Assess their risks, liquidity, returns, and timeframes
The minimum investment on RealtyMogul typically ranges from $25,000 to $35,000, depending on the specific investment offering.
Fundhomes sets its minimum investment threshold at $100, with shares available at $10.
Investing through RealtyMogul entails risks like market volatility, economic shifts, and property-specific issues. Investments are illiquid and there's potential for loss of capital.
Investing in Fundhomes carries risks such as potential loss of capital, market fluctuations, and regulatory changes affecting profitability. Investments are generally illiquid with a long-term exit strategy, and early withdrawal may result in penalties. A secondary market to improve liquidity is under consideration but not guaranteed.
Investments through RealtyMogul are illiquid, as they are private real estate transactions not traded on public exchanges, and therefore cannot be easily sold or traded. Investors should have a long-term commitment and not expect to resell quickly.
Fundhomes offers liquidity options including automatic share sales when properties are sold (5-10 years), a secondary market for selling shares to other investors, and a buyback program, with potential early sale penalties within the first year.
Investors on RealtyMogul can expect an overall realized IRR of 20.8% and an overall target IRR of 15.0%. Cash-on-cash returns, IRR, and equity multiples are key metrics provided for each deal.
Investors in Fundhomes can expect cash dividends from rental income, projected at a hypothetical rate of 6.62% per year, and property appreciation, estimated at 4.74% per year, upon sale within 5-10 years. This totals a hypothetical annual return of 11.36%.
Investments on RealtyMogul generally have a hold period ranging from 3 to 10 years, depending on the individual property's business plan and associated financing.
The investment time horizon at Fundhomes is typically 5 to 10 years, focusing on long-term gains from rental income and property appreciation.
RealtyMogul allows both accredited and non-accredited investors to use its platform. However, only accredited investors can participate in private placement offerings, while both categories of investors may invest in RealtyMogul's managed REITs, subject to certain legal limitations.
To invest in Fundhomes, one must be a U.S. Citizen or a resident of the U.S. with a valid Social Security Number.
Commercial real estate assets on RealtyMogul can be volatile, with values affected by economic shifts, interest rates, and market trends. This can lead to fluctuations in investment value and potential financial losses.
Fundhomes' vacation rental properties face real estate market volatility, with valuations influenced by economic shifts, interest rates, and regulatory changes.
RealtyMogul is regulated by the SEC and must adhere to strict disclosure and filing requirements. The platform's offerings are subject to regular audits to ensure compliance with financial reporting and regulatory standards.
Fundhomes utilizes Regulation A for public offerings, enabling investors to buy shares in Series LLCs that each own a vacation rental property. This approach grants investors partial ownership in a property, with all details outlined in SEC-filed offering circulars.
RealtyMogul's properties are insured against physical damage and loss, but insurance might not cover all risks, such as market volatility or economic downturns. Insurance is a risk mitigation tool, not a guarantee against all potential losses.
Fundhomes insures its properties against physical damage, but this doesn't cover market risks or regulatory changes affecting property values. Insurance limits may also not match property market values.
Investors may receive quarterly distributions, which are not guaranteed in timing or amount and depend on the performance of the investment and terms set by the managing real estate company.
Investors in Fundhomes receive quarterly dividends derived from the net rental income of vacation rental properties, after deducting operational expenses. These dividends reflect a portion of the property's profitability but are not guaranteed and can fluctuate based on occupancy rates and market conditions.
Investors indirectly pay fees for each investment, which vary by the offering and cover administrative, legal, and management costs. Fee details are disclosed for each opportunity on the platform.
Fundhomes earns through fees for property and asset management. This includes handling vacation rental operations like maintenance and guest services, as well as overseeing investment strategies and performance.
RealtyMogul issues Schedule K-1 forms for individual deals and Form 1099s for REIT investments, made accessible via the investor's dashboard. Dividends from REITs historically have not been qualified for preferential tax rates.
Fundhomes provides K-1 Tax Forms for each investment property, detailing investors' share of income, deductions, and credits. Typically, these forms are issued by March 15th each year, with an IRS extension deadline of September 15th if needed.