- Well hey there, how's it going?
This is Seth from RETipster.com
and for a couple years now I've been hearing about
this company called Roofstock
and just a couple weeks ago
I had a chance to talk with a couple of the team members
of Roofstock, and learn a little bit more
about what their company's all about,
how the website works,
what it has to offer to the world of real estate investors.
And so once I got more familiar
with what these guys are all about
I thought it might be a relevant thing
just to mention to the R.E. Tipster audience.
So, basically what Roofstock is
is they assist Real Estate Investors
in finding and purchasing turn-key rental properties,
and essentially what that means is
you can buy a rental property,
in most cases there's already gonna be a tenant in place,
for the most part there shouldn't be any,
like massive, immediate expenses that you have to pay for,
all the properties are gonna be at least
in livable condition.
There may be some odds and ins that you have to take care of
but its not like a huge rehab required in order to
get this thing marketable.
Essentially that's what Roofstock does,
in a number of key markets around the country.
If we go to the website, click on learn,
click on markets, we can see a map that outlines
really where all the key markets are
that they're currently active.
And if we zoom in here a little bit
we can kind of see the different cities
where they have a lot of properties available
And in my conversations with these guys,
one of the things that I was wondering about
is, like, where does this inventory come from?
Like what kinds of people
are selling their properties on your website?
And they were telling me that a lot of
the sellers that list their properties
on this website are like institutional sellers,
so like, a company that might own like
a big portfolio of rental properties
or individual sellers who, just kinda,
wanna be done with it quick and not go through
all the gyrations of listing themselves with a realtor.
The benefit that Roofstock brings to the table
for the seller anyway
is that they charge them a 2 1/2% commission
when the deal closes,
as opposed to like, a 6% commission
if they were just working with a normal real estate agent.
They also charge a fee of, I believe its a half percent,
to the buyer.
Both parties have to pay something
when they come to the table,
but given how much it is and
the value that Roofstock brings to the table,
its pretty much worth it,
as long as they can actually deliver good, solid deals
for both parties.
So, something that's unique about Roofstock
is that when they sell you a property
most of the time the property is gonna have
a tenant in it already.
So its not like, this empty house,
and you gotta figure out how to fill it up.
There's usually gonna be somebody there,
and I can actually tell you from experience
every time I have inherited a tenant,
it was actually a bad thing,
like the whole reason I was getting a great deal
on the property was because there was a bad tenant in there
and the property owner or the landlord
didn't know how to get rid of them,
or how to handle the problem, and that was part of why
I was able to buy it for as cheap as I did.
So, simply having a tenant in place
is not necessarily, like any kind of a guarantee of success.
And I think Roofstock understands that
and that's part of why you'll get
really really detailed reports showing all of the issues
that are outstanding with the property itself,
in terms of like, it's physical condition
and any immediate maintenance items that need attention.
And you'll get a lot of helpful information
on the tenant that's in place.
So if you do have a tenant
that is most likely gonna be a problem
you can at least be aware of that before you go into it,
and you can sort of formulate a game plan.
Roofstock actually offers
a couple really really impressive guarantees
with all the properties that they sell.
First of all, buyers have a 30 day money-back guarantee
if they're not satisfied with their purchase
for any reason.
Roofstock will also pay market rent to the owner
minus any property management fees
for any properties that they sell as vacant
until the property manager
can find a tenant to get in there.
Its important to note that
that particular guarantee only applies
if you as the owner are using
one of the Roofstock certified property managers.
So, you do have to adhere to that requirement
in order for that to work out,
but if you do, and frankly I'm not sure why you wouldn't,
the bottom line is that, you know, one way or another
you should be collecting payments for your property
almost immediately after buying it.
I can tell you, in the real estate investing business,
guarantees are pretty much unheard of,
so I just thought it was really cool that Roofstock
is actually, you know, coming to the table
with this kind of assurance
to help people get comfortable
with the properties that they're buying
through their platform.
And something else that they can do
is actually match you up with a local property manager.
Apparently they go through and they vet
a lot of different property managers in the area
and they find the best ones
and then recommend those to you.
And from what they were telling me
they have no financial affiliation
with these property managers at all,
so like, they're not recommending them to you
because they're getting paid to,
they're doing it because that's who they've found
to be the best in the area based on their research.
So that's another very helpful and important thing
just to be aware of if you decide to work with these guys,
and if you decide to hire a property manager
rather than just managing it yourself.
So just to show you around the site a little bit.
If we go here and you click on see our properties,
by the way I'm gonna an affiliate link to this website
beneath this video in case you wanna check that out.
Its RETipster.com/roofstock will brin you right there.
From what I've saw on their website,
it looks like the vast majority of these properties
are priced somewhere between like,
$75 to $150,000.
Sometimes you'll see some outliers that are
a little bit above or lower than that,
but like, probably 90% of their properties
are right in that price range,
which I think actually makes this a pretty ideal service.
Say, if you live in like, a coastal area of the U.S.,
where property values are just like, nuts,
and its really really hard to go out and
buy your first single-family rental house
because its like, a million bucks or something like that,
if you still wanna get in the game
but you don't necessarily have millions to work with
a website like Roofstock will basically just give you
turnkey access to a lot of properties
that are much much more affordable, so to speak.
Or at least not as ridiculously expensive
as they would be in a city like San Diego
or San Francisco or Washington, D.C.
or New York City, that kind of thing.
So one of the really nice things about Roofstock
is that they give you a ton of information
about every single property.
Keep in mind, I haven't even created an account yet,
and I can see all this information
and all you gotta do is just click on any one of these
that sounds interesting and you can see tons
and tons of really really helpful data.
You can see pictures of the property, obviously.
You can take a 3D tour of the property
through this, kind of a video they have,
which looks like its some kind of a
computer generated thing which is king of interesting.
I don't think I've ever seen that before.
You can see a 3D model of the property,
you can see the curb view obviously,
just from Google street view.
And more importantly, you can see all of the details
you'd ever wanna know
with regard to the financial analysis side of things,
like the initial investment required
and what the annual cash flow is gonna be,
what the cash on cash return and
the cap rate is projected to be,
and in terms of the returns.
I can tell you that like, every rental property
I've ever bought has actually performed
way way way better than this,
so like, these numbers aren't like, amazing necessarily.
And I think part of that is a reflection
of the market we're currently in
where real estate prices are just
really really high right now.
So I'm not gonna say that these are like,
the best deals you're ever gonna find,
but if you're looking for more of a easy button
so you don't have to go searching high and low
for the best opportunities,
and you don't wanna mess with all the haggling
and all of the back and forth negotiation
and going on some wild goose chase
trying desperately to find the one deal
that actually makes sense in your market,
a website like Roofstock will really just give you
a lot of these pre-packaged properties
that have some kind of cash flow.
So its probably not gonna put you in the red,
and if you wanna start diversifying your investment dollars
and maybe putting some money into something like real estate
where you can actually get some tax benefits
and that kinda thing,
then this could be a really really helpful site
to check out.
And I'll also say, apparently I haven't looked
into this too much, but you can buy,
like entire portfolios of properties.
Let's say if you've got, like, millions of dollars
to work with then, then you can buy, like,
huge bundles of properties together
and they've got a lot of information on that as well.
I personally have not bought any properties
through Roofstock yet, so I can't tell you, like,
my firsthand experience.
I really wish I could.
But I was actually really curious
to find other people out there who have used them
and what their experience was like.
I actually did find a few reviews on there.
One was on Bigger Pockets, one was on Reddit,
and I don't know that this is any, like,
conclusive indication of what you can expect, but
I can tell you that I did not find a single negative comment
or review about these guys anywhere that I looked.
So, that's not to say that could never happen,
but so far, when it comes to the people who are
you know, publicly vocal about their experience,
everybody seems to see the value in what Roofstock is doing.
And they seem to have a pretty good track record so far.
So that was another thing that got me comfortable
with, you know, talking more about this on the blog.
So I just wanna put this together
if that's the kinda thing you're looking for.
Say if you have the extra cash laying around
or you just wanna add more rental properties
to your portfolio,
and you wanna do it in like a turnkey fashion,
so there's actually, like, a good property manager in place
and you can even get help with connections
on the financing end as well.
I think they do at least a little bit of that
in terms of helping people find lenders out there
if you don't already have one.
Then, you know, I think Roofstock
is definitely one to keep an eye on
and to check out if you want to learn a little bit more
about how that all works.
Again, I do have an affiliate relationship with these guys
and that is not why I'm choosing to talk about them.
I only talk about, you know,
companies that I think are legit and
have a lot of value to bring to the table.
But I also wanna be, just up front about that.
That is a thing that I have with them.
I get a small commission
for referrals that I send their way.
And, yeah, I hope its helpful to some of you out there
who are looking for rental properties.
If you've sort of run out of options
in the market where you're at,
these guys could be another great avenue to explore.
So, hope that helps.
Wish you guys all the best, and I'll talk to you soon.