Mogul real estate investing

[Mike FitzPatrick]

Just wondering if anyone has experience with Mogul?  

💬1 - mogul | Headache-Free Fractional Real Estate Investing

Any information appreciated.  

Merry Christmas,

Mike FitzPatrick

[Greg Scott]

Until your post, I had never heard of them.  As a real estate investor with two decades of experience, here are my reactions looking at their website:

- They've only been in business since 2021 so their track record is minimal.

 - If you can invest as little as $250, this is the equivalent of a mutual fund.  Be very mindful of the fees, who has control, who makes the decisions, understand the penalties for getting out early, etc.  

- $22M in assets is not a lot for an investment of this nature

 - 18.8% annualized return is a guess, at best.  Real estate is an non-liquid asset.  There is no way they bought and sold a bunch of stuff between 2021 and today.   They claim to hold the properties 3 to 10 years.  This means they have estimated the value of their portfolio and based on that estimate, if everything were sold, you might get an 18.8% return.  However, if I were making that estimation for marketing purposes, I am incentivized to estimate a very high number.

 - 2.6% yield.  This number is much harder to manipulate.  However a 2.6% cash on cash return is not very good when you can make more than that in a savings account.  They claim to be investing only in the SF space. If they are, they don't know what they are doing because I regularly see deals with 10% or more cash on cash returns.  It is also worth nothing that they actually say "2.6% record monthly yield" which makes it sound like their very best month ever returned a 2.6% cash on cash return.  That is not something I would be proud of.

 - I find it amusing that they show a graphic of an app showing investor returns over a 10 year period when they haven't been in business half that time.

- They show a little map saying they have analyzed over 20 markets across 11 states.  Why would they bother putting California on that list?  If they can go anywhere, looking at a state that is tenant-friendly with very high cost of entry, no cashflow, and very high and unstable insurance rates, makes no sense.  They also have Florida on the list.  I don't have too much against Florida other than the insurance costs.  However, Florida real estate has had some of the largest pricing declines over the past year, putting into question their 18.8% returns, if they have invested there.

If my children were asking me about this, I would tell them to pass, and save up enough to buy a househack. If that is not feasible, go buy a few shares of a REIT. Right now they are trading below their NAV so many of them are a good value for money.