Realty Mogul, a startup that allows accredited investors to back real estate projects, is announcing a new agreement with Direct Lending Investments — the investment firm has committed to invest $73 million in Realty Mogul projects.
This is the startup’s first partnership of this kind with an institutional investor, but founder and CEO Jilliene Helman said she’s interested in pursuing similar deals with other investors. The goal, she said, is not to “cut off our high net worth accredited investors,” but rather to increase the amount of capital on the platform and to further validate Realty Mogul in the eyes of its real estate industry partners.
Moving forward, the platform will randomly determine which projects get presented to individual investors and which projects get presented to Direct Lending Investments.
Realty Mogul’s model is similar in some ways to more consumer-focused crowdfunding sites — users look at different projects (in this case, real estate investments), decide which ones they want to back, only pay when and if a project is fully funded, and receive regular updates afterwards. In other ways, it’s very different — these really are meant to be investments (with regular cash distributions), and as I mentioned, you need to be an accredited investor to participate.
For that reason, Helman said she has moved away from the crowdfunding label and now describes Realty Mogul as an “online capital market.” The company says that more than $30 million has been invested through its platform.
The company, by the way, also raised a $9 million Series A earlier this year.
“Real estate is the next frontier in peer-to-peer lending, and Realty Mogul is leading the way,” said Brendan Ross, president and portfolio manager of Direct Lending Investments, via email. He later added, “This deal will funnel capital to professional home rehabbers many banks have left behind, helping them revitalize their neighborhoods and property markets around the country.”