BEVERLY HILLS, CA-GlobeSt.com has learned exclusively that the average preferred return being offered to investors in private real estate transactions over the last 11 months was 8.5%, according to survey research by Realty Mogul, a locally based marketplace for accredited investors to pool money online and buy shares of pre-vetted investment properties. In the data surveyed, these preferred returns ranged from 5% on the low end to 12% on the high end.
The results were taken from an analysis of more than $375 million worth of investment properties submitted by privately owned real estate investment companies that have requested financing through www.realtymogul.com.
According to Jilliene Helman, CEO and founder of Realty Mogul, “These statistics are surprising when you consider the alternatives investors have, namely placing money in a bank account and earning less than 1%. We are also surprised by the immense ranges in our data, namely around fees being charged by privately owned real estate investment companies for things like acquisitions, dispositions and asset management that are also included in the survey.”
Helman points out that until now, this data had not been aggregated or provided publicly and that one new benefit the “crowdfunding for real estate” market offers is tremendous transparency, including analyses like these.
The survey also includes a discussion on the aggregate size of private real estate transactions, including those aggregated by the Securities and Exchange Commission through Regulation D filings. “This market continues to grow, and as the capital markets become more efficient and more real estate companies have the ability to use the Internet as a distribution vehicle, I predict this market will grow larger than it has ever been in 2013 and 2014,” says Helman.
To access the complete survey, click here.
As GlobeSt.com reported in April, the Realty Mogul website was launched earlier this year to allow investors to pool their money online and buy shares in a transparent purchasing environment. Properties available for purchase include residential and commercial, single-family, multifamily, retail and office properties.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
