Roofstock
Madison, WI · Member since 2016 · 3 posts · 4 votes
I'm under contract on a property with Roofstock and have previously purchased from a turnkey provider in the Chicago area.
It's important to note that Roofstock is a marketplace for certified, off-MLS properties with certified tenants in place. This means that Roofstock does diligence on the properties and tenants (all of which is available to you as an investor) and connects you to vetted property managers. They also have preferred relationships with lenders.
Unlike the firms more commonly referred to as "turnkey" operators, however, Roofstock does not renovate properties before sale, nor do they run in-house property management.
The upsides seem to be that:
The downsides seem to be that:
If you are familiar with Homeunion, Investability, or Mashvisor, they are all worth a look for comparison.
I find Roofstock's business model and fee structure to be clearer and more investor-friendly than close-ish counterparts Homeunion.
I haven't looked closely at Investability.
Mashvisor is an interesting research tool but not as powerful for largely hands-off property acquisition and management.
None of this represents an endorsement of any particular service; I'm just sharing my observations and opinions.
@Zach Evanish, thank you.
@Eric P.I have to say that I am very surprised that you didn't get a great response from www.roofstock.com for a couple of days! I am in the process of purchasing my 3rd SFH in GA with them and from day 1 I have felt like they were my team all the way, all of my questions and concerns were answered straight away and never once was I left hanging. @DYLAN BLUM I can 100% say that they are an amazing company to work with. I manage both of my SFH's in Atlanta area and I am about to close on my 3rd with www.roofstock.com in GA this month so in 7 months I will have purchased a total of 3 with them, I also self manage from Seattle, WA! Good luck with your search!!
Let me start by saying thank you all for sharing your experiences and opinions on roofstock. I have been researching this option after listening to the podcast from LMM. Interested in the Atlanta market since I already have rentals in this market. This makes it easier for me to visually inspect the property. I am also interested in the Jacksonville, FL market. If anyone has any insight on this market I would appreciate any feedback.
On a side note, I am also a certified home inspector in the Metro Atlanta area. I am more than happy to answer any questions you may have concerning an inspection done or that may need to be done.
Hi @Andres Rivero I'm in the Jacksonville market and would be happy to answer any specific questions you have about the market.
We're typically focused on Single Family Homes, Townhomes and Condos in Jacksonville and Orange Park.
Our acquisition costs are typically between $60-80K.
Our Renovation costs are typically between $7-12K.
After Repair Values are typically between $90-110K.
Our NET Returns for CASH Buyers are typically between 8-11%.
I've recently started working with more financed buyers and we've been projecting 10-15% Cash on Cash returns but we don't have enough proven data yet that I'd feel comfortable saying we're "seeing it".
I hope that helps. What other insights are you looking for?
Seems like mixed reviews, has anybody else had any more experience with them?
Regarding the financing with preferred partners, are you underwriting you the individual, or are roofstock buyers able to do a commercial loan on the property itself? I already have 3 mortgages, and I feel like my next one will be difficult to get, especially when starting from scratch with no relationship with a new bank in a new market.
Do you think you could easily get a 4th loan with these preferred lenders through roofstock? Do they understand investment property, or do they get confused about when they try to underwrite using all your mortgage obligations for 3+ houses across only your W-2 income?
@Gregory Keleshian Here is a more recent review you might find helpful. This customer purchased three Roofstock properties in one day from across the globe and he wrote a comprehensive, independent 4-part review series on Roofstock. http://www.fiftyweekvacation.com/the-ultimate-roofstock-review-part-1/
@Linda Dalton do you have to use one of of Roofstock's providers for property management services? Can you self-manage?
@Anthony Drew Gary you can sel manage or select a PM company of your own choice!
@Linda Dalton I am curious what is the cash on cash you are getting on your properties from Roofstock. I am not seeing great numbers on their site as I am if I were to go through a broker separately albeit with more work obviously.
Hello
Has anyone looked into the new Rootstock one? They are offering shares in homes (1/10) for accredited investors. I am very interested in this idea, but I am trying to find anyone who has experience with it.
@Jonathan Bigelow Your story sounds painful and Im sorry you had to go through that, but knowing what you went through will help people like me who are in the process of vetting this company. Just 5 minutes ago, I posed some questions in the most recent Roofstock thread as follows: Will I be able to get info on the tenants like, their pay history, issues the tenants had with the property etc, because knowing these things will shed a whole lot of light on WHY THE CURRENT OWNER WANTS OUT. Thank you Jonathan.
@Jonathan Bigelow Your story sounds painful and Im sorry you had to go through that, but knowing what you went through will help people like me who are in the process of vetting this company. Just 5 minutes ago, I posed some questions in the most recent Roofstock thread as follows: Will I be able to get info on the tenants like, their pay history, issues the tenants had with the property etc, because knowing these things will shed a whole lot of light on WHY THE CURRENT OWNER WANTS OUT. Thank you Jonathan.
The tenant ledger is normally available on the listing page. You obtain copies of the lease after executing the PSA. You have an inspection report on the listing page typically and obtain disclosures prior to executing the PSA. As to why the owner is selling, you can ask if the seller will disclose that but Ive never cared.
@Jonathan Bigelow Your story sounds painful and Im sorry you had to go through that, but knowing what you went through will help people like me who are in the process of vetting this company. Just 5 minutes ago, I posed some questions in the most recent Roofstock thread as follows: Will I be able to get info on the tenants like, their pay history, issues the tenants had with the property etc, because knowing these things will shed a whole lot of light on WHY THE CURRENT OWNER WANTS OUT. Thank you Jonathan.
The tenant ledger is normally available on the listing page. You obtain copies of the lease after executing the PSA. You have an inspection report on the listing page typically and obtain disclosures prior to executing the PSA. As to why the owner is selling, you can ask if the seller will disclose that but Ive never cared.
Ok thanks for that info. I personally would care, I mean who wants to inherit somebody elses headaches. Thats just gluttony for punishment imo :). Thanks!
@Angelique F. , I haven't purchased a home yet on Roofstock but have been following the listings for over a year now. I may be someone who is conservative and it sounds like you may be as well so I felt like I should let you know about some trends that I am noticing.
My standards must be higher than most because I rarely see a home on Roofstock that makes my personal cut offs. When I do see a home that reaches my comfort zone ( usually just barely), I have lost the bid to others who are likely overpaying and possibly making cash offers. This may be out of despair as people are moving money from the stock market to real estate. I will continue to be patient and cautious before buying a home. There are definitely no deals to be had here and by the nature of the product and our current times, the seller benefits more than the buyer. I'm ok with this because he website offers convenience and is great for someone like myself who works over 60 hrs a week. You may not be ok with this because it affects your bottom line number and you losing some money for this convenience.
Roofstock does not have accurate tax info. Yes, you should always check for myself but you would think that it would be very easy for Roofstock to get this info from the seller. Taxes were listed for 1500 when they were really 4000 ( huge difference) when I checked out this particular home with the tax assessor. It would be a great business model to have such info up to date and when you don't..it makes me question the website entirely. Also, you will see that their numbers for capex and maintenance are typically low which inflates the COC. Remember you can and should change the numbers yourself to see if the the COC is still worthy.
Someone shared with you how to check the tenant ledger and this is a great tool. I am glad that this is offered upfront and I appreciate that Roofstock makes it easily accessible. I am not interested in inheriting anyone who has late payments ( or section 8 but that is my personal preference). I ignore most homes that have tenant's with late payments because I don't need the headache at least not this early on.
I'll use anywhere from 5-12.5 % for maintenance, cap ex and vacancy rates and still the COC tends to be low. You will rarely see a home in a low crime area (check trulia's crime map to start with). Roofstock's rating of a neighborhood is a generalization.
I usually just look at the homes that are listed for "open house" and ignore the rest. The better deals sell within the open house period and the rest are junk to me (maybe that's harsh but again my opinion). They added a nice search tool that you can save with your preferences and get email alerts.
The age or state of the roof, HVAC etc used to be given to help you make a better decision. For example, it used to be that a roof was listed as excellent condition having 5 or more years of life left but now things are categorized as "functional" or not functional needing repairs. Read through the inspection report and use their pics to help you but all reports vary in the amount of detail which can be frustrating.
Now all of this is under the assumption that you are certain type of buyer that Roofstock is catering to..it's not for everyone. There are slim pickings out there for a potential buyer like myself and even slimmer pickings on Roofstock but I remain hopeful. It is a great concept and I enjoy using the website. All of the best.
@Keith Anderson -How is your rootstock acquired home performing 3 years later?
@Linda Dalton I'm about to buy out of state.
@Jason G. -What's your opinion 5 months in?
@Linda Dalton I'm about to buy out of state.
I still own the 3 properties and two of the original tenants are still in place! I am in the process of selling them as I want to move into multifamily units in WA State! I no longer self manage my OFS properties, to be honest self managing was something that I should have kept doing, I enjoyed it and frankly I did a pretty amazing hassle free job and my tenants were happy. I have yet to find a PM that has the investors best interests, the the hardest part of OFS investing. Good luck with whatever you decide to do.
Linda
@Keith Anderson -How is your rootstock acquired home performing 3 years later?
@Linda Dalton I'm about to buy out of state.
@Jason G. -What's your opinion 5 months in?
5 months? The first Roofstock property I purchased was July 2017. I've been very happy with all four properties from them to date.
@Keith Anderson -How is your rootstock acquired home performing 3 years later?
@Linda Dalton I'm about to buy out of state.
@Jason G. -What's your opinion 5 months in?
I actually never ended up closing on the home, which was in Boca Raton, FL.
Roofstock initially advertised the property as not requiring flood insurance, but the lender required it. Turns out the actuaries were ahead of the curve on assessing the impacts of climate change, and the flood insurance was so high that the property would never have cash flowed as a rental.
For a year or two after I passed on it, I did check on that property to see what came of it. It changed hands within a year or 18 months of being sold by Roofstock for a nice capital gain, so had that been my strategy, perhaps I could have done OK. But as a buy-and-hold investor, I think I dodged a bullet.
My experience with Roofstock was pretty good overall, but I ultimately never acquired any properties through them.
Since there's some new interest in Roofstock, I thought I'd post my experience which, unfortunately, hasn't been as stellar as others. I am not intending to knock Roofstock at all and hope to be a customer of theirs in the future, but my first shot with them has been disappointing to say the least.
I found a house that I liked in a decent area in Georgia (most of the GA properties are either in the boonies, in "war zones," or areas with high vacancy). I live in Atlanta so I was able to drive by and take a look; the house was really cute. I was excited to say the least. The asking price was over the market price by a good $10k, so I "negotiated" with the seller back and forth 5 or 6 times before we landed on a number we could both live with, though I was still paying more than I wanted to for the house. The numbers worked, however, so I was ok with moving forward. I put "negotiated" in quotes because there's no way for you to justify a lower price to the seller (and I had plenty of reasons: comps, repairs, etc.) why they were asking too much. You simply submit a dollar amount and the seller accepts or rejects it.
After the offer was accepted by the seller, Roofstock was quick to act, putting me in touch with a mortgage broker and an insurance agent. I signed the contract, applied for a loan, and talked to Roofstock's insurance agent and a few others. About 3 weeks later I got a call from Roofstock indicating that the buyer had stopped paying rent the month before I moved ahead with the purchase and the current owner was going to evict them. Roofstock asked me what I wanted to do. I said that if the seller could turn the place over and get a new tenant within a reasonable amount of time, I'd stick with the contract. It was a good house, after all.
Another few weeks go by and Roofstock calls to advise me that I cancel the contract. Things were taking longer with the eviction than expected. The seller was still interested in selling me the house, but they didn't know when that was going to be. Deciding I didn't want this dragging on forever while being legally bound to the offer, I decided to cancel the contract. Roofstock said they'd keep me updated on progress as the house was turned and new tenants were found. That was 3 1/2 months ago.
I've emailed and called Roofstock 5 or 6 times since then. They tell me that things are just taking time. There were problems getting the gas and electric out of the evicted tenant's names. The turnover took longer than expected. Nobody's renting during the holidays. They usually get back to me 3 or 4 days after I contact them asking for a status update.
So now I'm here with a hard pull on my credit for a mortgage I don't need and dozens of hours sunk into preparing to buy the house. Updates from Roofstock have been terrible, but I've given up at this point. I don't think any of this is necessarily Roofstock's fault (aside from the lack of communication when things didn't go perfectly). Yes, the house was still listed on their site showing that it was occupied and the tenants were current with their rent, but that's really more on the current owner of the house than Roofstock - how would Roofstock know? So I'm only frustrated with the communication, but it's definitely not been smooth sailing for me.
Sucks - thanks for sharing your experience. Isn't there a way for Roofstock to verify that tenants are paying rent? Since the only value they provide is essentially in doing dilligence I would expect their dilligence to be rock solid.
@Keith Anderson thanks for the helpful information provided, much appreciated.
My friend also did not have a pleasant experience. They had to put about $8,000 of immediate repairs into a home just over a year after purchasing a property, and the management team did not do a very good job coordinating anything. I think they are still in the negative, and then they offered to sell the property for less than they purchased it for.
@Linda Dalton still feeling great about your roofstock experience?