San Francisco 49ers’ Richard Sherman (25) warms up before an NFL football game against the Los … [+]
Day’s curiosity led to conversations with 49ers teammate Richard Sherman and 49ers performance therapist Tom Zheng. The three of them decided to co-found the Players Company, an educational and investment platform for professional athletes and other accredited investors.
On Tuesday, the Players Company is announcing a partnership with Mogul Club, a real estate investment firm founded two years ago by Alex Blackwood and Joey Gumataotao, who worked together in Goldman Sachs’s real estate private equity group.
Mogul Club is launching a fund for Players Company members interested in investing in single-family rental properties across the United States. It is the Players Company’s first foray into real estate, but it has made eight venture capital investments in startups and has offered free educational resources available to all members, who don’t pay a fee to join and are not required to invest in the offerings.
“We think the Players Company’s mission is admirable, and we think that it’s incredibly aligned with what we’re looking to do,” said Blackwood, who is Mogul Club’s CEO. “We’re looking at democratizing access to real estate, and they’re looking at democratizing access for their athletes to all types of investments.”
Zheng, the Players Company’s CEO, said Day and Sherman noticed most NFL players only play a few years in the league and do not have guaranteed contracts. As such, they saw an opportunity to share wisdom with their colleagues about saving and investing and making their money last and grow well past their playing career.
“Unfortunately, if you don’t have a safe space or people you can trust, things can get weird pretty quick,” Zheng said. “That’s the overall mission with the Players Company. Our biggest strong suit is actually not investment. It’s education and empowerment.”
Zheng noted the Players Company offers resources such as defining financial terms like a capitalization table and a non-qualified stock option.
For its venture investments, the Players Company sources deals from established venture capital funds and forms a special purpose vehicle through which members can invest in individual companies. Some of its investments include Public.com, an investing platform; Teamworks, a sports technology company that has raised $165 million; and BetDEX, which operates a sports betting exchange.
At first, the Players Company worked exclusively with NFL players, but it then expanded to other professional athletes. This year, it has opened up membership to company founders and accredited investors, which the Securities and Exchange Commission defines as anyone having a net worth of more than $1 million excluding a primary residence or an income of more than $200,000 for an individual or more than $300,000 for a couple for the past two years.
Zheng estimates about 1,200 people are members of the Players Company. Most are professional athletes, with NFL players accounting for the largest percentage, but the company expects accredited investors to become a bigger presence simply because there are many more accredited investors than professional athletes.
For the past year or so, the Players Company has been looking to expand into providing real estate opportunities. Zheng, Day and Sherman got connected with Mogul Club and become intrigued with its platform.
At Goldman, Blackwood and Gumataotao worked together on a team that deployed hundreds of billions of dollars into equity and debt investments in multiple commercial property types, including offices, industrial and apartments. Goldman’s funds usually had a minimum investment of at least $10 million, according to Blackwood, excluding all but the wealthiest people in the U.S.
In early 2022, Blackwood and Gumataotao started Mogul Club with the thesis that they could take what they learned at Goldman in terms of evaluating deals and making prudent decisions but opening up the opportunities to a much larger group of people. Mogul Club has raised $4.2 million of funding from investors that include Tim Draper & Associates, former Treasurer of the U.S. Rosie Rios and executives from Goldman, JPMorgan and the Carlyle Group.
Mogul Club invests in the single-family rental sector, primarily in the Sunbelt region. It typically purchases homes for between $500,000 to $1 million in off-market transactions thanks to relationships with brokers. It also can do sale-leaseback deals, where it buys homes from their owners, who then sign a 10- to 15-year lease agreement. Mogul Club usually takes out loans for 70% to 75% of the home’s purchase price.
The fund Mogul Club is launching with the Players Company is looking to raise $5 million of equity and make $15 million of investments in single-family homes in markets such as Atlanta, Birmingham, Ala., Charlotte, N.C., Dallas, Houston, Nashville, Tenn. and Yucaipa, Calif., which is about 70 miles west of Los Angeles.
Players Company members can invest in the fund or in the individual properties themselves. The minimum investment is $25,000. Blackwood expects investors will receive monthly dividends and will be able to track their progress on a portal that Mogul Club has set up for the fund.
While many other fund sponsors require investors to lock up their investments for years, Players Company members can sell their stake after a year, but that will be subject to a 3% fee. They will also be subject to a 2% fee if they want their money back after two years and a 1% fee if they want liquidity after three years. After that, they will not face any fees.
“For the average investor and average athlete, they can’t access the same funds that we were investing out of at Goldman,” Blackwood said. “This is that alternative. We are the alternative. We took our Goldman Sachs training and now we’re applying it to the masses in the single-family rental asset class.”
Although the Players Company is just starting its partnership with Mogul Club, Zheng anticipates the firm will expand in the real estate sector in the next few years. The Players Company is also contemplating other investment classes such as franchising with car washes, fitness centers or other retailers.
“At the end of the day, it’s all a choice (for members),” Zheng said. “Our biggest thing is empowerment. We just want to help you make educated decisions for the most part and answer any ancillary questions. You’re not obligated to invest in any of the offerings we have, and you’re free to peruse them and kick the tires if you wish.”
He added the Players Company is looking to follow the vision Day set forth in 2019: to “build a pretty good community where it’s a safe space, you can ask questions, and you can talk about certain things without any type of negative connotation.”
