MogulREIT I vs MogulREIT II: Two Different Strategies, Two Different Failures (2026 Data)

The Setup: Two REITs, One Platform, Different Pain

RealtyMogul launched two non-traded REITs targeting different investor objectives. MogulREIT I (the Income REIT) was launched in 2016 as a commercial real estate debt fund; by December 31, 2025, 22 of its 23 debt investments had paid off and 15 of its 16 positions were joint-venture property equity (FY2025 Form 1-K). MogulREIT II (the Apartment Growth REIT) targets capital appreciation through multifamily equity ownership.

Both were open to non-accredited investors with a $5,000 minimum. Both performed poorly through the 2022–2025 commercial real estate downturn. And as of May 2026, both are paused to new investors (since July 11, 2025, when RM Securities filed Form BDW with FINRA — the broker-dealer withdrawal preceded the November 6, 2025 Wideman Company acquisition). On April 21, 2026, both REITs' Share Repurchase Programs and Distribution Reinvestment Plans were suspended — meaning existing investors currently have no formal redemption path either.

This article is for existing investors who need to understand what happened, and for anyone considering an investment when these REITs reopen.

MogulREIT I: The Income REIT

What It Is

MogulREIT I was designed for income-seeking investors who want regular distributions from a diversified commercial real estate debt and equity portfolio. The fund must allocate at least 55% to mortgage-related instruments (debt) — loans, preferred equity, mezzanine debt — with the balance in joint venture equity.

Since inception in late 2016, the fund has made 109 consecutive monthly distributions totaling $45.3 million (as of December 2025). That streak is real. What it hides is more complicated.

NAV Collapse

An investor who put in $10,000 at or near the peak now holds shares worth approximately $6,200 — before accounting for the reduced distributions.

Distribution History and the Return-of-Capital Problem

The most-cited fact about MogulREIT I in third-party analysis is the claim that distributions in 2022 and 2023 were classified as 100% return of capital for tax purposes. The exact percentage breakdown of return-of-capital appears on individual investor 1099-DIVs (not in the 1-K), so we can't directly verify the 100% figure from primary SEC filings. What the FY2025 1-K does confirm is the boilerplate language that distributions can be "characterized for federal income tax purposes as (i) ordinary income, (ii) non-taxable return of capital, or (iii) long-term capital gain" — and the underlying loss profile makes return-of-capital characterization plausible.

When a REIT labels distributions as "return of capital," it means the fund was not generating enough actual income to pay out the stated distribution. Instead, it returned investors' own money to them — masquerading as yield. This reduces investors' cost basis but isn't the income it appears to be.

The distribution timeline (verified against the FY2025 Form 1-K filed April 30, 2026):

• 2016–November 2025: Effective ~6.0% annualized yield, paid monthly. Per-share dollar amount declined as NAV declined ($0.0018 → $0.0017 → $0.0015 → $0.0014 → $0.0013).
• December 2025: Per-share rate cut from $0.0013/share daily to $0.0008/share daily — implying ~4.0% annualized on the then-current $7.49 NAV.
• Effective January 1, 2026: Distribution cadence transitions from monthly to quarterly.
• Q1 2026: Daily rate of ~$0.0006304 → $0.0006156 — implying ~3% annualized yield.
• Q2 2026: approximately 1.5% of NAV annualized (Form 1-U filed July 17, 2026).
• 2025 aggregate distributions: ~$5.47M (down from ~$6.7M in 2024 — 18.3% YoY decline).

What is clear: investors who bought for 6% income now receive ~1.5% of NAV (Q2 2026) paid quarterly, and the 1-K explicitly attributes the trajectory to "broader market conditions, including capitalization rate expansion."

Portfolio and Liquidity

MogulREIT I holds 16 investments across 7+ states, with total assets reported at $485 million on the product page (though an April 2024 filing cited $386 million in real estate value — a significant discrepancy that likely reflects different definitions of "total assets" vs. "real estate value" without leverage).

Liquidity is the most significant operational problem — and as of April 21, 2026, it became the binding constraint. The Share Repurchase Program had allowed quarterly redemptions with a 12-month initial lockup and a 5%-of-weighted-average-shares annual cap. In 2025, MogulREIT I repurchased 586,296 shares for ~$4.52M at an average price of $7.72/share. Then on April 21, 2026, the board suspended the SRP entirely.

Verbatim from the Form 1-U filed April 29, 2026, signed by Christopher D. Wideman: "On April 21, 2026, the board of managers of the Company approved the suspension of the Company's Share Repurchase Program ('SRP') to preserve liquidity and financial flexibility as the Company actively manages through a period of portfolio transition. Effective as of April 21, 2026, the Company ceased repurchasing shares of its Common Stock pursuant to the SRP and is no longer accepting or processing any repurchase requests submitted pursuant to the SRP on or after April 21, 2026."

The DRIP was suspended on the same date. There is currently no formal redemption path for MogulREIT I investors. The April 2026 suspension halts the queue entirely. In August 2024, RealtyMogul had already disclosed in an SEC filing that the fund was "receiving requests for the repurchase of shares in excess of the repurchase limit." The April 2026 suspension is the natural endpoint of that excess-demand dynamic.

MogulREIT II: The Apartment Growth REIT

What It Is

MogulREIT II was designed for investors who want exposure to multifamily apartment appreciation plus some income. The fund invests in value-add apartment communities — properties where management improvements and occupancy increases are expected to drive returns — plus industrial assets with stable credit tenants.

Launched in 2017, MogulREIT II maintained its 4.5% annualized distribution through Q3 2025. Then the board paused distributions entirely starting Q4 2025. Per the FY2025 Form 1-K filed April 30, 2026: "in January 2026 our board of directors temporarily paused distributions to preserve liquidity and financial flexibility as the Company actively manages through a period of portfolio transition (the 'Distribution Pause'). As a result, no distributions have been paid with respect to the quarter commencing October 1, 2025 or any subsequent period." No subsequent distribution had been declared as of the 1-K filing date. Aggregate 2025 distributions paid: ~$1.42M (down from ~$2.33M in 2024 — a 39% YoY decline before the full effect of the pause).

NAV Decline

An investor who put in $10,000 at inception now holds approximately $6,360 in NAV — a 36.4% loss on principal (our arithmetic).

The 83% Problem

A 4.5% distribution that's been maintained without a cut sounds good. The independent analysis from Noyack (April 2025) reveals why it shouldn't.

In 2024, only $400,000 of $2.3 million in distributions (17%) came from cash operations. The remaining 83% came from asset sales or investor capital. A fund that pays distributions primarily by selling assets or returning investor capital is not generating the income it appears to generate. It's depleting the portfolio to maintain the appearance of stability.

This is the same dynamic as MogulREIT I's return-of-capital problem — just expressed differently.

Portfolio Concentration Risk

MogulREIT II holds only 10 properties (8 multifamily, 2 industrial) across roughly $285 million in total assets and a much smaller net NAV of approximately $43.8 million. Ten properties is a small portfolio for a fund marketed to retail investors.

The Sunbelt concentration (62% of assets in Sunbelt markets) adds another layer of risk. The Sunbelt multifamily story of 2021–2022 — massive oversupply, rent growth below pro forma, bridge loan expirations — is precisely the context in which this fund's performance has deteriorated.

Real Investor Returns

Physician on FIRE invested in MogulREIT II in April 2018 and has documented his experience publicly across multiple years. His most recent update: an IRR of 4.85% annualized over 7+ years — down from nearly 9% measured in 2023 when he first published the analysis. He began requesting redemptions in late 2022. As of 2025, approximately 1/3 of his position remains outstanding after 2.5 years of quarterly redemption requests.

Noyack's independent analysis (April 2025) calculates a net total annualized return since inception of 2.6% and a 1-year return of -15.8% (to April 2025).

Side-by-Side Comparison

Which Performed Better?

By every meaningful metric, neither REIT performed well. But the comparison reveals they failed differently:

If you held MogulREIT I: You lost more NAV from peak (-38.4% vs. -36.4%) and had your income progressively cut from 6% to 3% (Dec 2025 → Q1 2026) and to ~1.5% of NAV in Q2 2026, with a transition from monthly to quarterly cadence. The fund nominally has debt-priority protections, but reported return-of-capital characterization in 2022–2023 suggests the "income" was largely illusory even before the cuts.

If you held MogulREIT II: You lost less NAV but the maintained distribution stopped entirely starting Q4 2025. An 83% reliance on asset sales to fund 2024 distributions (Noyack analysis) was the warning; the January 2026 board-approved distribution pause is the natural endpoint. The -15.8% 1-year return (Noyack, April 2025) is particularly alarming for a fund labeled "Growth."

Both REITs: As of April 21, 2026, the Share Repurchase Program and DRIP are suspended. Existing investors have no formal redemption path. The April 30, 2026 Form 1-Ks signal a coordinated wind-down posture — not a bankruptcy or audit-distress event (auditor CohnReznick LLP issued clean unqualified opinions), but a structural reality that ~11,300 retail investors holding ~$214.5M of cumulative capital are effectively locked. The full forensic read of the FY2025 1-Ks is here: MogulREIT NAV Crash 2025-2026.

The income vs. growth framing was real in strategy but not in outcome. Both delivered roughly 2–5% annualized over multi-year holds — dramatically underperforming the S&P 500 (~13–15% annualized over the same period) and comparable alternatives like Fundrise (which averaged 5.5–7.1% net returns in 2024–2025) or EquityMultiple Alpine Notes (7.35% with zero defaults).

The Wideman Acquisition: What Changes?

On November 6, 2025, RealtyMogul's parent company, Realty Mogul, Co., underwent a change of control: it was merged into RM Investor, LLC, which is managed by The Wideman Company, LLC and wholly owned by RM Venture Partners LLC (Form 1-U, report date November 6, 2025, filed November 13, 2025). November 10, 2025 is the date of the press release, not of the change of control. Wideman is an Orlando-based commercial real estate firm; its size (about $1.2 billion of managed assets, 50+ years) is Wideman's own claim, not in the Form 1-U, and we have not verified it.

Key commitments from Wideman:

• Personal co-investment on every new deal listed on the platform
• "Seamless transition" framing in the press release

Jilliene Helman resigned as CEO at the closing of the November 6, 2025 sale; Christopher D. Wideman has been CEO since December 4, 2025.

What the acquisition does NOT directly address:

• The existing MogulREIT I and II portfolios are not immediately restructured
• Distribution rates are not guaranteed to change under new ownership
• The redemption backlog is frozen: both Share Repurchase Programs were suspended on April 21, 2026
• The pause to new investors continues; the Income REIT's new offering statement was withdrawn on September 10, 2026

The acquisition may improve new deal quality going forward. It does not retroactively fix the NAV declines or distribution cuts that existing REIT investors have experienced.

Who These REITs Were Right For — And Weren't

What Existing Investors Should Do

If you hold MogulREIT I or II:

1. Know that redemption requests are not being accepted. Both Share Repurchase Programs were suspended on April 21, 2026, so there is no queue to join until they are reinstated; before the suspension the queue was 2–4 years. If the programs are reinstated, note that the first 12 months have a lockup; years 1–3 have early redemption penalties (2%, then 1%).

2. Check your distribution tax classification. If your 2022 or 2023 1099-DIV (or K-1) shows any distributions as return of capital, update your cost basis accordingly. This is not just a tax issue — it indicates the fund was not generating the income it appeared to distribute.

3. Watch the offering circular refresh. The Income REIT's new offering statement was withdrawn on September 10, 2026. If RealtyMogul reopens these REITs under Wideman ownership, read the updated circular carefully. Look for: changes to the portfolio strategy, updates to distribution guidance, any changes to the redemption program, and how the existing NAV declines are framed.

4. Don't over-index on the "109 consecutive distributions" metric. A streak of distributions is meaningful only if those distributions came from income. Return-of-capital distributions preserve the streak while destroying the underlying rationale for it.

5. Consider tax-loss harvesting. If you're in a loss position (which most recent investors are, given the NAV declines), consult a tax advisor about whether realizing the loss makes sense given your overall tax situation. Non-traded REITs have limited loss-harvesting options, but the question is worth asking.

The Bottom Line

MogulREIT I and MogulREIT II represent different strategies that converged on similar disappointments. Income investors got return of capital and a 50% distribution cut. Growth investors got -15.8% annual losses and a distribution that's 83% portfolio liquidation.

The 5% annual redemption cap is not a quirk or edge case — it is a structural feature that makes both REITs effectively illiquid for the foreseeable future, regardless of what happens to NAV or distributions.

For investors who held either REIT since inception, the 7-year IRR of ~4–5% is real money — but it underperforms every major public market alternative over the same period and most competing crowdfunding products.

For context on the broader RealtyMogul platform, see our full RealtyMogul review including the Wideman acquisition details. For head-to-head comparisons with the alternatives that are open to new investors right now, see RealtyMogul vs Fundrise and Arrived Homes vs RealtyMogul. For platform-wide context, see our accredited investor platform comparison and our Fundrise Portfolio Comparison for a non-traded eREIT that has performed differently through the same environment.

For the latest 2026 forensic update — including the FY2025 Form 1-K filed April 30, 2026, the April 21 2026 Share Repurchase Program suspension, the MogulREIT II January 2026 distribution pause, and the verbatim auditor opinion — read our dedicated explainer: MogulREIT I & II NAV Crash 2025-2026. For the structural question of bankruptcy-remoteness, see Bankruptcy-Remote Real Estate Crowdfunding Platforms.

— Jorge