If you've been considering buying real estate outside of your local area, diversifying your investment portfolio, or trying turnkey investing, then check out one of the newest real estate investing marketplaces called Roofstock.
In the following video, attorney, investor & broker Vitaliy Volpov of Succeed REI, discusses some of the unique features and advantages that you can find on Roofstock.com that will help you make a better informed decision on whether or not this platform is right for you.
Introduction
Roofstock is a FinTech company which specializes in connecting buyers and sellers of single and small multifamily rental properties across the country.
Not only can you buy individual rental properties on Roofstock's marketplace, but you can also browse and purchase entire rental portfolios. And in the very near future, accredited investors will also be able to buy shares of individual properties on Roofstock's website.
Roofstock offers extensive analytics and connects buyers to mortgage lenders and local property managers to make the entire process of remotely buying and owning rental properties extremely convenient.
Background
So by way of some background, Roofstock was founded in May of 2015 by three veteran real estate investors and entrepreneurs. The company launched its online marketplace in March of 2016 and completed its first transaction in the same month.
By December 2017, the company surpassed $1 billion in transactions and by December 2019 it crossed $2 billion in sales. Its growth has continued at an exponential rate ever since. Earlier this year, the company surpassed $3 billion in transactions and it continues to break its own records.
During the course of the last three years, the company also acquired several other FinTech companies in the real estate space, including StreetLane Homes, Stessa.com, and most recently, the property management giant Great Jones.
The company has a good rating from the Better Business Bureau, employs over 200 staff, and has raised approximately $133 million dollars in venture capital since its formation. Roofstock.com currently has listings in over 70 markets spanning 27 different states, and according to its marketing, continues to strategically expand into new markets as it grows.
Services
Rootstock's mission is to make ownership of investment real estate radically accessible, cost effective, and simple.
So how does it actually do that? Well, at its core, right now the company offers three different services. One, it allows buyers to purchase rental properties from its growing marketplace. Two, it allows sellers to offer their rental properties for sale. Three, it offers a property management solution for investors looking to own real estate 100% hands-off.
Marketplace
As of the date of this recording, Roofstock has 847 listings on its marketplace. These are primarily single family rental properties, which is Rootstock's main focus and specialty. However, 73 of those properties are multifamily properties, which include duplexes, triplexes, and quads.
You can browse through all available properties all at once, or you can filter them by a variety of different methods. You can search by property types, by property attributes, by neighborhood or school ratings, by location, or by any number of more advanced and granular search criteria. Once you click on a property, you will find a variety of information about that property, including a summary page, financials, and analytics provided by Roofstock.
Listings
Above the asking price, you will see a label which tells you whether the property is an Exclusive or Select Listing. A Select Listing means that the property is advertised in the public source, such as a local MLS, in addition to being offered for sale on Roofstock.
However, an Exclusive Label means that you can only find this property on Roofstock's marketplace. There are actually quite a few exclusive listings on Roofstock, which is pretty cool considering how competitive the general real estate market is right now. Since they are only offered for sale on Roofstock, there's less competition and you may have a better chance of finding a better deal than you otherwise would on the MLS.
The other notable feature on Roofstock.com is that some properties come with an Inspection Contingency while others are labeled Roofstock Certified.
An Inspection Contingency label means that an inspection has yet to be conducted on the property, and even after you and the seller come to terms on a price, you will have the ability to renegotiate the price or potentially cancel the contract if the inspection finds items that require repairs.
While you won't have that option with property Certified by Roofstock, the properties that carry the Certified label come with extensive inspection documents which contain numerous photos and a detailed overview of every component of the property. Additionally, certified properties also come with cost estimates of needed repairs, invoices for work completed by the seller since the last inspection, tenant ledgers with rental histories going back several years, lease abstracts, and even title reports. The amount of information you have available to you on certified properties is significant, and it gives you a pretty good idea of what the property is all about.
Roofstock also utilizes a five star rating system for the schools and neighborhoods where the properties are located. For its neighborhood ratings, the website takes into consideration a variety of factors such as median home values, median income, employment statistics, and percentage of owner occupied properties.
Of course, nothing's a substitute for eyes on the ground and your own due diligence and research. Because Roofstock provides you with the full address of each property, you can do your own analysis of the property and the area where it is located before making an offer.
Buying a Property
In terms of the actual buying process, Roofstock makes it extremely simple. Once you decide that you want to make an offer on a particular property, you simply type in an amount that you are comfortable paying and it gets sent to the seller. The seller can reject your offer, provide a counter offer, or accept your offer. Once an offer is accepted, Roofstock helps you handle the entire purchasing process.
The first thing that has to happen is you have to pay a Roofstock Marketplace Fee, which is described in the investment terms for each property. It is usually half a percent of the purchase price, or $500, whichever is greater. The Marketplace Fee is refundable if there's a contingency and you exercise it prior to its termination, or if the seller fails to fulfill the seller's obligations under the purchase and sale agreement. This is a fee that is paid to Roofstock and is one of the ways roofstock makes money on the transaction.
Once the marketplace fee is paid, the property is removed from the marketplace so that it cannot be purchased by another buyer and both you and the seller receive a copy of the purchase and sale agreement for your electronic signatures.
Then within three days of signing the purchase and sale agreement, you will be asked to wire an earnest money deposit to the title company that will be handling the transaction. There are several other steps involved in the process including inspection and appraisal contingencies, as well as financing if you're not paying for a property entirely with your own funds. Roofstock has several lenders you can turn to for financing. Additionally, Roofstock has several featured and preferred property management companies, including its own affiliate, Great Jones.
According to the materials on the Roofstock website, the target closing date is 30 days from the execution of the purchase and sale agreement. Additionally, according to Roofstock third party providers which Roofstock recommends, all have agreed to provide their services at discounted rates as compared to what you can get in the market.
Again, you don't have to use any of Roofstock's recommended lenders, property managers, or other service providers in order to complete a transaction; you can always use your own. But the idea and the benefit here is that doing so significantly simplifies and reduces the cost of the real estate transaction, which in turn allows for a stress free investing process. This is important especially if you're new to investing and intend to invest long distance.
Selling a Property
On the flip side, if you have a property to sell you can submit information on it through Roofstock's sale page. You will be asked to provide various information including things like property taxes, insurance, rental amount, lease terms, and more, and will be asked to provide photos of your property.
Roofstock, with your consent, may also send a third-party inspector to conduct an independent inspection of the property. If your property passes Roofstock's inspection process, it may be listed as a certified property, which as I already alluded to, may be more desirable to potential buyers.
One of the big advantages to potential sellers of single family properties is that using Roofstock's listing process, they do not need to ask their existing tenants to vacate the property as most buyers using the website are looking for fully occupied and cash flowing rentals. Additionally, Roofstock's 3% fee to sellers is less than the typical 6% brokerage commissions which sellers typically have to pay when they sell a property with a traditional broker.
Ideal User
Generally the people who will benefit from what Roofstock has to offer are those individuals who have some money to invest, who may be busy professionals who do not necessarily have the time and the energy to invest in managing their own properties, but who nevertheless want to get into real estate investing space.
Additionally, individuals who live in very expensive coastal markets where they are priced out of investment opportunities in their immediate area may want to consider some of the less expensive properties that are offered through Roofstock.
Since Roofstock covers all the bases with their easy to access process for buying and selling real estate, as well as local property management, this presents an attractive opportunity for investors looking to invest long distance.
Given I am affiliated with Roofstock, definitely be sure to do your own research into whether buying or selling real estate through the Roofstock platform makes sense for you.
Call To Action
If you want to check out Roofstock for yourself and give their platform a test drive so-to-speak, you can set up a Free Account by using the link below. Setting up an account allows you to set alerts and notifications for properties that meet your search criteria and allows you to save properties that you come across that you like.
Video transcribed by https://otter.ai
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