Podcast 18: Jilliene Helman of Realty Mogul on Real Estate Investing

Realty Mogul

Without question real estate is one of the hottest sectors in marketplace lending right now. We have gone from just a couple of platforms two years ago to nearly 100 today. And more seem to be launching every week.

At the forefront of this movement is Realty Mogul. It was co-founded by Jilliene Helman less than two years ago but it has already become one of the leaders in this burgeoning new industry. Jilliene came on the Lend Academy Podcast to give investors a deeper understanding of not just her business but how and why real estate crowdfunding is becoming so popular. In this podcast you will learn:

  • How a real estate platform like Realty Mogul works.
  • The real benefit provided by the JOBS Act for platforms like Realty Mogul.
  • A complete explanation of both debt and equity investing in real estate.
  • The average loan size right now at Realty Mogul and why that will be increasing.
  • How they decide what kinds of properties to bring to investors.
  • Why Realty Mogul will have a diversified mix of properties , both geographically and type of property, on their platform.
  • The competitive advantage that Realty Mogul has over the rest of the industry.
  • What qualifies as a deal that will be approved for investors on their platform.
  • How the security interest works for the both the debt and equity investments.
  • How Realty Mogul’s portfolio of loans has been performing.
  • The key to working with borrowers who become delinquent.
  • Who the typical investor is at Realty Mogul.
  • Why it doesn’t make sense for Realty Mogul to be open to non-accredited investors under current laws.
  • The actual returns to investors from loans that have been fully paid.
  • The projected returns for equity investors.
  • Why they chose Canaan Partners as their venture capital partner.
  • Jilliene’s vision for Realty Mogul.

Jilliene also appeared on the real estate investing panel at LendIt 2014 – you can watch a video of that panel here. If you are serious about investing in real estate through a platform like Realty Mogul that video will give you an excellent background.

You can subscribe to the Lend Academy Podcast via iTunes or Stitcher. There is an audio player directly below or you can download the MP3 file here.

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rawraw
rawraw
Jun. 28, 2014 6:01 am

Are they doing global cash flows or just project cash flows? That’s a huge difference in understanding risk.

CA-Lender
CA-Lender
Jul. 2, 2014 10:10 am
Reply to  rawraw

rawraw,

Not sure what you mean by “global” versus “project” cash flows…If you are referring to equity versus debt, they are offering both types of investments. You can either lend on a real estate property or get an equity position. I believe they structure each transaction as a separate LLC, so each investor will become a member of the LLC that either lends or purchases a stake in the property. Then each member will receive a K-1 (instead of 1099s) at the end of the year.

I just invested in an equity position in their very popular Hard Rock Hotel in Palm Springs (RM LLC 20), and have no complaints.

Jilliene, if I am mistaken, please chime in.

CA-Lender

rawraw
rawraw
Jun. 28, 2014 6:06 am

And why is anyone borrowing money for real estate loans currently at 8, 9, or 10 percent?

CA-Lender
CA-Lender
Jul. 2, 2014 10:12 am
Reply to  rawraw

Although mortgage rates for SFR are near all time lows (around 4%), have you tried to get a mortgage recently? It’s become damn near impossible to get loans, especially for large, commercial projects. FWIW, over 40% of recent home purchase have been done ALL CASH (an all time high), due to the difficulty in getting a mortgage.

8-10% is actually a reasonable rate for these types of transactions.

BrendonP2P
BrendonP2P
Nov. 6, 2014 8:12 am
Reply to  CA-Lender

South Africa has good dynamics for this. Some areas alternative financing houses are charging up to 14% for mortgages on commercial and residential property. In more premium areas if you are lucky enough to get a bank loan don’t expect more than 40%-50% of market value and look at rates of about prime +1.5 = 10.75%. This would be a very compelling funding option for smaller funds.

Really good interview.