission and offering expenses capped at 3 percent.
RealtyMogul.com CEO Jilliene Helman said the MogulREIT would allow them to leverage the “hundreds of inbound inquiries” to finance commercial real estate and to curate the very best for financing. RealtyMogul.com’s approach to real estate investment is described as conservative when selecting transactions to offer for investment. The platform states it only invests in cash-flowing properties and will not invest in land or ground up development transactions. This approach will carry through to MogulREIT I.
Helman told Crowdfund Insider;
“[This is] important to let non-accreds in. Our core mission is “Access through Innovation” and we wanted to provide broader access to investors. We also wanted to launch a diversified commercial real estate fund open to as many investors as possible.”
Helman said that both debt and equity opportunities will be incorporated in the “flexible investment strategy.”
“We’re looking forward to executing against our twofold objective for the fund: providing investors with both consistent cash distributions and the opportunity to benefit from potential appreciation in property values,” added Helman.
Helman said RealtyMogul.com would continue to offer stand alone property investments under Reg D. When asked if the MogulREIT concept would be expanded into other targeted sectors of real estate, Helman stated;
“Right now we’re focused on making MogulREIT 1 a success and the intent with this offering is to diversify across geographies and property types.”
RealtyMogul.com is not the first real estate crowdfunding platform to launch a REIT using Reg A+, as created by the JOBS Act of 2012. Fundrise launched the concept last year and has since driven the bulk of success under Reg A+ offers having publicly announced $72 million in transactions. RealtyMogul.com is the largest real estate crowdfunding platform in the US having surpassed $200 million in transactions.
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