InvestmentsReal Estate

SFR All-Stars: Roofstock provides a curated marketplace for buying and selling leased homes

Tech-enabled platform lets investors diversify

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THE COMPANY

Roofstock is a free, curated marketplace for buying and selling leased single-family rental homes. Roofstock centers on leased properties, allowing buyers to benefit from cash flow from day one. Sellers earn income through closing and will not need to displace current tenants and renovate property to make it ready to sell to owner occupants, thus being able to sell for a fraction of the cost.

Traditional transactions for single-family rentals are time consuming and costly. Selling a property can cost more than 10% in expenses, commissions and lost revenue. Roofstock allows sellers to earn rent from current tenants through closing and has a fee of just 2.5%, resulting in substantial savings for sellers. Properties on Roofstock’s marketplace are simultaneously marketed worldwide to institutional as well as individual retail buyers. 

Beasley1“Our internal mantra is ‘TLC’: radically increase transparency, dramatically improve liquidity, and provide significantly more control for investors.  We use these principals to guide us as we build our marketplace with our clients in mind,” said co-founder and CEO Gary Beasley. 

Roofstock’s tech-enabled platform allows investors to diversify their portfolios without worrying about daily management responsibilities. Investors may manage properties themselves or use one of Roofstock’s vetted third-party property managers, who pass a thorough diligence process before becoming certified. 

Roofstock’s focus on transparency with its unique up-front diligence approach means buyers can relax and be confident in the properties they purchase. The rental homes on Roofstock’s site are certified, passing a rigorous inspection process that includes a preliminary title search, on-site property inspection, a review of lease terms and payment, and valuation.

The certification process provides analytics based on actual rent, rather than estimated rent, since Roofstock’s focus is homes with tenants in place.roofstock logo

“We are turning the real estate process on its head by creating a process where diligence is completed before hitting the ‘buy’ button, reducing surprises and uncertainty for both buyers and sellers. By providing all the information online, investors are able to purchase properties through Roofstock that are across the country just as easily as if they were around the corner,” Beasley said. 

Homes in Roofstock’s marketplace can all be purchased at their listing prices. Some listings include the ability to make an offer, which will be considered by the seller. Roofstock works with sellers to determine fair listing prices, considering local market conditions, market rent, and property condition after inspection, and sharing the savings from the low cost of selling on the Roofstock Platform with buyers. Roofstock has expanded to a dozen markets, with more markets slated to open this year.

Roofstock’s founding team brings together Silicon Valley talent with several early pioneers of the SFR industry. “We work collaboratively and we get things done,” Beasley said. “Everyone is part of the team, collaborating and building something special from the ground up.”

Where do you see technology in the industry moving next?

"Given the emergence of increasingly better data and automated transaction processing, as well as improvements in virtual reality, I believe you will see more and more purchasing of property sight unseen, like we are facilitating on Roofstock.  Also, as processes become increasingly paperless, transactions should happen faster and faster and client satisfaction should improve as a result.  Technologies like blockchain have the potential to revolutionize transaction processing.”

 

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