As highly requested, here are my thoughts on Roofstock’s Turnkey Real Estate Investing, and some of the advantages and disadvantages through investing with them - enjoy! Add me on Snapchat/Instagram: GPStephan
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For those that aren’t aware, RoofStock is a pretty cool concept. It’s a website that analyzes single family properties positioned as rentals. The advantage for buyers is that they can access homes with renters already in them, allowing them to buy a property with immediate, predictable cashflow. The advantage to the seller is that you can sell your property with the tenant already living in the house, thereby not losing out on any rental income during the selling process.
From the BUYER perspective of things, I have to say, I really, really, like the layout a lot. The ability to go online and play with the numbers and instantly see how they affect your cash flow is awesome. Roofstock also has a “30-day money back guarantee,” where Roofstock will buy back the property if you’re unsatisfied with the purchase.
Even though the process seems very streamlined, one of the biggest flaws I see if that it doesn’t appear like you can do your own inspections on the property. They have their own certification process and they will provide you with their own inspection reports and due diligence for you to review.
My second concern is that these properties don’t seem like they’re really in prime locations. Now prime location is certainly subjective depending on who’s looking at it, but from the way I see it, these are mainly cash flowing properties.
The third downside I see with this is that there’s not really any room for improvement. I understand that this isn’t Roofstock’s target audience, and they’re going after the laid back investor who just buys and sits back…nothing wrong with that…but a buyer could get MUCH more value by buying a property, remodeling it, and renting it out themselves for a higher price than buying something turn key.
Some seller issues I could see:
Not having a sign out front of your house. Having a sign out front makes people aware that there’s a home being sold. The more exposure a home gets, the better.
Second downside…the property isn’t listed on the MLS. Again, exposure gets homes to sell at higher prices. And by not listing on the MLS, they’re excluding a LOT of buyers from even seeing that home to begin with.
Third downside, because you’re selling the home occupied with a tenant, your buyer pool is very, very small. You’re immediately excluding all the families that might want to buy that home just to live in, themselves.
So given that, honestly, I don’t really see it being a bad service. I’m pretty neutral about it. For buyers, it would be nice to do your own inspections and due diligence…and also to get the best bang for the buck, it’s definitely worth it to do the work yourself…but I get that not everyone has the time or interest in doing that, and if they’re okay paying a premium for turnkey properties, nothing wrong with that. I’m not a fan of the areas they have listed, they all seem too remote for me…which carries its own risk in desirability and the ability to re-rent the home, but that’s all subjective. It’s really, really important for a buyer to do their research into how easy the home will be to re-rent during a vacancy, and how well the areas are poised to grow…if any.
For sellers, I suppose if you want an easy, hassle free, streamlined process for sale…it seems decent. But, I also believe that you’re leaving money on the table by ONLY appealing to investors, NOT listing on the MLS, and NOT allowing for private showings. But like I said…overall, it seems decent. I like their guarantee. I like their calculators. Would I personally use it? I really doubt it. Do I think it’s a decent place to start? It can be.
For business inquiries or paid one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness @gmail.com
Suggested reading:
The Millionaire Real Estate Agent: http://goo.gl/TPTSVC
Your money or your life: https://goo.gl/fmlaJR
The Millionaire Real Estate Investor: https://goo.gl/sV9xtl
How to Win Friends and Influence People: https://goo.gl/1f3Meq
Think and grow rich: https://goo.gl/SSKlyu
Awaken the giant within: https://goo.gl/niIAEI
The Book on Rental Property Investing: https://goo.gl/qtJqFq
Favorite Credit Cards:
Chase Sapphire Reserve - https://goo.gl/sT68EC
American Express Platinum - https://goo.gl/C9n4e3
Join the private Real Estate Facebook Group:
https://www.facebook.com/groups/therealestatemillionairemastermind/
Get $50 OFF + FREE Coaching Call FOR A LIMITED TIME: Code THANKYOU50 - The Real Estate Agent Academy: Learn how to start and grow your career as a Real Estate Agent to a Six-Figure Income, how to best build your network of clients, expand into luxury markets, and the exact steps I’ve used to grow my business from $0 to over $120 million in sales: https://goo.gl/UFpi4c
For those that aren’t aware, RoofStock is a pretty cool concept. It’s a website that analyzes single family properties positioned as rentals. The advantage for buyers is that they can access homes with renters already in them, allowing them to buy a property with immediate, predictable cashflow. The advantage to the seller is that you can sell your property with the tenant already living in the house, thereby not losing out on any rental income during the selling process.
From the BUYER perspective of things, I have to say, I really, really, like the layout a lot. The ability to go online and play with the numbers and instantly see how they affect your cash flow is awesome. Roofstock also has a “30-day money back guarantee,” where Roofstock will buy back the property if you’re unsatisfied with the purchase.
Even though the process seems very streamlined, one of the biggest flaws I see if that it doesn’t appear like you can do your own inspections on the property. They have their own certification process and they will provide you with their own inspection reports and due diligence for you to review.
My second concern is that these properties don’t seem like they’re really in prime locations. Now prime location is certainly subjective depending on who’s looking at it, but from the way I see it, these are mainly cash flowing properties.
The third downside I see with this is that there’s not really any room for improvement. I understand that this isn’t Roofstock’s target audience, and they’re going after the laid back investor who just buys and sits back…nothing wrong with that…but a buyer could get MUCH more value by buying a property, remodeling it, and renting it out themselves for a higher price than buying something turn key.
Some seller issues I could see:
Not having a sign out front of your house. Having a sign out front makes people aware that there’s a home being sold. The more exposure a home gets, the better.
Second downside…the property isn’t listed on the MLS. Again, exposure gets homes to sell at higher prices. And by not listing on the MLS, they’re excluding a LOT of buyers from even seeing that home to begin with.
Third downside, because you’re selling the home occupied with a tenant, your buyer pool is very, very small. You’re immediately excluding all the families that might want to buy that home just to live in, themselves.
So given that, honestly, I don’t really see it being a bad service. I’m pretty neutral about it. For buyers, it would be nice to do your own inspections and due diligence…and also to get the best bang for the buck, it’s definitely worth it to do the work yourself…but I get that not everyone has the time or interest in doing that, and if they’re okay paying a premium for turnkey properties, nothing wrong with that. I’m not a fan of the areas they have listed, they all seem too remote for me…which carries its own risk in desirability and the ability to re-rent the home, but that’s all subjective. It’s really, really important for a buyer to do their research into how easy the home will be to re-rent during a vacancy, and how well the areas are poised to grow…if any.
For sellers, I suppose if you want an easy, hassle free, streamlined process for sale…it seems decent. But, I also believe that you’re leaving money on the table by ONLY appealing to investors, NOT listing on the MLS, and NOT allowing for private showings. But like I said…overall, it seems decent. I like their guarantee. I like their calculators. Would I personally use it? I really doubt it. Do I think it’s a decent place to start? It can be.
For business inquiries or paid one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness @gmail.com
Suggested reading:
The Millionaire Real Estate Agent: http://goo.gl/TPTSVC
Your money or your life: https://goo.gl/fmlaJR
The Millionaire Real Estate Investor: https://goo.gl/sV9xtl
How to Win Friends and Influence People: https://goo.gl/1f3Meq
Think and grow rich: https://goo.gl/SSKlyu
Awaken the giant within: https://goo.gl/niIAEI
The Book on Rental Property Investing: https://goo.gl/qtJqFq
Favorite Credit Cards:
Chase Sapphire Reserve - https://goo.gl/sT68EC
American Express Platinum - https://goo.gl/C9n4e3
one way to "game" RoofStock by sellers is to have a friend pay an inflated rent (say 50% beyond fair rent) to jack up the sale price. Then the friend leaves shortly after sale.
Review New Western Next!!!!
a lot of qualifiers!
I've worked in residential leasing for 3.5 years now, and although I haven't heard complaints that for sale signs can lower adjacent/surrounding housing values, I do know there can be a stigma towards neighbors that are renting vs owning, so this seems like a nice service to the current tenant and their privacy as long as the company is able to drive sufficient traffic. There could also be verbiage in the tenant agreement relating to marketing during locked in lease terms that this policy is looking to accommodate.
I'm going to do it
Excellent content!
I have that same H&M shirt 😂
Having a sale sign in my area is not a good idea and is often advised against doing so. Squatting and copper thieves
Thanks for the analysis. I just found the website a couple of days ago and you saved me hours of research. You certainly earned a like.
How long is seller contract for? (Sorry if I missed this.)
Would love to hear your review of mwmfund and paperstac
Thank you, I appreciate your thoughtful review! I might give them a try and use your advice in tandem.
As far as inspections go, if the house is currently being lived in, it should be safe to assume that there is nothing immediately wrong with the house. Besides, if something does develop, you're getting the rent already to get it repaired in that first year. Another thing about someone currently living in it, that means it's in a good enough location that they were able to get someone to rent it already.
If your not contractually locked to roofstock they can go around roofstock. Be my guess why they don't want yard signage!
~1% deals for a D class property??? No thanks.
Thank you Graham!
Thanks for the detailed breakdown, Graham!
I thought your Cartman imitation was very good
Purchased a property through Roofstock a year ago, I question their “certification” process. The property I purchased said it needed “minimal repairs,” minimal being under $500, which greatly influenced my decision to purchase, a month after closing I was at $5000 in “make ready” costs.
Went to roofstock in an attempt to take advantage of the 30 day money back, and really felt like I was being taken for a slow walk around the park (I was S.O.L.)!!
I like the idea of Roofstock, but some of their numbers are WAAAY too optimistic, as others have stated.
As a first time RE investor, this purchase through Roofstock kind of killed that drive and motivation!! I’m starting to think REI is harder than it seems, and possibly even, not for me! 😪
Gooooood 🤑🤑
Thank you Graham for making a video about this. I have been wanting to get into real estate investing. I have no experience though and I would prefer a more hands-off approach. Your honest review goes to show your knowledge and care of everything you talk about and I appreciate you!
The Cyprus Hill song was the funniest thing Graham has ever done!! 🤣
Thank you for he review graham. When I’m a financially stable adult imma try this
I would imagine that a 4 sale sign might scare the tenant. Possibly making them leave. I imagine people are willing to pay more if there a tenant in it currently
Why do I need to do an inspection if it's already tenant occupied?
Graham you did this video 2 years ago. What do you think now or maybe you did another video. I’ll look
Been wondering about Roofstock for the longest. Glad to run into this video.
Graham, I'm looking to try my life in the real estate market. I have never "done a deal" or closed on a home for investment purposes. Are you able to assist. Better yet do you have any videos on the steps?
Pretty good cartman impression. Im an LO and have someone trying to get an investment property. I smell fish, just started watching the video.
So basically this app skips going to a turnkey company and paying them to find turnkey properties for you and structure the deal when you can go rite in
Awesome info! 👍
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