Author Topic: Roofstock  (Read 4992 times)

rawraw

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Roofstock
« on: August 06, 2017, 11:28:58 AM »
Just heard about Roofstock, a website trying to make it easy to buy and manage single family rentals across the country. Anyone looked into it?

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EmilyFoxSeaton

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Re: Roofstock
« Reply #1 on: August 06, 2017, 01:41:11 PM »
Just heard about Roofstock, a website trying to make it easy to buy and manage single family rentals across the country. Anyone looked into it?

I did. Unless I am missing something it sounds insane. I heard once this was backed by Bain Capital (Romney) so it seems the only reason anyone would do it. But literally you purchase a home over the internet with a renter there already. Oh yeh that doesn't sound like a recipe for disaster. Not to mention you would't be familiar with the laws in the jurisdiction.

I tried and I tried but couldn't see that this would be a very costly mistake if it went wrong.

Anyone else see something different than me?

Is there some reason we can't get a sight where we can invest in a rental property and get fractional ownership and share of the rent each month? Such as say the P to P company buys the property and owns it and takes 10% of the rent and any profit on selling the home, but the internet people provide the funds to buy the property in exchange for a share of the rent.

rawraw

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Re: Roofstock
« Reply #2 on: August 06, 2017, 01:56:55 PM »
Just heard about Roofstock, a website trying to make it easy to buy and manage single family rentals across the country. Anyone looked into it?

I did. Unless I am missing something it sounds insane. I heard once this was backed by Bain Capital (Romney) so it seems the only reason anyone would do it. But literally you purchase a home over the internet with a renter there already. Oh yeh that doesn't sound like a recipe for disaster. Not to mention you would't be familiar with the laws in the jurisdiction.

I tried and I tried but couldn't see that this would be a very costly mistake if it went wrong.

Anyone else see something different than me?

Is there some reason we can't get a sight where we can invest in a rental property and get fractional ownership and share of the rent each month? Such as say the P to P company buys the property and owns it and takes 10% of the rent and any profit on selling the home, but the internet people provide the funds to buy the property in exchange for a share of the rent.
Over 90% of the people use one of the property management companies through the website.

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« Last Edit: August 06, 2017, 02:04:37 PM by rawraw »

jz451

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Re: Roofstock
« Reply #3 on: August 06, 2017, 02:17:21 PM »
I looked into it when I saw it on TV. It's basically a marketplace to buy/sell rental proeprties. It's not worth it since most of the properties are trash. You're better off looking on the MLS the traditional way and hiring a proeprty management company.

EmilyFoxSeaton

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Re: Roofstock
« Reply #4 on: August 06, 2017, 02:25:20 PM »
Over 90% of the people use one of the property management companies through the website.


I just don't know why you would do that. You could just do that locally - right? I don't see what Roofstock brings to it?

jz451

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Re: Roofstock
« Reply #5 on: August 06, 2017, 02:39:17 PM »
Over 90% of the people use one of the property management companies through the website.


I just don't know why you would do that. You could just do that locally - right? I don't see what Roofstock brings to it?

It's for people looking to invest out of state. Roofstock is headquartered in Oakland, CA so naturally it's difficult to invest in the Bay Area let alone elsewhere in California. Renting out a house in expensive areas is impossible unless the house is paid in all cash.

rawraw

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Re: Roofstock
« Reply #6 on: August 06, 2017, 02:39:31 PM »
Over 90% of the people use one of the property management companies through the website.


I just don't know why you would do that. You could just do that locally - right? I don't see what Roofstock brings to it?
Their pitch is it allows geographic diversity to an asset class that used to be local. And then those properties managers use the website so you can manage multiple properties across the country in one place. And they claim to offer lower total fees for the transaction

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EmilyFoxSeaton

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Re: Roofstock
« Reply #7 on: August 06, 2017, 04:26:54 PM »
Their pitch is it allows geographic diversity to an asset class that used to be local. And then those properties managers use the website so you can manage multiple properties across the country in one place. And they claim to offer lower total fees for the transaction

I just don't see it. Who desires the geographic diversity of North Carolina or Florida?  If they offered like high end condos in high rent areas -- that probably would need minimum upkeep, maybe that would be worth it.  I can just see lots of maintenance issues in low end Florida and not the best tenants ever.

I also just inherently do not trust "property managers" that I can't keep an eye on. Your putting your entire investment in stranger's hands and as far as i know.. Roofstock offers zero protection the day the sale closes. They are, conveniently, just a way to match people up.

rawraw

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Re: Roofstock
« Reply #8 on: August 06, 2017, 04:28:44 PM »
They are a young platform. I'm sure they'd love to offer that but they have to convince people to use them.  I saw properties ranging from 50k to 1 million

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jz451

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Re: Roofstock
« Reply #9 on: August 06, 2017, 05:46:33 PM »
From what you have been saying it sounds like you would not like real estate investing. You have to treat it like a business and not like a mutual fund or ETF where you set it and forget it. It involves a lot of work that some people don't want to do, which is fine, might not be your cup of tea. The properties on Roofstock are meant to generate cash flow just like LC and not increase value through appreciation. Properties listed are going to be cheaper than in higher value areas like on the west coast, and typically older and may or may not need some TLC. But as you probably saw there are people who buy the proeprties listed on Roofstock.



I just don't see it. Who desires the geographic diversity of North Carolina or Florida?  If they offered like high end condos in high rent areas -- that probably would need minimum upkeep, maybe that would be worth it.  I can just see lots of maintenance issues in low end Florida and not the best tenants ever.

I also just inherently do not trust "property managers" that I can't keep an eye on. Your putting your entire investment in stranger's hands and as far as i know.. Roofstock offers zero protection the day the sale closes. They are, conveniently, just a way to match people up.

nonattender

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Re: Roofstock
« Reply #10 on: August 06, 2017, 08:41:08 PM »
INVH - problem solved.  MAA - or the other one, Avalon Bay? - if you want apartments.

Reg FD:  Owned by me.
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EmilyFoxSeaton

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Re: Roofstock
« Reply #11 on: August 07, 2017, 06:41:56 PM »
The properties on Roofstock are meant to generate cash flow just like LC and not increase value through appreciation. Properties listed are going to be cheaper than in higher value areas like on the west coast, and typically older and may or may not need some TLC. But as you probably saw there are people who buy the proeprties listed on Roofstock.

It just seems like a ton of risk to basically buy a home over the internet with renters you don't know and a home you don't know what is wrong with and then roll it all up and hand it over to a property manager and *hope* everyone is on the up and up.  In comparison to a REIT... seems like poor way to make money off real estate.

jheizer

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Re: Roofstock
« Reply #12 on: August 07, 2017, 10:32:09 PM »
I too have some MAA and AVB. Seems a whole lot easier than owning property.
Replacement to P2P Quant's Percentile Tool http://lc.geekminute.com

EmilyFoxSeaton

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Re: Roofstock
« Reply #13 on: August 10, 2017, 08:35:17 AM »
I too have some MAA and AVB. Seems a whole lot easier than owning property.

I think it is.  When I was a landlord I cleared about $450 per month. But the money sunk into that investment was 100K.  You can match that with a good dividend REIT. The tax treatment might be different but it is worth it for the lack of hassle.

rawraw

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Re: Roofstock
« Reply #14 on: August 10, 2017, 10:19:28 AM »
I too have some MAA and AVB. Seems a whole lot easier than owning property.

I think it is.  When I was a landlord I cleared about $450 per month. But the money sunk into that investment was 100K.  You can match that with a good dividend REIT. The tax treatment might be different but it is worth it for the lack of hassle.
Another huge difference is leverage. That can make meaningfully difference, both good and bad.

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