RealtyMogul Underwrote 2.2x and 1.8x. Its Own Filings Now Say 0.9x and 0.09x.

Why this is worth your time

Every platform publishes a target return. Almost none of them publish, in the same sentence, what the target was and what actually happened.

Regulation A forces the issue at exit, and RealtyMogul has now done it twice in nine months. That gives us something the industry almost never provides: a matched pair of underwriting and outcome, disclosed by the sponsor, on named assets. Whatever you think of RealtyMogul, this is more disclosure than most of its competitors offer, and it deserves to be read rather than buried in a supplement.

We keep a running forensic review of MogulREIT I and a separate piece on the NAV decline and the Wideman acquisition. This article is about a narrower and more transferable question: what does a real underwriting miss look like from the inside?

Case one: the deal that worked, for the property

Read that table twice, because the lesson is in the gap between two lines that both look like good news.

The property was bought for $19.05 million and sold for $24.25 million. Rents rose 44%. A hundred and two units were renovated, the exteriors were redone, there is a new gym and a new leasing office. On any measure of the building itself, this went fine.

The equity still came back at roughly 0.9x. An investor who put in a dollar got back about ninety cents, before considering what six years of that dollar was worth elsewhere.

Three things did it, and the filing names them. Leverage: a property-level gain of 27.3% is not an equity gain of 27.3% once a mortgage sits in front of you, and the direction cuts both ways. Capital calls: the REIT put in another $1,275,000 after the original $9,177,966, which raises the denominator without raising the sale price. And the operating shortfall: "Persistent challenges with economic occupancy, rent collections, and elevated unit-turn costs resulted in performance materially below underwriting," so the income that was supposed to accrue over the hold never arrived.

RealtyMogul's own framing is that selling was the right call: it "accepted an offer meaningfully above our carrying value for NAV purposes," having judged that the asset needed "substantial additional capital to stabilize." That is a defensible decision, and the disclosure of it is genuinely good practice. But the deal that gets described as a successful exit is a 0.9x, and if you only ever see the sale price you would never know.

Case two: the deal that a law killed

A $3,000,000 investment returning $175,665 is a 94% loss of the equity, and the filing is direct about the cause.

The plan was to buy out and renovate about 19 units. Then, in June 2019, New York passed the Housing Stability and Tenant Protection Act, which in RealtyMogul's description "removed the ability to meaningfully raise rents when a rent-stabilized tenant moved out, limited the amount by which landlords could increase rents after renovating an apartment, and made rent stabilization permanent, meaning units remain regulated even after turnover."

That is a business plan being made illegal to execute, about eighteen months after the money went in. The filing says the HSTPA "caused unit renovations and major capital improvements ... to no longer be profitable," and the plan was switched to holding occupancy and raising rents only where the law allowed. The property value fell 46.7%, the loan hit maturity default in September 2025, a forbearance with a discounted payoff followed in April 2026, and the equity was sold for scrap value in July.

The risk that showed up here was legislative, and it was not diversifiable inside the deal. Nothing about the sponsor's execution, the submarket or the interest rate cycle would have saved it. That is a category of risk that a target-return page cannot express, and it is worth carrying into any rent-regulated market: New York, but also California, Oregon, Minneapolis and a growing list.

What this means for the money still inside

Neither of these is an abstraction for current holders, because MogulREIT I's own terms have moved a long way in a short time.

The distribution. MogulREIT I paid monthly for years at a headline 6.0% annualized. It went to 4.0% for December 2025, 3.0% for the first quarter of 2026, and 1.5% for the second, and the cadence itself changed from monthly to quarterly effective for periods beginning on or after January 1, 2026. The July 17, 2026 filing shows how far the compounding of a falling NAV and a falling rate goes: the same 1.5% was calculated first on a $7.49 NAV and then, from June 1, on a $6.85 NAV, so the dollar amount stepped down inside a single quarter, from $0.0003078082 to $0.0002815068 per share per day.

The board's own language is worth keeping: "The annualized basis return is not a guarantee or projection of future returns, and the board of directors may in the future authorize lower distributions or no distributions at all for any given period." On the sibling fund, MogulREIT II, that has already happened, distributions having been paused since January 2026.

The half of the distribution that was never money. This is the finding that took cross-checking two filings, and it is the one I would want to know if I held this.

The Form 1-U of August 6, 2026 says that cumulatively since inception the REIT has paid 113 consecutive distributions "totaling over $47,000,000, of which approximately $23,600,000 was paid in cash and $23,400,000 was reinvested in shares of its common stock pursuant to the Company's distribution reinvestment plan."

So roughly half of every dollar ever distributed was paid in shares, not cash. That is how a DRIP is supposed to work and plenty of holders chose it deliberately. The problem is what those shares are now worth and what can be done with them: NAV has fallen from $10.73 at the end of 2022 to $6.85, and on April 21, 2026 both the DRIP and the share repurchase programme were suspended, the latter having already been rationing requests pro rata because they exceeded the programme limit.

There is a neat way to see that the DRIP genuinely stopped. Compare the same disclosure across filings: in December 2025 it read $45,300,000 total, $21,900,000 cash and $23,400,000 reinvested; in August 2026 it reads $47,000,000 total, $23,600,000 cash and $23,400,000 reinvested. The cash number moved by $1.7 million and the reinvested number did not move at all. Every dollar distributed in between was cash, because there were no new shares to issue.

And the current NAV is stale. The $6.85 was published as effective from June 1, 2026 and stated to hold until updated "on or about June 30, 2026." As of today, August 25, 2026, no June 30 NAV has been filed for either REIT. That is roughly two months late for a figure that is also the purchase price and the distribution denominator. It may simply be a slow quarter in a company that changed control, state of incorporation and chief executive inside twelve months. It is still the number to watch for next.

Update, September 19, 2026: both NAVs were filed on September 17, 2026: $6.79 for MogulREIT I (Form 1-U, accession 0001493152-26-043163) and $6.36 for MogulREIT II (253G2, accession 0001493152-26-043162), both as of June 30, 2026, about eleven weeks after the date the $6.85 was said to hold until.

The transferable lesson

If you take one thing from this, make it the Hamptons rather than Brooklyn.

Brooklyn is a disaster, but it is a legible one: a law changed, the plan died, the equity was wiped. Nobody will mistake 0.09x for success.

The Hamptons is the dangerous case, because every headline number about it is positive. Sold above cost. Sold above carrying value. Rents up 44%. Property value up 27.3%. A press release could be written about that exit without saying anything false. And the investor got back about 90 cents on the dollar after six years.

So when a platform tells you a deal "exited successfully," the follow-up question is not what the property sold for. It is what multiple the equity returned, against what was underwritten, over what hold period. Those four numbers together are the only honest description of a private real estate outcome, and the reason this article exists is that a sponsor put all four in a filing.

Sources

• RealtyMogul Apartment Growth REIT, Inc., Form 253G2 (Supplement No. 13), filed August 3, 2026 — accession 0001493152-26-035694. The entire Brooklyn Portfolio record: the 2017 investment, the HSTPA description, the maturity default, the forbearance, the $175,665 sale, the per-unit values, and both equity multiples.
• RealtyMogul Income REIT, Inc., Form 1-U, filed December 4, 2025 — accession 0001493152-25-026124. The Hamptons record in full, and the December cumulative distribution split.
• RealtyMogul Income REIT, Inc., Form 1-U, filed July 17, 2026 — accession 0001493152-26-033775. The Q2 2026 distribution, the 1.5% annualisation on both $7.49 and $6.85 NAVs, and the April 27, 2026 conversion to a Maryland corporation.
• RealtyMogul Income REIT, Inc., Form 1-U, filed August 6, 2026 — accession 0001493152-26-036395. The 113 consecutive distributions, the $47,000,000 cumulative total and its cash-versus-reinvested split, and the monthly-to-quarterly language.
• RealtyMogul Income REIT and RealtyMogul Apartment Growth REIT, Forms 1-U filed April 29, 2026 (accessions 0001493152-26-019655 and 0001493152-26-019664) and Form 1-U filed January 28, 2026 (accession 0001493152-26-004042), for the April 21, 2026 suspension of the DRIP and the share repurchase programme and the change to a quarterly distribution cadence.

The distribution-rate ladder above is drawn from the successive Forms 1-U cited; the 1.5% figure and the $6.85 and $7.49 NAVs were read directly from the July 17, 2026 filing. Nothing in this article is investment advice. We hold no position in either REIT and earn no commission from RealtyMogul.