Should I buy using Roofstock?

[Chandler Harker]

I found Roofstock.com to be very helpful in determining rent value, expenses, current tenant history, and management options but I was wondering if successful investors actually use this website. It seems like this website does most of the due diligence for me but it may be hard to find a great deal Thoughts?

[Curt Smith]

I glanced at roofstock for GA properties.

- rent is very low.  I suggest use what is currently for rent via zillow.com rentals.  Current rent is best.  Even rentometer.com is stale (low) in a fast moving rental market.

- Selling price is close to retail, meaning high for a rental.   

- repair is typical for an rental occupied property.

My view is:  typical for turnkey properties, low performance, defered maintenance that yoiu'll get hit with typically sooner then later.  So you net net performance over time is much lower than I get buying fixers, rehabbing myself then renting for top $$, in the exact same neighborhoods.

But I admit if you can't do what I do locally, you are stuck just throwing money at these turn keys.  I don't have any helps unless you get over the hump and learn how to remote rehab, remote lease up and manage.  I self manage my rentals that are 1.5+hrs away.  That is easy when you use a local contractor as your support person.

I suggest you check zillow.com for sale.  Set exact same year range, size, beds, baths, area and see what is available on the free market?  Also check realtor.com, there's in effeciences that make for different deals on realtor vs zillow.

[Chandler Harker]

@Curt Smith Thank you for the feedback and expertise. It’s nice to hear what successful investors have to say because I’m 21 and haven’t bought my first property. I’m looking to invest locally first(Indianapolis) but then maybe move to remote areas with good yields.

[Jason G.]

Originally posted by @Chandler Harker:
I found Roofstock.com to be very helpful in determining rent value, expenses, current tenant history, and management options but I was wondering if successful investors actually use this website. It seems like this website does most of the due diligence for me but it may be hard to find a great deal Thoughts?

 Just type Roofstock into the bigger pockets search. There are quite a few reviews by those who have used it.

[AJ Singh]

@Chandler Harker

you dont need to buy local using Roofstock. i suggest going to a local real estate investors meetup and getting educated on the local area first. hope some local connections will  lead you to a successful real estate investments.

[Tim Johnson]

Happy to share my experience:

I was looking to diversify geographically, and though maybe a small ($100K) property might be a good way to test drive Roofstock. (And apparently I also felt like being an idiot, and throwing some money away). As others have noted, you’re unlikely to find a screamingly great deal on Roofstock, but I found a property I felt might be decent in the Pittsburgh. And with Roofstock’s “rent guarantee” program (essentially Roofstock promises payment 90% of rent starting 30 days after close if PM company can’t place a tenant, as well as covering initial leasing fee.). That coverage swayed me, and made the offer and had it accepted.

Through the purchase process, have to say the Roofstock team was exceptional. The website is great, very easy to use; and the people I interacted with were very professional, quick communication, everything you’d want.

...and then it went off the rails.

After closing, it was a struggle to get communication. When I did get communication, it was like they were using the wrong boilerplate. I was assigned to a "Zack" who I will not be surprised if I one day learn is actually a bot. As you have to use one of their "approved" property management companies to get the "guaranteed rent" program, I wanted to get those introductions complete. Should be simple enough, right? Instead, the email dialogue went like this: Roofstock Zack "Roofstock will notify your property manager that your property has closed and transfer all documents such as tenant contact information, lease, ledger, and final HUD." Me: "can you connect me with a property management company" (property is actually vacant!). Roofstock Zack: "We are making sure your PM, Marketplace, will receive the security deposit, the tenant info so they can collect rent payments, and the keys if available". This went on for waaaaay too long. Took more effort than it should have to convince that the property is vacant and we needed to start marketing.

One side point here, Roofstock does have a 30 day satisfaction guarantee. Potentially this “slow rolling” during that 30 day period is designed to stall the amount of time you have to realize there are serious problems that need addressing?

When we finally got locked in with a property manager, some issues started to pop up. Apparently, some of the kitchen cabinets don’t have doors; the water heater was actually red-tagged (need proper venting) and the PM feels the steep driveway is a big deterrent. If I squint, in one of the photos in the home inspection report, just a corner of a cabinet without a door peeks out - but all the kitchen photos do not show this issue! The red-tagged water heater is not mentioned at all (I’m out $1500 to fix that one!).

90 days in, I’m still tenant-less and my efforts to collect on the “guaranteed rent” program are fruitless. Responses include “I appreciate you!” “My manager is out of town!” “These things are slow, we need a few more weeks to set it up!” In their marketing material, they refer to the “guaranteed rent” program as “Immediate cash flow”. I’m reminded of the line in A Princess Bride: “There is that word again...I do not think it means, what you think it means.” One of us, at least, doesn’t get the word “immediate”.

Have tried addressing these with RoofStock, but the response are usually dodges - when asking about how to get the guaranteed rent program going, I get responses like “what is your property manager doing to get a tenant in?” “We will reach out to your property management company to see what can be done about getting a tenant”. “My manager is out of town, but I’ll reach out”. As apparently only Zack-bot’s manager can resolve issues, I’ve asked for that person’s contact info...dead silence.

Frankly, as I am 90 days in with no progress on collecting on their “guaranteed rent” program, I had have to advise it appears to be a marketing scam they have no intention of following through on - as always, caveat emptor.

They’ve also shown no inclination to address the key issues (red-tagged water heater; missing kitchen cabinet doors) that were missed in the vetting and inspection process. if you’re making a remote investment, you are 100% reliant on the quality and integrity of the partners you’re choosing...again, caveat emptor.

If you’ve been doing this for any period of time at all, I’m sure you’d agree that any transaction can go sideways at any point. The key to getting through those moments is at least being able to pick up the phone, or sit down in person, and work out a fair deal. Perspective is everything, but I think my concerns are pretty reasonable and Roofstock should be working to set them right. Unfortunately, my experience with Roofstock is the opposite - a lot of dodging the questions, not willing to back up their marketing claims and transactions. They say you learn more about someone in stressful situation than in a successful situation - and I am learning a lot about how Roofstock handles disappointments. Can’t recommend them at this point.

[Alvin Lee]

@Tim Johnson Hi Tim, I am finding myself to be on a similar boat as you in regards to roofstock. I purchased a property in South Carolina for about 95,000 and closed a little over two months ago. Since closing on the property, I've had to make repairs on an almost weekly basis, which at first I didn't mind and chalked it up to doing business within real estate. During my first month of ownership, I received rent incredibly late (about 3 weeks late), which I believed was just a delay between transitioning between the previous property management company to our current one (marketplace homes). Now, however, the tenant is a month late on rent, and will most likely be late on the next month. I have not heard anything about the reasoning as to why it has been late or if they are going to pay at all. We have issued a 3 day notice and will be starting the eviction process. Keep in mind that this is just after 2 months of ownership. I've contacted the property management company on numerous occasions to see if the tenant will be paying but have not heard back as to whether the tenants have responded. I've also reached out to roofstock for customer support, but I have yet to hear back from them as well. I would be wary when investing with roofstock at this point. Seems like as soon as a deal closes, they readily drop you and offer no support. Even during the buying process, my roofstock associate assigned to me Zach Carson provided subpar service. He rarely communicated or updated me with anything with the property. After reading all these positive reviews for roofstock, I was really hoping for a different experience but am underwhelmed by it all. Thanks for letting me vent! Alvin

[Chandler Harker]

@Tim Johnson Thank you for the story. I appreciate hearing from someone who has used roofstock. I am sorry that happened to you but at least you saved myself and many other investors from this mistake. Keep pushing as an investor, you’ll make it.

[Chandler Harker]

@Alvin Lee Thanks Alvin. I appreciate your valuable perspective and experience. It’s valuable to know that roofstock isn’t as good as they say they are and ditch you whenever you close on the house

[Zach Evanish]

@Tim Johnson @Alvin Lee Sorry to hear about your experiences as this is not typical for Roofstock buyers. Our head of customer success has reached out to you with a solution. We know there were some delays in response and have put in measures to prevent that in the future. We appreciate your feedback and hope we’ve resolved this to your satisfaction. If you would like to discuss this further please feel free to reach out to me directly.

@Chandler Harker Let me know if I can help answer any questions. I can walk you through the process and help you navigate the site to find a deal that suits your needs. We provide a wealth of data and information in the diligence vault on the properties.

[Alvin Lee]

@Zach Evanish Yes, I spoke to Lizzy from customer success who provided me with a solution. Thanks Zach.

[Simcha Davidman]

@Tim Johnson How has your experience been since your original comment? Thanks!

[Tim Johnson]

@Simcha Davidman - to be fair, after my original post they did get caught up on the guaranteed rent program.  Seems like there were some process issues on their end as far as how to implement the program.  We did also come to agreement on the numerous house condition issues that I felt should have been caught in the home inspection process.  Once I got their attention, we were able to get things resolved.  Haven’t bought through them again, so can’t say if they have looked at how to improve upfront customer service.  Hope that helps!

[Simcha Davidman]

Thank you!

[David Lutz]

@Zach Evanish For what it's worth I purchased a property through roofstock in Nov, and am in escrow on another one now. Although I agree with the comments that BRRRR'ing is going to provide higher returns, that's always true but not always practical (I'm OOS). The properties I'm buying have been at least as good if not better than anything I've been able to find on the MLS or with agents. I do agree with the delayed maintenance concern. There's about 14K of delayed maintenance on the roofstock owned property I'm currently buying. Will have to wait to see what kind of concession the portfolio manager will make on it :)

In general I've been pretty happy.

[Aj Parikh]

@David Lutz Congratulations on the purchase. I also purchased a SFH in Memphis, TN using Roofstock and I haven't had any major issues since. Also, hope you were able to use the $1000 referral credit. If not, PM me and I can send you that link for your next one.

[David Lutz]

@Aj Parikh    Plumbing issues... of course       no problems with roofstock though. I'm waiting on the $1000 to show up, but it's supposed to eventually. 

[Aj Parikh]

@David Lutz Did someone refer you to Roofstock? Usually someone who has purchased with Roofstock can refer you and then you can create an account and purchase which will make you eligible for the $1000 visa gift card. I was able to get that the day the seller accepted my contract. 

[David Lutz]

No one referred me, but I already set up and completed my first purchase +6 months ago. Are you suggesting I should claim my second house purchase is a referral or that the first one from she's ago was and I forgot to bring it up?  Not sure how that would work. Hard to claim I forgot to do it since I've referred a few other people since (and a friend of mine who I referred bought a house through them). I get it that it would have been better if I claimed someone referred me from the start, but I think I missed the boat.

[David Lutz]

@Aj Parikh Dude. NOT COOL. I appreciate the hustle, and it's not like I'm going to return the $1,000. But it's messed up that you would tell Roofstock that I'm your referral without asking me. Again, I don't mind working the system for free money, but it's really poor form to do something like that without telling the other person involved. You should be aware it's a huge red flag if you ever want people to consider working with you.

It's also obvious that you're trolling BP for people to list as referrals to roofstock.