In less than four years, Roofstock has produced more than $2 billion in single-family rental property purchases. This Roofstock’s review delves into their inventory of turnkey rental assets. We risked our capital to see if they were a good bet. Can Roofstock really keep their promises?
For the past few months, I’ve been fascinated with rental properties. Yes, it took me quite some time before I’ve made up up my mind about real estate investment properties. There is too much to consider and learn about this real estate investing business.
Real estate investing can be a potential source of good money. So, if you’ve got money to spend, real estate can be a profitable way to increase your long-term income.
There are several approaches you can take, but one of the most common is to purchase rental properties. Having a rental property could provide you a consistent source of passive income.
If you’ve been considering investing in rental estate, the market provides a wide range of options. There are also companies that focus on assisting investors in looking for a particular type of rental property.
I’ll explore Roofstock and in this article, I’ll share my experience with it. You can then decide whether or not it is worth investing on.
We’re going to review multiple aspects of Roofstock to decide if it really is the best real estate investment platform out there.
We’ll talk about whether investing in fine art is the right online business for you.
At the end, I’ll answer some of the most frequently asked questions regarding Roofstock and real estate investing in general.
And most important, I’ll show you the exact system I used to build my own internet marketing business to over $50,000 a month in mostly passive income.
This system made me swear off just investing in art for good, because it uses some of the same skills in a much more powerful and profitable way!
Minimum Investment: $1,000
Management Fees/ Transaction Costs: One-time 0.5% purchase fee
Promotion: Open a Free Account
Investment Type: Single-family rental properties
Investment Model: Turnkey
Accredited Investors Only: No
Mobile App: No
BB Ranking: B+ rating
Roofstock is an online platform for turnkey rental properties that specializes in single-family rental properties. Real estate investors care turning to rental properties because they’ve discovered the many advantages it can potentially bring.
A fundamental condition to have a property listed is that it be leased by tenants who fulfill Roofstock’s stringent screening criteria.
We only consider turnkey options since we are investors rather than real estate experts.
Roofstock’s target demographic is working professionals who prefer profitable rental homes without requiring their precious time and energy to do the works.
Roofstock, as opposed to most other sites where you can find turnkey rental properties, doesn’t possess ownership of the listed properties in their marketplace. Rather, their focus is on reviewing, negotiating, and closing real estate deals.
In effect, they aren’t selling you anything, but rather, they are trying to bring value to an already complex process.
Roofstock is a real estate investment firm that focuses on single-family rental properties where they give you the opportunity to invest in real estate. They have a large number of homes for sale, and you can earn by having them rented out.
One interesting aspect of Roofstock is that the properties listed in the marketplace are already being leased. Homeowners, essentially, are listing their properties on Roofstock because they want to move on from rental property investing.
And then, potential owners or investors buy these assets and begin earning a consistent stream of profits right away.
You might be curious why the former owners would opt to sell a potentially profitable estate. The explanation is quite simple. The majority prefer to have their investments diversified, or that they do not want to trouble themselves of being a landlord.
In any case, it’s an ideal investing choice for someone looking for a passive income stream who is familiar with the real estate industry.
Roofstock has a robust framework in place to make sure that the homes sold by their program are kept to certain standards. Before a property can be considered, for instance, it must be certified first.
A variety of considerations contribute to a property’s certification. The property must first be reviewed by a licensed investment property inspection company.
After which, all maintenance and repair costs must be assessed, to be accurately assessed. Other requirements include property photos, a title report, and floor plans.
In light of this, it is clear that Roofstock makes sure the highest quality of their assets is maintained. They work hard to provide only the best single-family rental homes. Roofstock, in some instances, turns down to advertise a property if the seller requests a price that they believe is too high
Purchasing a property on the other side of the globe without even inspecting it necessitates a high level of confidence. And with Roofstock, this is something that they take seriously.
They try to have as much detail about the property as possible to make you more secure in your purchase. Roofstock Certification is comprised of all of these quality checks, as well as standards.
Roofstock certification is granted based on the following criteria, as stated on their website:
Additionally, Roofstock offers a 30-day money-back guarantee on all purchases. Although they do not own the estates, they are quite confident about their standards. If you do not get what has been agreed, they will buy back the property from you and absorb the cost.
Also, it’s worth mentioning that if you purchase a property and partner with a rent-guarantee qualified property manager, Roofstock offers a One-Year Rent Guarantee.
45 days after your property is ready, Roofstock will compensate you an amount equivalent to 75% of the estimated rent rate in the real estate market.
That’s crazy, if you ask me – it eliminates a lot of risks for the buyer.
Roofstock’s Full Property Analysis is a critical component of their certification. There are three major components involved:
The first two on the list are pretty straightforward and support the listing price. The inspection is where the magic is.
This inspection report goes through all of the key components of the properties in great detail. The first page is as follows:
This is usually 12 – 15 pages long and provides a detailed account of each section mentioned above. It contains images and, where applicable, descriptions.
The objective is to provide their users the precise condition of the property before purchasing it, which is a big part of the 30-day money-back guarantee.
Roofstock makes sure everything is laid out to you in black and white – no surprises. They profit as you profit and so, they are quite meticulous of their client care so they can build a savvy clientele.
The Roofstock Team adds the most value to the entire process. My interaction with the team was the most important factor I returned to check on a second property.
I chose a house with a fixed price for our first home purchase. An agent walked me through the process the next day after clicking “buy now” button.
The agents discussed all the necessary details such as the process, and checked on my background, and assisted me in understanding how the whole buying process would play out.
The agent then referred us to lenders and insurance brokers. Since the offers she offered were already amazing, I simply welcomed her results and carried on.
It was ridiculously easy!
A few days later, the Director of Client Services gave me a call to congratulate me on my purchase and inquire if I had any further queries.
He had no idea the many questions I had – I was on the phone with him for almost two hours. I inquired about everything I could think of – their business model and to what extent we can negotiate costs.
The Director did answer all of my questions one by one.
Another agent reached out and brought the phrase “white glove operation” to a whole new dimension. I did absolutely nothing after giving my finances’ lender proof.
This agent did all the necessary coordination with the concerned people, and in just 30 days, an appointment was set by the notary for our remote closing. It was far too easy.
If you’ve had experience buying a house, you’d understand how much effort it takes to close on a property. This was the the farthest thing from it.
I was copied on important emails and rarely asked for my opinion on minor information. The most work I did was probably digitizing important information in Evernote. Have you ever scanned more than 50 pages in just one sitting? Trust me, a good beer would go well with it.
It was just awesome to see someone else worry about the little details of the transaction. That isn’t quite the best part of the entire thing.
The real estate agent emailed me about a week after the transaction to see how things were going. Is the land transfer going well? Have I gotten my first month’s rent yet?
Most notably, how did we rate our property manager? Roofstock would intervene to make sure that all their property managers have an excellent quality of service as part of the purchase process.
Since I used Roofstock, I just paid 6% of my monthly rent to my property manager, just FYI.
Honestly, enter something into our real estate analyzer and then reduce the property management from 10% to 6%. And you thought you had a good cash flow before.
If you buy a rental home, you would undoubtedly require a dependable team. The most critical aspect of the operation, though, is assessing the contract.
Is the asking price too much? Do your property taxes eat away your cashflow? How do two properties with comparable prices compare?
These are all problems I had trouble with, and I ended up with a ridiculously complex spreadsheet that took a lot of time and energy to create and manage.
A real estate transaction is constantly changing as new knowledge becomes available, and in order to be stay ahead of the game, you must quickly rerun calculations regularly.
Since all of the current resources are disgracefully awful, I wanted to create my own.
The initial property review is free, and we’ve received a lot of positive reviews on it. It takes in pricing data automatically and makes calculations; it also allows you to store evaluations of Property Groups to monitor properties you own and those you wish to purchase in the future.
Fees: One time 0.50% fee per property purchase
Turnkey: Yes, Roofstock does walk an extra mile for you when it comes to ensuring that you are not troubled with logistics as much as possible.
Fractional Property Shares: Available to accredited investors via Roofstock One which starts at $5,k
Markets: 25 markets including Greater Tampa, Atlanta, Las Vegas, Jacksonville, Miami, Orlando, North Carolina, Riverside – San Bernardino, Southwest Florida, and San Francisco – East Bay.
Roofstock One, a subset of Roofstock, sells shares in single-family rental homes for a minimum of $5k. It provides you with passive income with no maintenance costs and allows you to diversify through homes in different parts of the world.
You may purchase tenth shares of pre-leased and stable properties.
Rather than moving on title, transactions are structured as shares.
You eliminate the complications of a real estate transaction since you are not responsible for managing it. It also makes selling easier when you just need to sell the security rather than the whole estate.
You will, ideally, continue to get the tax incentives, profits, and appreciation as in the case of owning a property as though your name were on the title.
This feature, however, is only available to approved investors.
Roofstock, like many other crowdfunding sites, offers a marketplace where investors can browse and acquire properties with appealing investment profiles and passive income opportunities, and sellers can advertise properties for sale to investors.
Because of the abundance of rented single-family rental houses, it is convenient to buy and own a personalized portfolio of licensed, money-making homes under the 1031 exchange time limits.
Roofstock, which began operations in 2015 and has raised a venture capital worth $133 million, made its first sale in March 2016 and describes itself as a rental property marketplace “built by investors for investors.”
Roofstock provides analytics, research, and insights on each offering, allowing you to compare and buy individually pre-certified assets.
The Roofstock search filter makes it simple to locate certified investment properties filtered by the parameters that are important to you, such as list price, position, neighborhood ranking, gross yield, projected annual appreciation, funding form, and others.
Furthermore, after you’ve registered on the platform, the custom filters you’ve created can be saved so you can easily access the offerings you want to check out.
Roofstock’s marketplace had more than 400 homes listed at the time of this writing, so the option to browse is an important advantage.
If you decide to become partners with Roofstock, you’re in for some pleasant surprises.
Roofstock’s platform has generated over $2 billion in trades since its launch in 2015. In January 2020, Roofstock completed a $50 million Series D equity round, taking the cumulative amount of shares raised to a whopping $133 million.
Direct ownership of rental real estate usually has two opportunities to profit:
The offerings of Roofstock had estimated cap rates that range from 2% to 10.8% at the time of this writing. It’s difficult to say how much money buyers make from market appreciation, but well-chosen rental assets can rise at a comparable pace to inflation, with variation across markets.
Gary Beasley, the CEO and co-founder of Roofstock, boasts of real estate expertise being the co-CEO of Starwood Waypoint Residential Trust and the CFO of ZipRealty. Roofstock co-founder, Gregor Watson, contributes 15 years of real estate expertise as well.
Rich Ford, another co-founder, possesses 20 years of M&A background and is the driving force behind Roofstock’s transaction supply, underwriting models, and analytics.
It is entirely possible to build a profitable, successful online business easier without Roofstock, however.
Our review team has come across a program in the real estate industry that is next level!
Although it’s not real estate in the traditional sense, it’s all digital.
Where Roofstock falls short is in scalability.
You can’t realistically expect to be able to set up a bunch of different Affiliate Marketing blogs and get NATIONAL traffic to them.
It just takes too many resources (money included) for any regular person to bootstrap.
But what if you could make even more money off of little local websites without having to spend tens of thousands to set up an affiliate blog?
With this digital real estate program, you can profit off LOCAL traffic to your website every single day!
Sound too good to be true? Of course it does! But it isn’t…in fact, business owners wish they had this skill!
All you have to do is build and rank a LOCAL website and forward the jobs off to a business owner in town, you could even email it to them!
This works for literally any service based business, tree service, plumbing, towing, etc.
How do you get paid and how much?
Simple, after you forward the jobs off to a business owner and he makes some money off of them, you simply ask to make the deal beneficial for each other.
A fair price to charge per lead, depending on the industry is 10-20%…let’s just use the tree service industry for example and go by worst case scenario.
Let’s say you build and rank the site and only 10 jobs a month come in. The average tree service job is anywhere from $500-$2000!
That means at bare minimum you have an asset worth $500 a month!
See why they call it digital real estate now? That’s a rent payment.
The great thing is how easy it is to scale. You don’t have to worry about spending boatloads of money on a single traffic source to get CRUMBS in affiliate income.
Remember Roofstock talking about their large down payment?
This one actually allows you to collect HUGE FLAT RATE DEALS. Truly passive income!
The training program takes making money online to a whole other level. The owner of the program walks you through how to build and rank a site hand in hand, with the occasional voice over when he is sharing his screen.
You will learn the importance of keywords, website name, how to send call notifications via email, backlinking, etc.
Once the training program is completed you will also have access to a Facebook group much better than the Roofstock community in our opinion. This group is much more active.
Unlike Roofstock, where you’re getting maybe $5 per sale, you could be getting 10-20X THAT.
A business will always want more leads and another job. In fact it doesn’t even matter that the job isn’t coming from their website name…they see it as it is…expanding digital real estate.
Unlike Roofstock, more people have been able to walk away from their 9-5 job as well.
Now, I know you probably have tons of questions… So, check this out to learn more.