$ 17.5 million crowdfunded Modesto apartment complex


The trails at 2112 Apartments are on Floyd Avenue, just west of Oakdale Road in Modesto, California.

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Short films, record releases and new products aren’t the only things that get funded these days. Investors across the country recently pooled $ 17.5 million in capital to invest in Trails at 2112, a 97-unit multi-family complex on Floyd Avenue in Modesto.

Investors have gone through Real EstateMogul, an online crowdfunding real estate investment site. The site has a network of over 200,000 investors in a $ 3.7 billion property portfolio that includes more than 18,000 multi-family units.

CEO Jilliene Helman said RealtyMogul works closely with Capital of Valor, a Berkeley-based capital management firm, on the Trails at 2112 project, with investors from RealtyMogul raising the remainder of the share capital. According to RealtyMogul, this project is the first real estate acquisition financed by crowdfunding in Modesto, and the interest was so high that the site had to limit the number of investors.

Crowdfunding in real estate has become more common over the past decade. According to US News and World Report, real estate investors were limited to owning real estate or buying publicly traded real estate investment trusts (REITs) before 2013, when the Jumpstart Our Business Startups law came into effect.

Since then, a number of crowdfunding platforms have sprung up, allowing investors to pool their money and purchase multi-family units, commercial property or single-family home lots. Crowdfunding dramatically lowers the barrier to entry for real estate investing, and RealtyMogul is now one of a number of well-known real estate crowdfunding sites, according to NerdWallet.

Helman said units and amenities at the Floyd Avenue property will be gradually renovated, adding higher rental value to individual apartments.

She added that the majority of investors in her site have annual incomes over $ 200,000, or net worth over $ 1 million, and are located across the country. She said the high level of interest in the Modesto project is a testament to the growing strength of the local real estate market.

“We allow investors from across the country to access real estate projects across the country through our digital platform,” she said. “Modesto has been a resilient market. … There is still a desire for affordable housing in California, and Modesto was one of the (cities to) benefit from the flight to the suburbs.

Helman said RealtyMogul and the crowdfunding model can help real estate companies raise capital on projects they might not otherwise be able to fully fund, thereby opening more properties across the country. With Trails at 2112, investors are making it possible to renovate a 40-year-old property, increasing the value of each unit and providing more amenities to tenants.

“It really helps keep the housing stock in good shape,” she said.

Although RealtyMogul currently has no other active properties in Modesto, Helman said his team’s “eyes are always open”.

‘This story was produced with the financial support of the Stanislas Community Foundation, with the GroundTruth Project‘s Report for America Initiative. The Modesto Bee retains full editorial control over this work.

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Kristina Karisch is the business development reporter for The Modesto Bee. It covers economic recovery and development in Stanislaus County and the North San Joaquin Valley. Her position is funded through financial support from the Stanislaus Community Foundation, as well as the Report for America initiative of the GroundTruth Project. The Modesto Bee retains full editorial control over its work.

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