New investors may find real estate investment scary since you have to look for the perfect property, secure financing, buy the property, and then locate tenants. Many things may go wrong, including buying a house with structural problems and having trouble locating the right renters.
Many people lack the time or risk tolerance to devote to real estate investing since it requires labor and might be dangerous.
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| Review of Roofstock: Simple Real Estate Investing |
About Roofstock
The finest real estate investing marketplace in the world is something that Roofstock is constructing. Gregor Watson, Gary Beasley, and Rich Ford, all of whom have extensive real estate backgrounds, started the business in 2015.
The main feature of Roofstock is a marketplace where you can purchase and sell single-family houses. Everyone has access to the marketplace and may search and view properties for free.
Real estate investors may access crucial information in one location thanks to the Roofstock Marketplace, which facilitates making well-informed decisions. The firm proudly declares that it aims to make real estate investment simple and accessible.
In more than 70 real estate markets, Roofstock has transacted over $5 billion worth of real estate.
What Services Offers Roofstock?
Roofstock provides three major plans, with each one being different depending on how much money you want to spend and how much real estate investment expertise you have.
Roofstock Marketplace
Roofstock is an online marketplace where investors may purchase and sell portfolios of houses, and it strictly screens all of its listings.
Your desired parameters, including location, neighborhood rating, listing price, and more, will determine how properties are shown in this marketplace. Here you may also locate investment homes that are rented out. It's also important to note that you can sell your house using the marketplace and only pay a final 3% sale fee.
Later in this review, we go into more detail about using the Roofstock Marketplace.
Roofstock One
For authorized investors who don't want to buy the whole property, there is Roofstock One. Users can purchase a 1/10th part of some of the properties on the marketplace for a minimum investment of $5,000. If you don't want to be responsible for paying the full property loan by yourself, Roofstock One is the best option.
Two investing choices are offered by Roofstock One:
Stock tracking: Offers exposure to several assets and markets.
Common stock: Provides a comprehensive view of every residence in the Roofstock One REIT.
You won't have to worry about putting your name on a mortgage, and both alternatives will help you avoid the pitfalls of property ownership. Unlike conventional REIT investments, Roofstock One gives investors the freedom to customize their portfolio strategy.
It's important to note that there is no secondary market for Roofstock One shares, making these investments extremely illiquid. You must have patience because it requires an investment horizon of at least five years.
Roofstock Institutional Services
For investors wishing to grow their portfolios and who have greater cash, Roofstock Institutional Services provides a complete solution. They provide these services, which have the following advantages, to big investors and institutions:
- The market study, underwriting, and rehab management are all included in the acquisition process.
- Transaction management: You may obtain information about the local market, provide management, and carry out transaction services.
- Marketing, tenant relations, repairs, maintenance, and construction management are all included in property management.
- You receive reporting, accounting, supervision, and suggestions with portfolio management.
- Disposition: This includes portfolio disposition, a multi-channel exit strategy, and strategy recommendation.
Let's examine some additional noteworthy services that Roofstock provides to its users in more detail:
Retirement Accounts
With Roofstock's collaboration with New Direction Trust Company, you may make real estate investments through your retirement account. You may include your properties into a self-directed IRA with Roofstock. Once completed, the IRA takes ownership of your title report, allowing you to avoid paying taxes on your rental property's revenue.
Roofstock Academy
Roofstock just released a course that covers all the essentials of real estate investment. The initiative aims to provide all real estate investors with a single point of contact. Access to coaching groups, private coaching, and a private Slack group is available.
According to Roofstock, academy members have finalized real estate deals worth $45 million both on and off the Roofstock platform. Although there is a money-back guarantee, enrollment is at capacity.
Although there isn't a free academy level, anyone may read the Roofstock blog for nothing. From inflation to REITs, the blog discusses a variety of subjects.
Shop with an Agent
A carefully selected network of agents at Roofstock completed more than $50 million in real estate deals in 2021. With the new Shop with an Agent function, you can get in touch with a licensed agent who can advise you on which property to buy and how to submit a competitive bid.
If you're new to real estate investment and want someone to walk you through the procedure, you should think about using this tool.
How Does Roofstock Work?
Roofstock makes the procedure for beginning real estate investing simple. Without creating an account, you may view properties on the Roofstock Marketplace. To view the available residences, only select the "Properties" tab. You may then narrow your search results by
- Newly Listed
- Neighborhood rating
- Best schools
- Multiple units
- Pre-inspection
- Higher yield
To make an educated offer, you may acquire comprehensive information about an investment by clicking on a specific property.
How many Roofstock services you utilize is also up to you. You can use Roofstock to find tenant-occupied investment properties on the other side of the country, or you can use it for financing and property management. With so many services available, using Roofstock can be advantageous for most investors.
Roofstock Pricing
Registration with Roofstock is free, and using the Roofstock Marketplace to look at properties is also free. As stated in this post, you will pay 0.50% of the contract price or $500, whichever is more, if you close on a home. Roofstock charges a listing fee for each property sold that is equal to 3% of the sales price or $2500, whichever is higher. Before you put your house on the market, don't forget to get an appropriate value.
When they invest through Roofstock One, accredited investors will pay asset management fees of approximately 0.50% (and up).
Introduction to the Roofstock Marketplace
For buyers and sellers of real estate, Roofstock provides a variety of possibilities. Create your free account and start your search if you're prepared to invest with Roofstock.
1- Inquire about your property
You may discover a property using custom filters that take into account factors like cost, estimated return, location, and more. Even better, you may register for notifications when a home that meets your criteria hits the market. Roofstock's marketplace has thousands of properties listed, so there should be something for everyone.
2- Analyze the property
Roofstock offers sufficient in-depth details about the property to address the majority of your inquiries. The following are shared by the platform:
- Floor plans and pictures: You can also get a 3D tour and curb view.
- Property inspection and valuation: This includes the title report and an insurance quote so that you know exactly what you’re signing up for.
- Tools for figuring out the numbers: You can see how much of an initial investment you have to make, along with the total return.
- Current lease and tenant information: You know what kind of tenants you inherit.
- School and neighborhood ratings: You can get an accurate picture of the community you’re investing in.
- Local options for property management services: You can use one of Roofstock’s property managers to handle everything and be a hands-off investor.
3- Make an offer
On Roofstock, you are not charged a commission until your offer is approved and you are free to submit an offer. The marketplace charge is equal to the greater of 0.5% of the contract price or $500.
You can get a first-hand look at properties on Roofstock through its Open House feature. You have the first 24 hours to review and submit an offer.
4- Close the building
The Roofstcok service and transaction team will work with you during escrow and until the property is fully yours. You will be the legal owner of the rented property after this process is complete.
Looking for a low-cost way to get started in real estate investing? Participate in a crowdsourced real estate investing platform.
Roofstock Advantages
Many rivals have emerged in the internet real estate investment industry over the years. Investors have more alternatives than ever before, making selecting one platform over another tricky. Here are some advantages of using Roofstock over competitors in the real estate industry.
Free to start
On the Roofstock Marketplace, you may view homes for free, including the entire inspection report and analysis of suitable properties. Users may view all of the report's contents, from the current lease to the full financials (like the down payment and the expected annual return).
It takes the stress out of finding tenants
Landlording may be demanding. You don't have to worry about finding renters since Roofstock helps you identify homes that are inhabited by tenants. With tenant-occupied homes, you take over the prior landlord's lease agreement, so you don't have to bother about tenant screening or background checks.
For single-family rentals run by property managers that have partnerships with Roofstock, the firm also provides Vacancy Protection. According to this guarantee, the firm will pay 75% of the market rental rate for up to six months or until a new renter is found if you are unable to find a tenant within 45 days.
Offer thorough analyses and reports
Property investment entails a great deal of uncertainty. If the housing market is hot enough, you must either invest the money on a thorough property examination or buy the house as-is.
You won't need to travel far to see the property because Roofstock provides thorough reports on the condition of the house so you know what you're getting into.
improved rental property financing
Researching financing possibilities is made simple for investors by Roofstock. By supplying certain details, such as your credit score, your target property's price, the loan conditions, and the percentage of your down payment, you may receive a list of quotations from various third-party lenders.
Roofstock Alternatives
Currently, Roofstock is distinctive in that it enables non-accredited investors to purchase and sell tenant-occupied residential real estate assets at a fraction of the price of doing so through conventional channels. The Roofstock real estate marketplace has a large number of houses available.
However, only accredited investors can purchase into portfolios of single-family homes through Roofstock One. If you're looking for an investment option with a REIT-style structure, Fundraise and RealtyMogul are two Roofstock alternatives to take into account.
Fundrise
With Fundrise, you may invest as little as $10 in portfolios of residential and commercial real estate. Fundraise investments are privately held, in contrast, to publicly listed REITs. They are less liquid than conventional REITs, despite the fact that they are not subject to normal market volatility. For the asset class, Fundrise's yearly fee of 1% of your total portfolio value is affordable. Read our Fundrise review to find out more.
RealtyMogul
RealtyMogul, situated in Los Angeles, allows non-accredited investors with a $5,000 minimum investment to access a REIT portfolio. You can invest in either the RealtyMogul Income REIT or the RealtyMogul Apartment Growth REIT at the time of this writing. Additionally, accredited investors are welcome to participate in private placements through RealtyMogul. At 1 to 1.25%, RealtyMogul's costs are comparable to Fundrise's. Check out our RealtyMogul review for additional details.
| Roofstock vs Fundrise vs RealtyMogul | |||
|---|---|---|---|
 |  |  |
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| What We Like | Buy and sell single-family rental properties on Roofstock Marketplace | Non-accredited investors can invest in REITs starting at $10 | Private placements for accredited investors |
| Available Investments | Individual residential properties REITs of residential properties (accredited investors only) | REITs with a mix of residential and commercial properties | Commercial property REITs Individual commercial properties No single-family properties |
| Investment Minimum | $5000 | $10 | $5000 |
| Pricing | Roofstock Marketplace: 0.50% - 3.0% | 1% | 1% to 1.25% |
What Are Roofstock's Benefits and Drawbacks?
Pros
- Roofstock does all of your research, saving you time.
- Investment buildings frequently have occupants already
- Comparable transaction costs
- Non-accredited investors can access the Roofstock Marketplace.
Cons
- Limited to accredited investors is the REIT option (Roofstock One)
- Illiquidity in investments. Purchasing a home will delay the use of your money.
- As more individuals utilize the Roofstock Marketplace, it may get competitive.
Do I Fit for Roofstock?
For those new to real estate investors who want a simple way to start purchasing or selling individual properties, the Roofstock Marketplace is excellent. Roofstock is reasonably priced, simple to use, and provides you with all the pertinent real estate data.
On the other hand, Fundrise or RealtyMogul will be more appropriate than Roofstock One, which is only available to accredited investors, if you're interested in real estate crowdfunding options as a non-accredited investor.
Real estate investing can be intimidating, especially if you're doing it remotely. Utilizing a reputable platform that performs the vetting for you is beneficial.
