Insights

The FORT Podcast: Jilliene Helman – CEO of RealtyMogul – Real Estate Crowdfunding

Jilliene Helman is the Founder and CEO of RealtyMogul, an online real estate marketplace that gives everyday investors access to institutional-quality commercial real estate deals in dozens of markets across the country. Since 2012, RealtyMogul members have collectively invested over $850 million into $4.7 billion of real estate nationwide (as of March 31, 2022). Jilliene holds Series 7, 24, and 63 investment licenses and is a Certified Wealth Strategist. She’s been featured as an expert on startups and real estate investing on Bloomberg, CNBC, The New York Times, Yahoo! Finance, and Entrepreneur.

On this episode, Chris and Jilliene discuss:

  • A 10-year overview of how crowdfunding has evolved and the tailwinds driving it
  • Building a two-sided marketplace with sponsors and LP’s.
  • How crowdfunding works from a high level
  • What to expect from the crowdfunding industry over the next decade.

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(2:02) – Jilliene’s career and background

(4:48) – What did crowdfunding in the RE space look like when you got started in your career?

(8:29) – If you had to go start a new 2-sided marketplace today, would it be harder to do?

(11:47) – Was there an inflection point in the industry where crowdfunding became more mainstream?

(15:07) – How distributed is the money coming from crowdfunding? Are there ever a couple of individuals that carry the bulk of a fund?

(17:20) – What’s the path forward to become a top brand name over the next decade?

(20:12) – Is there any agreement that states the LP needs to go to you instead of the GP for questions or investments?

(21:39) – How do you approve and vet sponsors?

(24:57) – Have you seen institutional or family office capital get into crowdfunding?

(25:55) – How do your REITs work?

(29:09) – Is the push to have a more built out secondary market for LP’s something on your radar?

(30:55) – How do you approach Capital Call situations?

(33:24) – What data are you looking at to prove the massive tailwinds for crowdfunding?

(35:33) – Do you have to own a controlling position in the LP stack?

(36:17) – How are you seeing most people show up in a deal?

(37:44) – What’s something you think deeply about that you want to see in the industry?

 

Episode Summary

Jilliene Helman, renowned for her profound insights into the real estate sector, joined Chris Powers on his esteemed podcast to discuss the intricacies of real estate crowdfunding. Helman, a trailblazer in the real estate crowdfunding realm, has significantly impacted the way companies raise capital, evolving from modest beginnings to today’s sophisticated digital platforms.

The episode began with a deep dive into the early days of crowdfunding in real estate. Helman recalled a time when companies would typically raise between one and two million dollars per deal. However, a watershed moment occurred when a sponsor, utilizing a digital platform, successfully raised $17 million in equity for a development deal in Nashville. This success story underscored the potential of crowdfunding to rival, and perhaps even surpass, traditional institutional capital sources.

Looking ahead, Helman envisions a promising trajectory for real estate crowdfunding. The current average capital raise stands at five or six million dollars per deal. Yet, with the continuous advancements and acceptance of this method, she predicts check sizes could soar to the realm of tens of millions of dollars in the coming decade.

The journey of Helman’s own crowdfunding platform offers a testament to the industry’s growth. Starting with a modest $110,000 duplex in Compton, the platform gradually garnered trust, scaling its operations and milestones. From its humble beginnings with investments from close acquaintances, the platform evolved to attract diverse investors, some of whom Helman had never met. This evolution, from raising $1 million to eventually reaching the $100 million mark in aggregate, epitomizes the potential and credibility of crowdfunding in real estate.

A pivotal point in the conversation centered on the timing of entering the crowdfunding market. Helman emphasized the challenges of being too early, which required substantial efforts in educating the market. Conversely, entering too late presented hurdles in gaining critical mass, as real estate companies and investors had already established affiliations with specific platforms.

As the dialogue underscored, the key to successful crowdfunding lies not just in amassing capital but in fostering genuine relationships. Helman spoke about the importance of humanizing the brand, ensuring that both sides of the marketplace, investors and real estate companies, derive tangible benefits.

Regarding the future, Helman expressed an earnest desire to diversify the types of deals available on crowdfunding platforms. She envisions a broad spectrum, ranging from cold storage and mobile home parks to distressed deals. This vision is anchored in a commitment to provide investors with broader access, enabling them to venture into realms they might not have considered independently. Notably, while multifamily deals currently dominate the platform, Helman’s objective is to expand beyond this niche, adhering to the core value of empowering investors with a diverse portfolio.

In conclusion, this enlightening episode with Jilliene Helman offered a panoramic view of the real estate crowdfunding milieu. The journey from initial skepticism to today’s widespread acceptance paints a promising picture for the future. For anyone keen on understanding the complexities and potential of real estate crowdfunding, this episode stands as an invaluable resource. Through Helman’s expert reflections, listeners are equipped with the knowledge to navigate the dynamic landscape of today’s real estate crowdfunding world.

 

The Fort is produced by Johnny Podcasts

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