February 20, 2019

Roofstock Review

Investing in real estate isn't just for real estate experts. With the right company by your side, you too can invest in real estate.

Roofstock is a turnkey real estate investment company helping potential real estate investors realize their dreams. Roofstock helps investors purchase single-family homes in certain markets where investors can make a profit.

Roofstock takes all of the work out of investing in a home. They do the due diligence so you don't have to take the time and resources to do it. You then decide which, if any, homes suit your needs. If you like a home or homes, you buy them, conducting a large majority of the work online from the comfort of your own home.

You may never step foot on the properties that you own, but that's where Roofstock says the beauty of the process lies. Keep reading to see if it's all that they promise.

How Does Roofstock Work?

Roofstock brings together buyers and sellers of rental properties. As a buyer, you can search for homes by location, price, or even potential returns.

Once you choose a property to view, you'll see visuals of the property (floor plans, pictures, and 3D tours) as well as the property inspection report, title search, and quote for insurance.

You can then use Roofstock's interactive tools to get a good estimate of the property's cost and your potential return. If there is a current lease on the property, you'll see those details as well as the tenant's payment history.

Roofstock also provides a rating on the neighborhood and schools. If you wish, they can also give you information on local property managers.

Roofstock conducts all due diligence on the property, including the inspection. In fact, the properties they list are Roofstock Certified Properties. This means that they went through Roofstock's strict evaluation process. This includes:

  • Property inspection by a professional inspection firm

  • Complete title search and examination

  • Valuation of the property

  • Valuation of the rental market in that area

  • Evaluation of the current lease terms if the home has a current tenant

  • Summary of the current tenant's rental payment history

Once you close on the property, you start earning rental income. If you opt for a property manager to handle the property and the rent, you'll receive the net income from the rent directly from the property manager. You aren't obligated to hire a property manager, though. If you are comfortable self-managing the property, you are free to do so.

Selling Your Home with Roofstock.
Even though your investment isn't liquid, you can sell your investment homes if you need money in hand. Roofstock can help you sell your home in a few simple steps. They do have strict guidelines regarding who can sell with them.

In addition, they continually change the requirements, so you should contact them if you want to try listing your home with Roofstock to see if it's an option.

Who Should Use Roofstock

  • Anyone who wants to invest in real estate but doesn't have the time for the due diligence. Roofstock's professionals handle all of the work necessary to determine if a rental is worth it or not. You don't have to step foot in the property, but you will know more about it than you would if you went through the property yourself.

  • You have an interest in investing in real estate in one of the 21 states Roofstock operates.

    • Alabama
    • Arizona
    • California
    • Delaware
    • Florida
    • Georgia
    • Illinois
    • Indiana
    • Michigan
    • Minnesota
    • Mississippi
    • Missouri
    • Nevada
    • New Jersey
    • North Carolina
    • Ohio
    • Pennsylvania
    • South Carolina
    • Tennessee
    • Texas
    • Wisconsin

    Some states have a market in just one city, while others, like California, have markets in several cities.

  • Anyone who doesn't know how or doesn't want to find tenants. Many of the properties Roofstock lists already have tenants with a current lease. You take over the management instantly upon closing on the house. You and your tenant can then decide together to renew the lease or terminate it. If you do terminate it, your property manager will help you find new tenants and even negotiate the rent.

Roofstock Customer Service
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Reasons We Like Roofstock

  • It's free to join Roofstock. You don't have to pay to register for the site. You can even view the available properties without signing up for an account. Once you are ready for more information, though, you'll need an account, which will not cost you a dime.

  • You don't have to do any of the legwork. Visiting homes, determining their worth, checking out the market, and finding tenants is a lot of hard work. Rofostock does it all for you. If you want, you can pick a property online, make a bid on it online, and even complete the paperwork online.

  • Roofstock provides a 30-day, money-back guarantee. If you aren't satisfied with the property after buying it, you have 30 days notify Roofstock. If you do, they will relist the property in their marketplace. You are responsible for maintaining the property until it sells or up to 90 days. If it doesn't sell after 90 days, Roofstock will buy the property from you. Either way, you get a full refund of your purchase price.

  • You can get guaranteed rent on vacant properties. If you buy a vacant home and no one rents it within 45 days, Roofstock will pay you 90% of the market rent until it is leased. You must be working with a certified Roofstock property manager in order to get the guaranteed rent. You must also make any necessary repairs that Roofstock made you aware of before buying the home within 45 days of closing to get the guarantee.

  • You start collecting rent right away on leased properties. If you buy a home that is currently leased, you start earning rent on day one. If you are lucky enough to find a leased home with a tenant that pays his/her rent on time, you've hit the jackpot.

  • You'll know the home's condition. As a part of their vetting process, Roofstock's inspectors provide you with a report that details the repairs the home may need moving forward. If the home currently has a lease, the report usually shows repairs you'll need to do before turning the home over to another tenant upon lease expiration.

  • You don't need to be an accredited investor. Many of today's real estate investments require you to be an accredited investor, but Roofstock doesn't. In order to be an accredited investor, you'd need a net worth of at least $1 million and annual income of at least $200,000. Roofstock doesn't have any such requirements, though.

  • You'll save on fees. When you buy a home listed on the MLS using realtors, you'll often pay a 6% commission fee. Even though the seller pays the commission, the cost is built into the price of the home. Roofstock charges just 0.5% of the contracted price or $500, whichever is greater. While this is a fee you pay out of pocket, it will likely save you more money than buying a home through a realtor would cost.

  • Roofstock provides access to their financing and insurance partners. If you take Roofstock up on their offerings, you won't have to search for any professionals on your own. They can help you choose the right mortgage lender (if necessary) and insurance agent. They claim their lenders and insurance agents charge lower fees compared to others in the area.

  • You can purchase real estate portfolios already created. If you don't want to take a chance creating your own real estate portfolio, you can buy ready-made portfolios through Roofstock. You'll be able to see the net operating income and cap rate right off the bat. You can buy portfolios as is or cherry-pick the properties you want.

Reasons You May Want to Look Elsewhere

  • You need a lot of money upfront to invest in the real estate. The homes range in price based on the areas they are in. You can either buy the home outright or secure a mortgage. If you do need financing, you'll need between 20% and 30% of the purchase price for a down payment.

  • Your investment isn't liquid. You aren't buying a liquid investment you can sell in the market any time you want. You are buying a physical home that you must sell in order to have access to your funds. If you aren't in it for the long term, it's probably not the right investment for you. Not only can it take months to sell a home, you should let it sit for a while so that you can earn the rental income as well as give the home time to appreciate.

  • You'll need a large amount of reserves on hand. Owning a home means you are responsible for the cost of repairs and maintenance. You can't predict when the water heater will break or the pipes will burst. You have to be able to pay for the repairs at a moment's notice. You may need several thousand dollars on hand at all times to make sure you can cover anything that goes wrong.

How It Compares

HomeUnion: HomeUnion is another turnkey real estate company helping investors find the right homes to buy. HomeUnion offers more than just single-family homes, though. They offer one- to four-unit properties.

They have a quick questionnaire that will help guide you to the right property type. HomeUnion doesn't provide you with homes that already have tenants, though; they find the tenants for you after you buy the home.

Morris Invest: Morris Invest not only finds good investment properties for you to buy, they also fix them up, find tenants for you, and manage the property. All you have to do is invest your money and earn the profits.

With Morris Invest, you schedule a consultant with one of their experts, pick your property, and they handle the rest.

Memphis Invest: Memphis Invest operates in Tennessee and Texas, offering investors newly renovated homes to buy. Memphis Invest does the renovations, finds the qualified tenants, and handles the property management for you.

Memphis Invest does give you access to the home's renovation reports so that you have an idea of how much value they added to the home.

Bottom Line

Investing in real estate doesn't have to be time-consuming. Roofstock can do the hard work for you if you have the money to invest. Diversifying your portfolio to include real estate can be a great way to maximize your investments.

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