Roofstock is an online marketplace that connects investors with single-family rental properties available for purchase. The occupied properties are vetted according to strict criteria, removing the work involved in finding, buying and managing a rental property yourself. However, it requires a lot of capital and you may find a wider selection working with a broker.
Roofstock offers a 30-day money back guarantee. Plus, if you purchase a vacant home, Roofstock will pay rent equal to 75% of market value for up to 12 months. Terms and conditions apply
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What is Roofstock?
Roofstock is an online marketplace that sells single-family residential properties to investors. But this platform is more than a real estate marketplace. And that’s because the properties for sale on Roofstock are already occupied by paying rental tenants.
Investors looking to generate passive income by owning a rental property will find a selection of available single-family homes on Roofstock’s marketplace. Investors make offers on properties through Roofstock and if the offer is accepted, a 0.5% contract fee applies. Roofstock’s transaction team helps guide investors through the closing process and local property managers are on hand to help investors maintain the property once purchased.
How does Roofstock work?
Here’s how Roofstock works:
Profile. Create an investor profile or speak with an adviser to develop a strategy.
Search. Browse through a selection of pre-screened, exclusive listings or set up custom filters to browse properties that meet your standards.
Analyze. View details, pictures, lease and tenant information and use calculators and other tools to determine if a property is right for you.
Buy. You can negotiate or make an offer for free. You’ll only pay the contract fee when your offer is accepted and collect 2.5% from the seller as a commission.
Close. Roofstock’s transaction team will walk you through closing, lending, escrow, insurance and property management. Closing generally takes 15 days if you pay cash or 30 if you’re financing.
Earn. Whether you use your own property manager or one of Roofstock’s, you’ll start collecting rental income as soon as you close, while your property manager handles day-to-day operations.
What is Roofstock One?
Roofstock One is a separate platform where users can invest in shares of rental houses. It has much lower capital requirements and allows investors to earn passive income without the responsibilities of ownership. But it’s only available to accredited investors.
Who is Roofstock best for?
Just like any other real estate investment, Roofstock requires a substantial amount of upfront capital, making it best for:
Experienced investors. This service is a better fit for experienced investors who want to diversify their portfolio.
Long-term investors. Real estate is an illiquid investment that’s best suited for investors who want to earn passive income over the course of many years.
Hands-on investors. Unlike stocks, bonds and other investments, rental properties require work, even if you have a property manager. Roofstock is best for investors who have the time and money to maintain rental properties.
What are the benefits of Roofstock?
You don’t have to be an accredited investor to take advantage of Roofstock’s perks:
Screening process. Roofstock properties are thoroughly screened and listings are equipped with 3D tours, inspection reports, financial analysis and more.
Low fees. Once your offer is accepted, you’ll only pay a 0.5% marketplace fee of the contract price or $500, whichever is higher.
Hassle-free. Most properties are already occupied by paying tenants, so there’s no legal work and you can insure and finance your home directly through the website.
Guarantees. Roofstock offers a 30-day money back guarantee if you’re not satisfied with your purchase as long as it meets its terms and conditions. Plus, if you purchase a vacant home, Roofstock guarantees you will secure a signed lease on the property within 45 days, or it will pay rent equal to 75% of the estimated market rent rate for up to 12 months.
What to watch out for
Despite its strengths, there are a few things you should consider before opening an account with Roofstock:
Large upfront capital. On Roofstock, you’re not buying into a fund that pools the cash of multiple investors — you’re purchasing a house. The average price of a Roofstock property is $140,000 and with most lenders requiring a 20% downpayment, that places the average minimum investment on Roofstock at $28,000.
Few markets. Roofstock only has properties in 25 states — some states have markets in multiple cities and others may only have a market in one.
Lengthy onboarding for sellers. Sellers go through a longer onboarding and verification process to ensure their property is a good fit.
Online only. While Roofstock has accessible customer service and one physical office, you can’t visit a traditional broker or agent to do business in person.
Guarantee conditions. You’ll need to meet the following requirements to take advantage of the money-back and rent guarantees:
Money back: To relist your property you must meet Roofstock certification standards and you’ll need to maintain the property until it sells.
Rent: You must work with an eligible preferred property manager and payments will begin 45 days after your property is rent-ready.
Limited selection. Since listings are exclusive to Roofstock, there’s a smaller selection than you’d find when working with a broker/agent or MLS.
Compare with other real estate investing platforms
If you’re interested in investing in real estate, explore your platforms below.
What information is included in Roofstock listings?
Roofstock’s listings offer plenty of information to help you make an informed decision:
Property summary. Explore the list price, lot size, location, occupancy status, lease start and end date and more.
Financials. Run the numbers on projected cash flow, equity, interest rates, closing costs and net cash flow over time.
Analysis. Assess the property’s overall value, rental value, inspection highlights, neighborhood rating and more.
Diligence documents. Review inspection, title and property valuation reports.
Buy process. Explore your financing and property management options with Roofstock’s partners.
Similar listings. Compare similar listings available on Roofstock’s marketplace.
How do I sign up?
Get started online in four simple steps:
Visit Roofstock’s website and click Sign up.
Fill out your personal information and click Sign up or sign up with Google or Facebook.
Build your investor profile or Skip to build it later.
Review your profile and then scroll down and click View All Properties to start your search.
During your application, you’ll need to provide the following information:
First and last name
Phone number and email
Investment and financial information
Roofstock reviews and complaints
As of October 2020, Roofstock has its own Better Business Bureau (BBB) page but the BBB doesn’t have enough information on the platform to give it a rating. In fact, investor feedback on the platform is quite scarce. It has no reviews on Trustpilot and no complaints with the Consumer Financial Protection Bureau.
The only place we were able to unearth some feedback was on Reddit. Redditors report that Roofstock’s platform is easy to use and that the process of purchasing was smooth and simple thanks to ongoing guidance throughout the process.
How do I contact Roofstock customer service?
There are three ways to get in touch with customer service:
Live chat: Use the feature on the website to schedule an appointment.
Phone: Call 800-466-4116.
I’m ready to start using Roofstock. Now what?
Now that you’ve signed up, here’s how you can get the most out of the platform:
Set up your profile. Fill out your investor profile to create an investment strategy that aligns with your financial situation and goals.
Investor checklist. Go through the investor checklist to ensure you’re ready to start investing.
Set up filters and alerts. Create filters and watch lists to find ideal properties.
Speak with a Roofstock adviser. Set up a phone call or live chat to discuss your investment strategy or ask questions.
Start investing. Make an offer or buy a property.
Roofstock property manager. While you’re free to manage properties yourself or hire a third party, Roofstock has certified property managers that can take care of everything.
Roofstock connects buyers and sellers of rental properties to make real estate investing more transparent. Properties go through a strict screening process and most are already occupied by reliable tenants so that you can start generating income sooner. But investors will need to be prepared with a large chunk of upfront capital to purchase the property.
No. Anyone can use Roofstock, whether you’re a US citizen or a foreign investor.
No. You’ll have the option to pay in cash, but if you decide to finance your purchase, you can go through Roofstock or use your own lender.
Roofstock uses your credit card to verify that you’re serious about making an offer. Plus, properties remain on the market until the marketplace fee is paid, so having a credit card on file will ensure the property is yours as soon as the offer is accepted.
Roofstock operates in Alabama, Arizona, Arkansas, California, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas and Wisconsin.
It’s up to the seller. Roofstock is designed to eliminate the need to tour properties in person. Most Roofstock investors don’t live near the properties they invest in — they purchase and manage it from a distance. If the seller allows it, you may be able to tour a property in person.
The program excludes homes with two or more units, commercial properties and portfolios. Only single-family homes qualify.
Peter Carleton is a writer that covers banking and investing, breaking down what you need to know about where you put your money. When Peter's not thinking about cutting-edge banking apps and robo-advisors, he runs a creative agency and spends his spare time cooking or reading.
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