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I'm here with Timothy Lee the Chief Information officer of realy Mogul who's
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here to talk to us about his real estate crowdfunding company welcome thank you Dad so real estate crowdfunding has been
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taking off in the last few years can you tell me what's the attraction well the
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attraction first and foremost is we essentially de democratize the way that we invest in real estate um three years
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ago before the jobs act it was not possible for somebody to go on go online and pitching five 10 $20,000 into a real
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commercial uh uh property deal as a passive investor after jobs act it made it easier for us to raise Equity money
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uh online uh to facil facilitate numbers of uh commercial real estate transactions um we made it easy we made
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it transparent and uh individuals can invest in actual properties as opposed to a pull of um properties within the re
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so how does realy mogle work well realy Mogul is an online platform um uh that caters to passive and active investors a
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uh retail investor a passive investor go online and choose uh from a variety of different property types we we have
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multif family uh student housing office space retail centers for people to choose from and it's really easy to
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invest um you can pitch in as little as $5,000 um and you own a real piece of real estate we make the we make the
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process very easy and fast and transparent you can go online make an investment track your portfolio
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performance and we send you all the paperwork you need and we take care of all the back in process on top of all uh
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we pull all the investors together behind a LLC and we negotiate on your behalf with all the rights uh a real
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property owner will have um so it protects the crowd and also give us control over the property property's
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performance so tell me about the technology on your platform and how does that uh democratize the real estate
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market in your view yeah that's a great question the the the technology that we
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use is is is fascinating um there are tons of data out there on Commercial Real Estate uh anywhere from um tracking
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rental performance uh to sales records and things of that nature and we pull all those data together and make the
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best decision we can possibly make uh data side uh we have some of the best uh commercial real estate Underwriters uh
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in the country working uh for realt mogul our chief credit officer has tons of experience at JP Morgan Chase um and
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we have tons of people at real tmo.com that has many many years of real estate and finance experience
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um the technology um is is is a combinations of Big Data marketing online marketing technology
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and uh a really fascinating uh crowdfunding platform technology that we build in house um it it allow us to
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uh uh get the crowd together distribute the funds manage the assets um and keep track of all the transactions and you
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can log in anytime and look at your perfor portfolio performance um and track it uh online for property owners
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what is the advantage of going to a real estate crowdfunding site versus a traditional lender right um the property
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owners or the sponsors uh uh has a great advantage of coming to realy MoGo and that's what realy .c is uh is really uh
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different from Banks and traditional lenders what we do is we do full stack uh financing and what that really means
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is that we will uh raise the equity portion of the uh the the commercial deal on your behalf on the property
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owner's behalf um and we will also give you uh access to debt so you come to us
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with um a small percentage of the equity um maybe 2 3% and we will raise the additional 98% part of that is equity
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that we will raise from the crowd and the the other part is uh debt that we will hook you up with the institutional
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buyer so you get the whole Service uh in one stop and for investors you know what
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kind of return could they reasonably expect as well as what kind of risk are they undertaking in terms of right the
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default rate of the properties right that's a great question um the most of our deals are Equity deals uh these are
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pref Equity mezanine loans um uh let me start over most of our deals are Equity deals um there are pref Equity deals and
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also JV Equity deals these Equity deals are essentially down payments in terms of a a single family home mortgage um
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high risk but it does uh uh uh have the potential to to give you a higher return
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um typically and historically we've we've seen anywhere from um averaging of
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a 6 to 12% maybe even higher um on our Equity deals and these deals are tend to be two to three year hold
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and um on the on the out on the exit the owner could choose to uh either sell the
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property or refinance um our deal out so to speak um the the other component of a
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equity investment is that you also get a cash C cash cash on cash return and what
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that means is uh the rent that you will collect on this property you also get a distribution on a quarterly basis uh as
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a um as a cash flow cash flowing um uh return on the investment so what kind of properties do you invest
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in anything that is uh not single family home so we're talking about hundreds of
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units of um multif Family Apartments retail centers uh office space scener housing student housing um or even um
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storage units so we invest everything in um in around commercial real estate type
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of properties so how are you different from a Reit mhm the biggest difference is realy moo.com
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offers um full transparency you know exactly what which property you're going
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to be investing in uh so you see the property will give you all the glory details about the property the
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performance and the management team um versus a reed Reed is more of a blind poll of funds right you put your money
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in you don't necessarily know which property what kind of property is going into um and it's hard to get your money
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out in a read uh with with real too.com product you know exactly what it is that
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you're investing it you are a true owner of that property and you get your money
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out in 2 three years so the real estate crowdfunding market is getting very very
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crowded how are you standing out the way we stand out is building trust transparency and
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um have develop special relationship with our investors um these reton investors come to us um with their
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heart- earn money these are doctors software Engineers uh partners of their firms and we want to take care of their
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in M um one of our uh guiding principles is investor protection everything we do
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is around investor investor protection um the the I believe the only way that we can we're going to stand out is
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protect our investors make the right investment um provide the right returns for our investors and um and don't bet
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on things that we don't believe in do you see a ShakeOut coming I really don't
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see a ShakeOut um in many ways this industry is brand new we've only only been around for two and a half years and
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so does many of our competitors uh we're we're just in the early endings of this
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game um uh truth be told all of the uh legislations and uh laws are still being developed and vetted out by the SEC and
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the Congress um uh as as soon as tomorrow there's new piece of legislation will will allow non
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accredited investor to start investing in these uh crowdfunding platforms so everything's brand new to us and we are
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constantly uh analyzing what's coming down the pike uh as far as regulation goes and um I I really don't see a
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ShakeOut anytime soon it's just it's it's fascinating to see how the industry
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is it's just starting to to to take off most of the deals that you guys have
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done are on Equity financing side versus set is there a reason for that yeah absolutely um it's easy to get a
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mortgage let's just use the uh the signal family home as an example uh you can Walt into any big banks at Walts
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Fargo Chase and get a mortgage you have the down payment but it's hard to get
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the down payment you have to save you have to um you you have to save for that 20% if you will um a lot of the sponsors
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of property owners don't have that kind of cash laying around they're spread
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pretty thin or they don't want to use our cash um so that's what we come in
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and that's why you see a lot of equity deals a lot of down payment deals if you
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will um they come in with 2% we come in with 18% both of us go to the bank with our 20% and we buy the property and get
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the mortgage so you see a lot more Equity deals than debt deals um and the other aspects of it is that
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Equity deals does typically on average give you a better return um you are the true owner of the property you get again
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cash on cash uh rent money and also on the out if the property performs so you bought it for a million you sold it for
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1.5 you get the additional profit distributed proportionately and can you talk about
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some of the tax implications of that yes there's a um we we we is tax season so
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right now we're processing k1s for our our investors um the the was what's
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interesting right now is that real toogo just launched a brand new product it's a
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1031 exchange uh uh platform uh where there's a whole lot of benefits in uh in
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a 1031 exchange so what that really means is that if you um if you have a property uh and you want to reinvest
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that money to avoid uh to avoid capital gains tax uh you can roll that into a Delaware statuary trust or DST 1031
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property and what that really means is that you can take the profit spread them into one or multiple properties and keep
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on growing your money without paying uh capital capital gains tax right off the bat um so there are there are tons of
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benefits and even even on a common Equity or JV Equity deal um you could depreciate the property just like you
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would buying a single family investment home on your tax returns so there's numbers of benefits and on top of it all
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it's just good to have investment uh commercial real estate portion of your investment sorry portion of your
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investment in commercial real estate so what's next for your company we're
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growing really fast um we closed our serious B funding in July of 2015 of $35 million in total we raised close to $42
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million in the past two years we're po to grow um we have over 70 employees uh
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Nationwide we have we have offices in San Francisco New York LA and uh Atlanta and Houston we're growing um we are
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putting more and more PL uh properties and products on our platform we've been
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attracting hundreds if not thousands of investors um on on a monthly basis so far there are 7 73,000 uh members at
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realm.com constantly convert deals and making Investments thank you for joining us today thank you for the
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opportunity [Music]