Roofstock Review: Should I Invest in Real Estate?

By: Bob Haegele

August 19, 2020

Roofstock is a low-cost investing platform that makes it easy for anyone to start investing in real estate.


With its low fees, excellent customer service, and thorough inspections, it makes a great case for one of the best RE investing platforms around.

Key  Features:

  • Low Fees
  • Great customer service
  • Thorough inspection process
  • Free to sign up

overall 

4.8/5

overall 

4.8/5

Fees

Ease of Use

Customer Service

Minimum Investment

If you’re a first-time investor in real estate, entering the marketplace can seem overwhelming. Therefore, finding the right platform to get started is imperative. That’s why you should check out Roofstock.


This platform offers the convenience of homes with existing tenants and low fees, and there’s no need to be an accredited investor. You just open your account and get started which makes it the ideal way for beginners to embark on their first real estate venture.


Sound good? Read our expert Roofstock review to find if this could be the right option for you.

Roofstock Review – Features At A Glance

Sign Up Costs

$0

Account Fees

0.50%

Time Commitment

0 months

Offering Types

Direct ownership, equity

Accreditation Required

Only for Roofstock One

Property Types

Single-family tenanted properties

Regions Served

Over 70 markets

Pre-Certified

Yes

Guarantees?

30-day satisfaction guarantee

Property Management Service

Yes

What Is Roofstock?

If you are new to this company, you may not know what it’s all about. Roofstock is a company that enables even complete beginners in the real estate market to make an investment.


Focusing on single-family rental properties, Roofstock offers an impressive variety of homes for purchase. You make money by renting those homes to tenants.


Launched back in 2015, Roofstock was funded with $133 million of venture capital. Its first transaction was carried out in 2016.


Roofstock provides analytics, insights, and research for every offering. These tools enable you to easily evaluate then purchase properties that have been independently certified.


This platform has a long and well-established history in the marketplace It was set up to be a rental property marketplace that was “created by investors for investors.”

How Does Roofstock Work?

If you visit the Roofstock platform, you’ll find it has a user-friendly search filter that allows you to easily find properties that are sorted by all the attributes that are important to you.


These include list price, location, neighborhood rating, gross yield, type of funding, estimated annual appreciation and other criteria.

Roofstock Search

Once you’ve registered with the site, it’s possible to save your own custom filters. As a result, it is a breeze to find the right offerings to suit your needs each time you use the platform.


Why Choose Roofstock?


Roofstock stands out from its competitors because it sells homes with existing tenants in them. Its focus is on rental properties where the existing property owner is keen to move on and to sell up to another landlord.


On the Roofstock platform, you can browse available properties, purchase the one that’s right for you, and enjoy a steady income flow from day one.


Essentially, it’s an ideal investment opportunity if you’re seeking a passive source of income with minimal hassle.


A key element of owning rental properties is managing those properties. The landlord must carry out several tasks, including:


  • Screening tenants and placing them
  • Collecting rent
  • Handling maintenance issues
  • Managing turnover of tenants

These are all time-consuming tasks. When properties aren’t managed correctly, your rental property can easily drain your resources. This is where Roofstock can help.

It has a “preferred property managers” service with screened professionals who can manage your rental home on your behalf.


That saves you time and effort if you’d prefer to avoid taking on landlord responsibilities yourself.


Investor Reviews


Real investors have many positive things to say about using the Roofstock platform:

Roofstock enables me to market specifically to people that would be potential buyers – and not only nationally, but internationally.

Nate P // Financial

Great option for sellers looking to get rid of their rental property with tenants in place and/or not wanting to leave it empty while selling. Roofstock also minimized the high cost of selling without the need for high commission costs.

N Fiorito and S Fiorito

The most attractive feature to me is that I’m selling an occupied property. During the listing process, I keep getting rent. With a fix and flip, I have to eat up all the interest, utilities, and staging costs.

Billy Tran // Fix & Flipper

Can I Trust Roofstock?


Of course, you want to be certain that when you invest you’re choosing a reliable platform that you can trust.


Roofstock’s comprehensive certification system ensures that all of the homes available for sale on their platform are all up to a high standard before being considered.


Properties have to be professionally inspected with all repair costs estimated and an accurate valuation obtained. Photographs, floor plans, and title reports must also be in place for the investor’s peace of mind.

Roofstock Inspection Details

Roofstock even refuses property listings when it believes asking prices are too high.


Having facilitated over $2 billion worth of transactions since 2015, Roofstock is managed by a co-founder and CEO with extensive experience in the real estate sector. Gary Beasley was co-CEO for Starwood Waypoint Residential Trust and CFO of ZipRealty.


His co-founder, Gregor Watson, worked in the real estate market for 15 years before forming this partnership to create Roofstock.


Another co-founder, Rich Ford, has two decades of M&A experience, so you can be confident he has the in-depth knowledge to lay the groundwork for the platform’s deal analytics, supply, and underwriting models.


All of this adds up to a reputable and trustworthy real estate platform.


Who Can Buy Properties From Roofstock?


There’s no need to be an accredited investor if you want to purchase one of Roofstock’s rental properties unless you wish to invest in Roofstock One. Of course, you’ll need to have sufficient capital to pay for the property outright unless you’re obtaining a loan.


Lenders usually demand that investors make a down payment of around a fifth of the purchase price.


You’ll also have to pay the closing costs of around 4-5% of the property price. In practical terms, this means that you’ll have a minimum investment of about $20,000 on a property worth $80,000.


When it comes to Roofstock One, you are making an investment worth a minimum of a tenth of the property’s value, so for a property worth $80,000, you’ll need to pay $5,000.


What Kind Of Returns Can I Expect On A Roofstock Investment?

 

Most properties available for purchase on the Roofstock platform project cap rates of between 5-8% and gross returns of between 11-12% before expenses.


Each offering shows its projected application, a neighborhood score, and details about historical neighborhood trends as well as projected ones.

Roofstock Property Detail

How Do I Sell A Roofstock Investment?

Once the sale has closed, you own the property outright. Rental properties are long-term investments, but if you decide to sell at any time, you can relist it on Roofstock. In doing so, you make the change from an investor to a seller.


Does Roofstock Have A Mobile App?

 

Unfortunately, there’s no Roofstock app at the present time. However, the website is mobile-friendly.


You can access the same functions from your smartphone as on your desktop or laptop. You’ll be able to make offers, close transactions, and move transactions forward on any device.


How Much Does Roofstock Charge In Fees?


Another attractive feature of Roofstock is that the fees are lower than those you’d typically be asked to pay by a traditional real estate agent. Standard fees come in at about 6%, while Roofstock halves those fees, or even goes lower.


Typically, you’ll pay a marketing fee of 2.5% to Roofstock. This makes it a cost-effective option. Even better, signing up won’t cost you a cent, and just for extra protection, there’s a 30-day satisfaction guarantee.

What Is Roofstock One?

Roofstock has another investing option available for accredited investors. Roofstock One allows you to buy shares representing one-tenth of a fully-managed rental home’s equity.


You pay a fee for asset management and receive all of the home’s economic rights, including tax benefits, net rental income, and appreciation. You get all this without the responsibility of having to act as a landlord.


When 6 months of ownership have elapsed, investors are offered liquidity options including share redemption or conversion to traditional property ownership.

Roofstock Pros & Cons

Pros:

  • Thorough home inspection
  • Property managers available if you need one
  • Low fees at 2.5%
  • Properties available in more than 70 markets

Cons:

  • Large down payments
  • Number of deals can be overwhelming
  • Properties can't always been seen before buying
  • Property owners pay for repairs

Summary

Roofstock uses cutting-edge technology to offer a user-friendly platform that simplifies the complex process of purchasing real estate. It gives even beginner investors convenient access to local deals they may never see otherwise.

 

Roofstock is a great choice for anyone looking for a simple way to dip their toes in the water of real estate investment.

It allows investors to seek, research, and purchase already tenanted single-family rental properties from anywhere efficiently and transparently.

 

Hopefully, this expert Roofstock review will give you the details you need to determine whether or not this is the right platform for you.

About the Author:

Bob Haegele is a personal finance writer, blogger, and dog walker. He enjoys growing his wealth through investing and helping others do the same.

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