Buying Portfolios vs Single Properties on Roofstock.com

5 Replies

Hi guys! I'm an investor looking to diversify into real estate. I'm located in California, and I'm looking to buy into remote properties since it seems that the return is much better than locally. However, I do not want to go through the process of managing the property myself and having to fly back and forth. I found a site called Roofstock that claims to do all the work for you and it seems that there are pretty good reviews and experiences. I see also that they sell entire portfolios. Has anyone had any experience buying portfolios from roofstock?

Are there any pros cons to buying a portfolio over just buying multiple of your own single property? Is it bad to start out by buying multiple homes in one general location (as in a portfolio) as opposed to a more expensive single property?

Specifically in the case of roofstock.com, I'm leaning towards the portfolios since they seem to be a better deal than the individual properties.

Sorry if these questions are obvious or have been asked before!

Jenny,

Great question as there is indeed a lot of focus placed predominantly on cash flow that makes the returns associated with out of state appear to be the way to go.

However, real estate returns are obtained from 4 areas: cash flow, appreciation, tax benefits & equity build up through amortization.  When combined with the appropriate use of leverage, you can supercharge your returns in excess of 20% right here in the local market.  

Often appreciation is overlooked, however this is a very important component that allows you to re-leverage at the appropriate times to build your portfolio towards achieving the goals of income replacement and wealth building.

Keep educating yourself with the knowledge from the BP community.   Once you have the right team in place including property management, investing in your own portfolio is not that intimidating.

Does this answer her question?  I have the same query, if possible, would it make sense to just purchase portfolios instead of starting grass roots.  and has anyone does this?  2 million dollar portfolio..   purchase, the rents come in and cover the 2mil loan while having cash flow..   I know I'm burning through details, but if I could hack that size of a loan..   that would make sense..  you would also be able to immediately 1031 exchange your properties day one and grow from there..   starting with one sucks to be honest..     the more I research this - and I do plan on starting my own portfolio - it's not has easy as some say.   it's not - no money down etc etc..   you need thousands and if you dont' just flip, you'll need more thousands..  I don't see this mentioned enough.. even on BP podcasts..   If you don't live in your rental and your purchasing as a rental, it's big bucks to hack this..   which leads me to .  why not speed this up and buy a large portfolio instead??  

@Jesse Kerr , there are some advantages to buying performing portfolios.  Just like there are advantages to buying existing businesses rather than starting your own.  The devils in the details.  It's awful easy to slip in a few dogs into a portfolio that kill your overall return.  If you and @Jenny Peng are just looking a gross cash then they won't hurt you. But if you're wanting the best return on your investment the dogs will give you fleas too and reduce your return to rubble.

Also , When you buy a portfolio you still have to establish your intent to hold in order for them to be eligible for 1031 treatment.  You can't just by the portfolio and start selling.  If you do that your intent when you bought was to resell not to hold and those 1031s won't fly if questioned.

Originally posted by @Jeffrey Isenberg :

Jenny,

Great question as there is indeed a lot of focus placed predominantly on cash flow that makes the returns associated with out of state appear to be the way to go.

However, real estate returns are obtained from 4 areas: cash flow, appreciation, tax benefits & equity build up through amortization.  When combined with the appropriate use of leverage, you can supercharge your returns in excess of 20% right here in the local market.  

Often appreciation is overlooked, however this is a very important component that allows you to re-leverage at the appropriate times to build your portfolio towards achieving the goals of income replacement and wealth building.

Keep educating yourself with the knowledge from the BP community.   Once you have the right team in place including property management, investing in your own portfolio is not that intimidating.


Jeff is 100% correct! I have 4 properties with roofstock and would have to admit, it is truly AWESOME!  
now I cannot speak for everyone who has invested in this however what I can do is speak upon what I experienced. Now, what Jeff says above, educate yourself further in regards to 1031 exchange is and the different avenues you could take to build your wealth.   there are other avenues or you could obtain rental portfolios without even seeing the property never mind dealing with the tenants.

However, what I can’t tell you is that I started making money since day one with my first property and now all four! Now a quick disclaimer I am not in no way shape or form affiliated with roof stock nor am I paid to promote them or anything like that so invest at your own risk!
All I know is that in my experience roof stock touches base on everything you have said you do not want to do, for example “play landlord” you basically just sit back and watch the money roll in (given it is a good investment).  However I am building wealth off of roof stock and started with $25,000.  
Although skeptical at first, my returns are amazing! Also, For each one of my rentals I have property management team they set you up with for each. Some people just set it and forget it however I got into the whole thing. I actually requested their names and numbers and touch base with them from time to time to see what’s up and if there is any obstacles they are facing. Just by speaking with these guys you gain more and more knowledge as well as more insight on how for each one of my rentals I have property management team they set you up with for each. Some people just set it and forget it however I got into the whole thing. I actually requested their names and numbers and touch base with them from time to time to see what’s up and if there’s any obstacles they are facing. Just by speaking with these guys you gain more and more knowledge as well as more insight on how everything works. 
The main things I like about roof stock that other platforms related to their function is:

-You are literally just the owner- meaning you don’t even need to speak with anybody and just receive updates through email. You don’t evict nor vet tenants 

-The properties that you obtain are already rented out meaning they already have cash flow as soon as you invest in them. As I stated I saw cash flow the first week since it was the end of the montThe properties that you obtain are already rented out meaning they already have cash flow as soon as you invest in them. As I stated I Instantly saw cash flow!

-they give you easy to read tools and data for each one of your rentals that you could easily measure and leverage  

-It’s like they took Amazon, Podio, and Fundrise, and smashed them together!  I am loving this! 

Gary!