LOS ANGELES—Realty Mogul is ringing in its first anniversary with investments of $104 million in commercial real estate property values. The crowdfunding platform, which launch in March 2013, is the largest investment network of its kind.
Realty Mogul CEO and co-founder Jilliene Helman, who will be speaking at RealShare Los Angeles on March 25, attributes the company’s success to its quality stock of properties. “We have a really strong supply of real estate properties that have gotten us to the point we are at so far, and we are continuing to look for high-quality real estate opportunities for our investors,” Helman tells GlobeSt.com. “There are a lot of competitors, but we are the largest—the largest by the number of properties funded, by the number of states that we are in and by the capital rates in the market place.” Of the investment capital placed by the company in its first year, 71% went towards equity investments and 29% toward debt investments. To date, Realty Mogul’s private investors have placed $14.6 million with 58 properties in 14 states. “For us it is about scale. We just crossed $100 million in property values and we are looking to do hundreds of millions of dollars in 2014,” says Helman.
Realty Mogul has a unique perspective of crowdfunding. Where most companies think about the platform as democratization of access to capital, Helman says they think of crowdfunding as democratization of access to deal flow. “We want to get hundreds of millions of dollars of deal flow in front of investors who would otherwise not have access to it,” she adds. It seems to be working. The company is on a roll, hitting major benchmarks throughout the year. In February, the company announced it had $85 million worth of properties funded nationwide.
Of course, the year hasn’t been without its challenges. There are the basic challenges that come with launching any business: raising capital, hiring employees and generally growing the company; however, Realty Mogul had to also deal with ambiguity from the SEC, which is just now adapting and forming rules and regulations for this type of investing. “There were expectations when we started this business that there would be more guidance from the SEC around the Jobs Act, and we still haven’t seen that guidance, albeit the comment period is now done for Title III,” says Helman. “There is still not a whole lot of clarity out of the SEC on what we can and cannot do, so we are being very conservative on our approach.”
Even though regulations have come slowly, Helman sees a bright future ahead for the platform in this industry. “I think there are going to be billions of dollars of properties that are acquired through crowdfunding,” she says, noting that the fresh investment platform has already acquired hundreds of millions of dollars through crowdfunding. “So, we are not far off. We’ve only just begun to make a market for real estate crowdfunding.”