The Gateway to Real Estate Investing for Millennials
Investing in real
estate is a great way to diversify your portfolio. Whether you have
extra money to invest after investing in stocks and bonds or want
something not related to the stock market, Roofstock is a great
place to start.
Roofstock is a
marketplace for real estate investors. It works differently than
most real estate platforms and helps beginner and experienced real
estate investors realize profits from investing in real
Real estate is a
great way to diversify taxable and tax-deferred portfolios. Whether
you're trying to grow your self-directed IRA or you want real
estate to be a part of your taxable portfolio for your short-term
goals, Roofstock may help you achieve your goals.
In this Roofstock
review, we cover everything you need to know about Roofstock and
how it works.
Roofstock is a real
estate marketplace that lists homes already outfitted with tenants,
ready for investors to buy. With renters in the house, investors
earn cash flow right away. You don't have to worry about fixing the
property up and finding tenants - they are already there. Roofstock
does the legwork for you. All you have to do is choose a property
and buy it.
only single-family properties that are already certified, meaning
they will only sell legit properties ready for tenants right out of
the gate. Roofstock does the research and ensures properties are a
reasonable risk, which is half the battle in finding the right
own the properties - individual sellers do. Still, Roofstock works
as the intermediary between you and the seller, handling all
administrative work from start to finish, all for a low commission
Once you own the
property, it's your responsibility to maintain it, manage the
tenants, and ensure profitability.
review helps you understand if Roofstock is legit, the platform's
pros and cons, and how much it costs buyers and sellers.
Roofstock has had
more than $2 billion in sales, and its properties have between a 6%
- 10% cap rate. Roofstock took advantage of technology, making
buying investment properties a seamless process for
Roofstock makes the
search and research part of buying investment properties much more
streamlined. Investors go to the marketplace, put in their search
parameters, and see the homes available to them.
There's very little
legwork involved for investors but plenty of profits.
Roofstock is safe.
They even offer a 30-day money-back guarantee, which is nearly
unheard of in the real estate industry. There's no guarantee you
will get your money back, of course, but it's nice knowing the
If Roofstock were
to go out of business, you would be unaffected if you already own
the homes you bought through them.
It's similar to use
a real estate agent to buy a home. Once you own the property, the
real estate agent doesn't have anything to do with it.
There a Roofstock App?
Roofstock doesn't have an app. Their website, however, is
mobile-optimized, so you can get the information you need while
How Does Roofstock
Roofstock is a
crowdfunding platform, but it doesn't work like the traditional
crowdfunding platform. A typical crowdfunding platform pools
investors' money to help real estate developers and investors buy
With Roofstock, you
buy the properties yourself, realizing 100% of the profit - you
don't have to share them with other investors.
The properties you
Roofstock Marketplace are similar to turnkey
properties because they come with tenants already. Investors don't
have to do the legwork typically involved in finding properties and
tenants - the work is done for you. The properties are even
certified, which means they meet Roofstock standards and should
provide a decent return on your investment.
Investors can also
sell properties on Roofstock. The process is simple. You submit
your listing after answering questions about the property and
uploading pictures. Roofstock performs its due diligence by
inspecting the property, pulling title reports, and doing other
research to ensure the property is ready to sell to
professionals work with you to determine the right asking price.
While the final listing price is in your control, Roofstock will
help you determine an attractive price based on market data and the
Once listed, buyers
contact you via the Roofstock platform. You manage your offers on
the platform, and once you accept them, Roofstock handles the
It takes 30 days
from contract signing to closing in most cases.
Who Should and
Shouldn't Use Roofstock?
in investing in real estate could use Roofstock. You don't need to
be an accredited investor, but you need to be eligible for
financing to buy the property if you don't have the cash to pay for
it in full.
Like any real
estate investment, though, consider the pros and cons carefully.
There's no guarantee when you invest in real estate.
Most investors buy
Roofstock Marketplace sight unseen. If this is your
first real estate investment or you're not comfortable buying
properties without seeing them, Roofstock may not be the best
Pros and Cons of
You don't need to be an
accredited investor to buy a property on Roofstock. Anyone can
invest in a Roofstock property if you have the cash or qualify for
The properties already have
tenants in them. You don't have to go through the hassle of looking
for tenants, and the property has cash flow from the date you own
Roofstock has hundreds of deals
a month. It's a qualified crowdfunding platform that makes it easy
for investors to find excellent properties.
Investors own the property
100%, unlike traditional crowdfunding. This means any profits
earned are 100% yours.
Investors don't have to worry
about making improvements. The homes are certified ready for
tenants. You don't have to worry about fixing up the
You can close in around 30
days. Each situation differs, but on average Roofstock purchases
close in 30 days.
Roofstock properties have a 5%
to 8% cap rate, and most investors have a gross return of around
Real estate is an illiquid
investment. If you need your money, you must either refinance the
property to tap into the equity or sell the home. Neither process
need more money than the initial cost of the home. As the owner,
all repairs, renovations, and other expenses fall on your
You must manage the property
yourself or hire (pay for) a property management service. This
takes time and eats at your profits. Tenants expect issues fixed
right away too.
Most lenders require a hefty
down payment to qualify for financing. If you don't have the cash
to buy houses outright, you'll at least need 20 - 30% of the
purchase price to invest.
Let's look at
Roofstock's features to see if it's right for you.
Roofstock doesn't have a membership fee. Anyone can search for and
buy properties on
Roofstock Marketplace. There are fees when you buy a
property, which we discuss below.
Searching for a home on Roofstock is easy. You can set custom
filters based on the price, location, and even desired returns. In
the advanced settings, you can search by many more filters,
narrowing down your search considerably.
and plans - Roofstock provides more than
pictures. You can view floor plans and take 3-D tours of potential
homes. Roofstock offers financial analysis, potential returns, and
other interactive tools to help you make buying
You can submit an offer for free. When a seller accepts your offer,
you pay a fee.
commitment - You aren't obligated to hold
a property for a certain amount of time. Once you buy the property,
it's yours to manage. While keeping the property is ideal, as
you'll earn greater cash flow, if you need to sell quickly,
Roofstock doesn't prohibit it.
properties - Roofstock does all the
property vetting. All you have to do is look at the pictures,
plans, and analyses offered by Roofstock to ensure the property is
right for you. If it has Roofstock certification, it's typically a
Money-Back Guarantee - If you aren't happy with the
purchase and tell Roofstck in writing in 30 days, they will relist
the property. If they can't sell it within 90 days, they will buy
the property from you.
for accredited investors - If you're an accredited
investor, you can buy shares of rental properties' home equity
equal to 1/10th of the equity. Roofstock handles all maintenance
and repairs, but you earn a prorated amount of the
retains at least a 10% equity ownership in each property in
Roofstock One - If you own at least 90% of the
shares in a Roofstock One property, you can convert your shares to
buy the property after six months. If you own less than 90%, you
can liquidate your shares after six months.
Roofstock Fees and
Like any investment
platform, Roofstock charges fees. While they are reasonable, you
should understand the total cost before investing.
Is the Minimum Roofstock Investment?
If you're buying a
property on Roofstock, there is no minimum investment requirement.
You'll pay the price of the home. If you're an accredited investor
investing in Roofstock One, the true real estate crowdfunding
platform, the minimum investment is $5,000. This ensures you'll
invest in at least 1/10th of a property's cost.
Much Does Roofstock Cost?
Roofstock charges a
fee only when you make an offer, and it's accepted. The cost is
0.5% of the sales price or $500, whichever is higher.
Does Roofstock Make Money?
money from both buyers and sellers. Even though anyone can use the
marketplace for free, there are fees:
Sellers pay a 2.5%
commission fee to Roofstock to sell their property.
Buyers pay a 0.5%
commission fee to Roofstock when they buy a property.
Even though this
sounds like a lot, total between buyers and sellers, Roofstock
charges half of the normal real estate agent
Is Roofstock a Good
Roofstock is a
great way to invest in real estate. Whether you've invested before
or this is your first stab at real estate investments. Our
Roofstock review showed the pros and cons of the service. Still,
overall, it's an excellent way for anyone to diversify a portfolio
with real estate while knowing the property is a good option with
tenants already in it.