How Realty Mogul CEO Jilliene Helman Launched One of the Fastest-Growing Crowdfunding Platforms in the US
Realty Mogul is one of the fastest-growing platforms on the rapidly growing real estate crowdfunding market. (Experts expect the industry to raise $2.57B in investments this year alone.)
Since launching in 2012, Realty Mogul has surpassed $150M in investments, spread across 265 properties now valued at $600M. We caught up with CEO Jilliene Helman to get the latest on Realty Mogul, the industry and her plans for the future.
Bisnow: Could you tell us about your background and how Realty Mogul came to be?
Jilliene: I grew up in a real estate and an entrepreneurial family. My dad is an entrepreneur, and my mom is involved in the luxury real estate market. I always knew that I wanted to be involved in real estate. I ended up going into banking after graduating from the undergraduate business school of Georgetown.
I always knew that I wanted to start my own business, and got the company off the ground about two and a half years ago now, and we built an online marketplace for real estate investing.
I always knew that I wanted to do something in technology. Capital markets have historically been a very offline business. You haven’t seen a lot of innovation around capital markets. I also don’t think you’ve seen a lot of innovation around underwriting technology and using data to underwrite real estate transactions.
Bisnow: What kind of investments does Realty Mogul usually see?
Jilliene: We’re asset class agnostic, which means we can work in a variety of asset classes.
Bisnow: Who are your investors?
Jilliene: We have nearly 20,000 individual investors, and we have a number of institutional investors. Most often, our individual investors are investing in equity securities and our institutional investors are buying debt that is originated by Realty Mogul.
Bisnow: Could you tell us about the first property that Realty Mogul successfully invested in?
Jilliene: The first deal that we ever did was a single-family home in Southeast LA, so not a great part of Los Angeles. It was a $110k loan. Looking back from that first transaction to what we’re working on now, we’re working on substantially larger projects now and in many markets in the country.
Bisnow: How does something like Realty Mogul democratize the real estate industry?
Jilliene: I think for individual investors who are qualified investors, we give them access to an asset class that they didn’t historically have access to. It’s been very easy to buy stocks and bonds online, as an example, for quite some time but it was never easy to get exposure to the real estate markets. These markets are private. It’s hard to do due diligence on private transactions, so I think that we bring a level of accessibility to individual investors that they really have not had before.
Bisnow: How many first-time investors do you work with?
Jilliene: We’ve had some investors who this would be their first exposure to real estate, and we’ve had some investors who’ve been investing in real estate for 30 years. There are different benefits for different investors, but across the board I think that investors are looking to save time as they are busy professionals, they’re busy with their personal lives and their professional lives. They don’t necessarily want to operate real estate. They want to own real estate.
Bisnow: What is Realty Mogul doing differently that people are unaware of?
Jilliene: I think we’re using data in a really unique way. All of our transactions are still underwritten by a human being. But we’re using data to make hypotheses, so we’re using data to say, "Is XYZ market a market that we want to be investing in?" I think that’s really unique for a real estate firm. All real estate firms use data so using data is not necessarily unique, but how we’re using data is really unique.
Bisnow: What other ways do you see technology disrupting the industry?
Jilliene: I think on the capital market side you’re going to see new sources of capital. As we mentioned, many of our individual investors maybe haven’t invested in real estate before. So you’ve got two sources of capital coming into the market where it’s going to help to make the real estate industry even more efficient. As you get more and more data as well, it helps to make the industry more efficient. Real estate is probably one of the most opaque industries. People trade on inside information because there is no public market. I think that the more and more data you bring into the process the more efficient it gets and the more and more capital you bring into the process the more efficient it gets.
Bisnow: What sets Realty Mogul apart from other crowdfunding platforms?
Jilliene: I think there’s a really big difference in our product offerings. We are one of the only crowdfunding companies or online real estate companies that does both equity and debt so we do crowdfunding for equity transactions and we raise that equity from nearly 20,000 individual investors but on the same platform we are also a marketplace lender for real estate loans, and those real estate loans are being sold largely to institutional investors so it’s this platform where we are a one-stop shop for capital markets in real estate.
Bisnow: What are your goals for the future?
Jilliene: We want to build a really big brand. We want RealtyMogul.com to become a household name in the real estate space. We want to use technology to create a refreshingly delightful user experience.
Real estate is not simple. Getting a real estate loan is not simple. Distilling all of that down and trying to make a really simple process is what we’re building and where we can excel long-term.