Alex Blackwood is the co-founder and CEO of mogul Club, an online-based platform where you can sign up and, in less than 30 seconds – and for as little as $250 – be invested in shares of a cash-flowing, single-family rental property, vetted by industry professionals. He explains how his company is delivering 18% returns to its customers.
What is Mogul?
“Mogul is effectively an online-based platform where someone can sign up and, in less than 30 seconds, be invested in shares of a cash-flowing, single-family rental property, vetted by industry professionals. And so, they receive rental income on a monthly basis, appreciation in real-time, and tax benefits at year-end, all starting at $250 minimums all the way up to $250,000 investments.”
How Alex and his business partner came up with the concept:
“So, we said, ‘There’s got to be a better way to invest in real estate in a completely capital-efficient manner where I can just throw in $250 into multiple different properties, solve for concentration risk, and get rental income appreciation in real time and the tax benefits.’ And so, that’s what we were trying to solve – solving for the capital requirements, the time commitments you had to do, all of which we thought were a tremendous burden on the investors.”
The types of properties and how it works:
“Single-family rental properties, typically long-term leases or short-term leases. We operate them, cash-flow them, and syndicate out the equity in them. So, everyone receives that rental income on a monthly basis and appreciation in real-time.”
The hook for why people want to be part of this:
“The American Dream is a large reality of this, but it’s also the idea of the wealth gap and transcending it. And actually, elevating and leveraging equity in a home to move beyond one socioeconomic class into another, and even a potential higher one.”
Why it’s financially advantageous to be a homeowner (or own a stake in one):
“And so, the government wrote the tax code to incentivize home ownership. They came up with this idea that said even though your asset is appreciating in value, and the land is appreciating in value because there is a finite supply of it, and maybe a town is getting a ton of influx of population, you can actually utilize the asset structure and say that it is depreciating in value because physically it actually is deteriorating over time. And so, the government put in place this idea of depreciation as a ghost tax expense that even after everything you receive, you can put 60% of your purchase price divided by 27.5 years (attributed to the life of the asset) on a yearly basis against the rental income that you have.”
Leaving Goldman Sachs to start Mogul:
“No regrets. I’d say it’s definitely harder than my time at Godman Sachs, but no regrets whatsoever. I think what we’re doing, and we’re seeing the fruits of our labor pay off … the fact is, the actual enthusiasm for the product, the response to the product, the emails that we’ve received, just gratefulness, and thanking us for creating this platform and starting it, has been more than enough. It’s been incredible, and so we’ve been growing like crazy. The platform assets have been returning 18.8% average IRRs, which is eclipsing every single investment platform out there. It’s been a wild journey. It’s been hectic. I’ve learned a ton of things.”