It’s been months since I started this thread. Since then, many people have shared their opinions and insights, both privately and publicly. Piecing together what they/you told me, what I read, what I experienced, and some interesting new developments, you might find this post very intriguing, perhaps a little disturbing.
@Baris Keser concluded that most of the listings on roofstock are overpriced compared to all the homes that are sold/for sale in the area and also current rental income and market rental income is about 10-15% over the comps as well. He has done his study for Georgia 31097 zip code and found for sale homes about 30% discount of the house that is listed on roofstock.
@Tony Kim mentioned that Roofstock listings aren’t exactly what he would call good deals.
@Brian Ploszay wrote that Roofstock properties in his market are overpriced.
Here’s what I find very interesting:
In another BP thread that @Jason G. started (the same Jason who wrote Roofstock a long ravishing review and posed those good questions I used as template on this thread), he wrote that he was told most of Roofstock properties are sold for 97% of list price. I don’t know who told him that. I presume it was somebody from Roofstock given the seemingly good relationship he has with Roofstock. Here’s the link https://www.biggerpockets.com/forums/92/topics/468304-roofstock-case-study
In an article, Roofstock CEO said that roughly 93 percent of investors on the platform are buying out of state and 75 percent are first-time buyers. Here’s the link https://www.curbed.com/2019/9/10/20852849/millennial-buy-a-home-homeownership-remote
If what they say is true, it seems that there are too many naive and inexperienced newbies like myself overpaying for the properties listed on Roofstock, while being unaware of the depth of the water.
However, I’d like to point out that buyers are free to offer less than the list price and it’s up to sellers to accept or decline the offers.
A very interesting new development:
The Roofstock certified property management company in Florida that ripped me off and screwed me over appears to have had hundreds of fake positive reviews written on multiple review sites. Yelp issued consumer alert on them. It seems that even their CFO impostures as investor to write themselves five-star reviews and the employees compliment themselves and each other.
I complained about this company and pointed out their shady conduct to Roofstock. To my disappointment, Roofstock kept it on their certified provider list. This PM company has also been an active seller on Roofstock.
I filed a complaint with the Florida Attorney General along with the evidence I had analyzed and compiled, reminding them of the legal precedent of the NY attorney general imposing fines as high as 350K on a number of companies that wrote fake reviews and how a scammer behind hundreds of fake reviews on TripAdvisor received prison sentence last year. The attorney general office scanned all the hard copy pages I mailed, attached the PDF file to an email they sent me, saying that they are sharing my correspondence with their Consumer Protection Division. I don’t know whether they’ll eventually bring enforcement actions upon this PM company or not, but I doubt they’d bother to take the time to scan all 21 pages if they don’t plan to do anything about it.
I also brought it to Better Business Bureau’s attention that this PM company might be writing fake reviews on BBB. BBB took down their page a couple of weeks later. My guess is their BBB accreditation will be revoked.
Another interesting new development:
I sold this Florida property through a local wholesaler to an investor located in Israel, so the end buyer is not just an out-of-state investor, but an out-of-country investor.
The end buyer did some light rehab on the property and listed it for sale on the MLS. It has been sitting on the market for 186 days and the list price has been reduced multiple times. Zillow shows 1256 views but only 41 saves since listing. This investor will lose money for sure.
The biggest winner in this whole thing is the local wholesaler who made a quick 10K assignment fee. Myself and the investor after me (both unfamiliar with the local market) are the losers.
Last but not least, I’d like to point out that you don’t know if an investment is good or bad until you fully exit. It’s especially true for RE investments. You could be making 10K/yr of rent from one property for 10 years straight.
But if, say, there’s an undisclosed material fact or omission on the inspection report, polybutylene piping for instance (I’m just giving out a random example off the top of my head, not implying anything), those pipes suddenly burst 10 years after you buy the property and floods the house, the water damages could easily exceed the sum of the profits you’d made for the past ten years. Most investors who buy rentals from online platforms (not just Roofstock) out of state keep them as buy-and-hold. Many of those platforms are too new for certain types of “ticking time bombs” to explode. It’d be interesting to see how that plays out in the next few years. In the meantime, ignorance is bliss.
It looks like most ppl on BP only read the first page of any thread. The more interesting stuff is on the later pages really. I assume people who’ve contributed to this discussion are interested to know more and many people only check posts they’ve been @ed in. Sorry to disturb you if you don’t want to be @ed. Please don’t feel pressured to reply.
@Heshel Mangel@Account Closed
