I don’t endorse this company but I like the idea:
Realty Mogul, a site where accredited investors can can pool their money to back real estate deals, is going live today.
Co-founder and Jilliene Helman argued that in the current financial landscape, real estate is “one of the ways that people can still get yields.” She also acknowledged that there’s a lot of excitement right now about equity crowdfunding for startups, but she noted that investments on Realty Mogul can start paying off in a few months (in the form of rent checks or loan payments), rather than five or ten years: “Our big focus for investors is cash flow.”
For now, Helman said Realty Mogul is “100 percent focused on accredited investors” (to qualify as an individual, you’d need to have a net worth of more than $1 million or income of more than $200,000). She also suggested that these kinds of investments could also be a good fit for the “mass affluent” — i.e., people making more than $100,000 a year who aren’t accredited investors — but the company is currently waiting for the final regulations to come out of the JOBS Act before it decides whether to actually open up to that group.
Realty Mogul was incubated by the Microsoft/TechStars Accelerator in Seattle, and it’s also announcing a $500,000 seed round (more on that in a second). Participating angel investors include Gust CEO David S. Rose, Gordon Stephenson (who’s on the board of directors at Zillow), and serial entrepreneur Sky Kruse.
Even though it’s officially launching today, Realty Mogul already funded its first project — AH Capital used the site to raise $110,000 to purchase and rehabilitate a duplex in Los Angeles.
When you join the site, you can browse a marketplace of different investments, then sign the paperwork and submit the payment for deals that you’re interested in. The investment only happens if the total funding goal is reached. If it is, you can then track your investments in an investor dashboard.
Helman said that one of her big goals is to build investor trust. For example, Realty Mogul links to all of the real estate companies’ LinkedIn profiles, so users can see whether they’re connected to the company in some way. For now, the site is limited to properties in Washington and California, although investors can participate in anywhere. Helman said she plans to expand gradually.
“We are a tech startup, and tech startups are supposed to grow as quickly as humanly possible,” Helman said. “But we’re a financial services company first and a tech startup second, so I want to grow as quickly but as conservatively as possible. We need to make sure we’re keeping investor protections first.”
Other sites for real estate crowdfunding include Fundrise and Prodigy Network.
http://techcrunch.com/2013/03/20/realty-mogul-launch/
Wow, lots of potential here. For good and bad, the devil is in the details and I don’t see those…
An internet-based hard money lender amongst blind counterparties. What could go wrong with that?
It depends which side you are on.
Yup. That was my exact first reaction.
Easy to get your money in but how do you get it out when you want to liquidate.
Hi, this is Jilliene, the founder; thanks for the comments and the coverage. You are right that it’s all about the details. As far as getting money out, we are working with private, non-liquid investments, so our investors need to understand and be comfortable with those risks. They cannot be easily traded today like a stock. That being said, we try and cater to investors who want to lock up money for different lengths. Our shortest investment is a 6-month loan. There is always the risk of default and therefore that money being tied up, but we do our best to project based on our knowledge.
If you have additional questions, don’t hesitate to reach out – info@realtymogul.com