Roofstock offers single-family residential properties occupied by tenants to accredited and nonaccredited investors alike. The catch? You’ll need to have a down payment ready and there’s not much liquidity to be had once you become a homeowner. If you’re on the fence about Roofstock, here are four Roofstock competitors to consider.
What’s an accredited investor?
To be an accredited investor, you must meet one of the following criteria set by the US Securities and Exchange Commission (SEC):
You earned over $200,000 in each of the last two years and expect the same for this year.
You and your spouse earned over $300,000 in each of the last two years and expect the same for this year.
You have a net worth of at least $1 million, alone or together with your spouse, excluding the value of your primary residence.
You'll need to be an accredited investor to sign up, but you'll gain access to commercial real estate, funds and portfolio management services. For the accredited investor looking to diversify into real estate, CrowdStreet has plenty to offer. Individual investment property and fund minimums start at $25,000 and portfolio management services require a portfolio of at least $250,000.
Yieldstreet's platform offers investors the opportunity to invest in real estate and a variety of alternative asset classes. Investors can browse the Yieldstreet marketplace for individual offerings or invest in the Yieldstreet Prism Fund, a four-year fund that contains a diversified basket of investment classes. The fund is open to all investors; other offerings are limited to accredited investors.
This private investing platform's individual commercial real estate deals are thoroughly vetted and accompanied by robust documentation. RealCrowd is a private investing platform that offers investors access to an online marketplace populated with commercial real estate deals. Plus, it's one of the few real estate platform's that doesn't charge a management fee. The catch? Only accredited investors are eligible to invest.
It's low $5,000 investment minimum makes Cardone Capital more approachable than its competitors, but investors must be ready to lock in funds for 10 years at a time. Most multifamily investment opportunities are limited to accredited investors. Cardone Capital sets itself apart by opening up its marketplace to nonaccredited investors. Plus, its $5,000 minimum investment is less demanding than the $25,000 minimum imposed by its competitors.
This well-vetted real estate network only offers one real estate deal at a time. So long as you're ready to lock in a minimum investment of $25,000 for up to four years, ArborCrowd may be worth considering. You'll need to be an accredited investor and only one deal is up for grabs at a time, but the screening process is extensive and ArborCrowd invests in every deal it offers.
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Pros and cons of Roofstock
Roofstock has plenty to offer investors interested in real estate but isn’t without its drawbacks.
Pros
Open to non-accredited investors. As long as you’ve got the upfront capital, Roofstock is happy to welcome non-accredited investors to its platform — a perk that separates it from many of its competitors.
Vetting process. Roofstock carefully vets and screens its listings before they go live on its marketplace, offering 3D tours, inspection reports, financial analysis and more.
Competitive fees. If your offer is accepted, you’ll pay a marketplace fee of 0.5% of the contract price or $500 — whichever is higher.
30-day money-back guarantee. Rockstock offers a money-back guarantee if you find yourself dissatisfied with your investment property and it meets its terms and conditions.
Cons
Sizable investment minimums. Since you’re purchasing property through Roofstock, it connects investors with residential property occupied by tenants — but you’ll need a 20% down payment to invest. The average price of a Roofstock property is $140,000, which means you’re looking at a $28,000 down payment requirement.
Limited market. Roofstock only offers properties across 28 states.
Online only. Since Roofstock operates as an online marketplace, you’ll need to rely entirely on the listing information to make a decision about whether to invest in a property.
How to transfer your investment account
Roofstock investors are property owners. This means that if you decide to sell your Roofstock property, you’ll need to navigate the real estate process of putting your property up for sale. This may include hiring a local real estate agent, running a comparative market analysis, hiring a home inspector and more.
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Shannon Terrell is a lead writer and spokesperson at NerdWallet and a former editor at Finder, specializing in personal finance. Her writing and analysis on investing and banking has been featured in Bloomberg, Global News, Yahoo Finance, GoBankingRates and Black Enterprise. She holds a bachelor’s degree in communications and English literature from the University of Toronto Mississauga. See full bio
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