Realty Mogul vs Crowdstreet
Investing in property is a proven and effective way to grow your wealth. But traditional property investment requires large amounts of capital.
Not everyone is capable of putting down a 20% deposit on an individual property.
Thankfully there is a way for the everyday investor to get into the property market without the large upfront investment.
This is where crowdfunded real estate investment platforms come in.
They have become increasingly popular and are great for getting into the market with very little upfront costs.
In this article, I compare popular real estate crowdfunding platforms Realty Mogul and Crowdstreet.
|Realty Mogul Is Better For:||Crowdstreet Is Better For:|
|Non-Accredited Investors||Accredited Investors|
|Long-Term Investments||Medium-Term Investments|
|Low Fees||No Fees|
|Medium Risk Tolerance||High-Risk Tolerance|
|Liquid Investments||Illiquid Investments|
|Knowledgeable Investors||Novice Investors|
By pooling people’s money together, these platforms are able to buy into real estate projects throughout the country.
Crowdfunding platforms offer many different types of investments so deciding which one to go for can be tricky.
Let us look at some comparisons:
|Minimum Investment||Real Estate Properties, REITs||Residential Properties, Apartment Buildings, and Tailored Real Estate Portfolios|
|Horizon Considered||5 - 7 Years||3 - 5 Years|
|Fees||1 - 1.25% Management Fee||0% Investor Fee, 1 - 5% Property Sponsor Fee|
|Best Use||Private Placements||Commercial Properties|
|Modest Money Overall Rating|
Realty Mogul VS Crowdstreet: Determining Factors?
Any real estate investor should consider these three factors before selecting a suitable real estate investment platform.
Factor 1: Minimum Investment
Investors who seek out new real estate opportunities must first determine whether they meet certain minimum investment requirements.
Realty Mogul Is Preferable To Crowdstreet
- Realty Mogul requires a $5,000 initial investment to get started. Crowdstreet will require a $25,000 investment.
- Realty Mogul is available to nonaccredited Investors.
Realty Mogul: Minimum Investment
Realty Mogul allows you to start investing in REITs with an initial $5,000 investment. You can also invest in private real estate investment placements.
Private placement investments, which include investments that qualify for opportunity zones, are exclusively accessible to accredited investors only.
These carry higher risks but potentially higher rewards. The investment minimums for these range from $25,000 to $50,000.
If you want to take your investments to the next level, you can get started with Realty Mogul here.
Crowdstreet: Minimum Investment
Crowdstreet allows you to select from high-quality projects that fit your investing goals.
Investment minimums through direct investing vary by project and sponsor but they typically start around $25,000.
Factor 2: Location Of Investment Properties
A Crowdsourced investment location is just as important as an individual real estate investment for yourself.
As the saying goes, it’s all about location.
The more investment options offered in different locations the better.
Crowdstreet Is Preferable To Realty Mogul
- Crowdstreet offers properties in more US states than Realty Mogul.
- Crowdstreet’s marketplace provides a diversified portfolio of assets for tangible real estate.
Crowdstreet: Location Of Investment Properties
Crowdstreet offers popular locations that offer either a market edge or subjective appeal.
Crowdstreet’s 20 best investment opportunities have been selected because they combine several key characteristics that foster desirable communities and opportunities for everyday investors.
Some of Crowdstreet’s best investments are located in states with no tax liability, such as Texas, and Tennessee.
You can take advantage of these investments by investing with Crowdstreet today!
Realty Mogul: Location Of Investment Properties
The original headquarters of Realty Mogul was located in Los Angeles before moving to Atlanta.
Because of this, the majority of their real estate deals are concentrated around these locations.
When put up against Crowdstreet, their investment portfolio is not as widespread. This could be a limiting factor to your investments and should be considered.
Factor 3: Performance
Performance is always a factor when deciding on which platform is right for you. Let’s go over the previous performances of Realty Mogul and Crowdstreet below.
Realty Mogul: Performance
Depending on the company’s strategy, the transaction sponsor may provide guidance on potential returns, which usually range from 0 percent to 10 percent annually.
Real Estate Mogul boasts a 5 to 10 percent yield through real estate investment trusts (REITs).
Read the full Realty Mogul analysis here!
Real Estate Mogul was launched in 2013 and has over 250,000 registered members as of today.
With over 33,000 completed deals and around $950 million in generated capital, it has an impressive track history.
Since the company’s launch, 153 out of the 709 offers were fully realized, resulting in a mean internal rate of return (IRR) of 18% and a profit margin of 1.55 times revenue.
It’s a great platform with an excellent reputation. Crowdstreet continues to maintain its effectiveness and provides detailed historical results for each offer.
Realty Mogul vs. Crowdstreet: The Bottom Line
As far as real estate investing platforms go, these two do a great job of vetting all deals they put on their site.
For example, Realty Mogul accepts 0.1% of deals they are approached with. For Crowdstreet, it’s roughly 2%.
If you’re an accredited individual investor looking to invest without having to worry about buying and managing investments yourself, Crowdstreet may be your best bet. Non Accredited investors might be better suited to Realty Mogul.