Roofstock Review 2024: Invest In Real Estate Remotely (2024)

Roofstock is an investment platform that allows you to invest in single-family rental properties.

Savvy stock market investors know that transaction fees can kill market gains.

Thankfully, technology has brought transaction costs close to zero for most stock market investors. Unfortunately, real estate investors haven’t had the same luck.

Over the course of five years, I’ve purchased three rental properties (and sold one). My average selling cost for each of these was $4,000. Plus, as a buyer I paid hundreds for inspection fees and due diligence fees.

As far as I know, the only company successfully lowering prices for rental real estate investors isRoofstock.com. Roofstock is an online marketplace for tenant-occupied real estate. Looking to become a real estate investor? Here's why you might want to consider looking for properties on Roofstock.

How much does it cost to start looking at these properties? Nothing. If you find a property you like, you can read the full inspection report, talk with an advisor, and mull it over.

When you’re ready, you can buy the house by paying the 0.5% fee using your credit card (that’s right, your credit card). Once you complete your financing (or you wire the cash), the house becomes yours. Sellers get a great deal too, paying just a 3% listing fee.

It’s hard to emphasize just how revolutionary this cost cutting is. Companies like Fundrise and CrowdStreet have made it cheap to gain real estate exposure, but not to directly own individual real assets. Roofstock actually cut the largest barrier to entry forreal estate investors.

Once you close on the home, you start collecting rent right away. This is because you assume the contract from the previous owner. The hardest part of owning real estate is finding great tenants.

If you can buy a place that already has tenants with a track-record of paying in place, it’s like buying a gold mine. Roofstock makes that happen.

Roofstock's "Lease Up Guarantee" provides security for vacant home purchases as well. With this guarantee, Roofstock pledges to cover your rent for up to a year if a lease hasn't been signed on your "rent-ready" home within 45 days. Be sure to check out the details of the guarantee here to get the specifics of what "rent-ready" means.

Another reason to consider Roofstock is its thorough inspections. The inspections cover the actual quality of the house, the estimated repair costs, and the financial figures you need. It’s truly possible to buy a house site unseen through Roofstock.

Of course, you can fly out and view the houses yourself too. I think most people will want to start their roofstock investments in a relatively local market.

Driving a few hours to visit several houses makes sense to me. But some people buy the houses site unseen. The thorough inspections make that a reasonable (if risky) option.

Easier Financing

One of the hardest part about buying single-family rental properties is often finding the financing. But Roofstock has an integrated financing solution for people with qualifying credit and at least 20% down.

If you’re a serious buyer, compare Roofstock’s loan offer to an offer from LendingTree.com to see if you can get a better deal. According to Roofstock, its in-house financing solution allows buyers to close in as little as 30 days. It might not be the absolute best interest rate, but it's amazingly fast.

One of the best things about Roofstock is how open the platform is. You can buy tenant-occupied real estate, with Roofstock partner financing, and use Roofstock’s property manager.

On the other hand, you can find a buyer’s agent, pay for your own inspection, find your own financing, and manage the property yourself.

This is an incredibly important point to consider. If you’ve got a property management system in place, you don’t have to pay for a Roofstock property manager. If you’re a new investor, you may appreciate the hand-holding.

Before you buy, make an independent evaluation if real estate investment is for you. If it is, is just one tool. You should also look for houses in your local market, and study resources at sites like before making the plunge.

Roofstock One is completely different from Roofstock Marketplace. First of all, it's only open to accredited investors. Second of all, it allow investors to invest in portfolios of single-family properties. This is similar to other real estate crowdfunding sites.

Getting started with Roofstock One requires a minimum investment of $5,000. Roofstock handles everything from there, including the management of all the homes that are included in its Roofstock One portfolios. This means it could be a great option for investors who want a more hands-off real estate investing approach or who would like exposure to a broader diversification of properties.

But it's important to note that Roofstock One investments are highly illiquid. Investors are required to have an investment horizon of at least 5 years and there is currently no secondary market for selling Roofstock One shares.

Roofstock Academy

Roofstock recently launched their Roofstock Academy, where you can learn how to master turn key rental properties. This course goes well with actually using their platform for purchasing property.

The Roofstock Academy combines online learning with one-on-one coaching session and access to a private network of other real estate investors.

Check out Roofstock Academy here >>

Yes, there are costs for using the Roofstock Marketplace as well as Roofstock One. Here's how they break down.

Roofstock Marketplace

Buyers pay a marketplace fee of 0.5% or $500 (whichever is greater) and sellers pay a 3% listing fee or $2,500 (which is greater). That means the total commission is much lower than the average commission of real estate agents of around 5%-6%. If you decide to use one of Roofstock's vetted property managers, their fees will vary by region, but the average is about 10% of the monthly rent.

Roofstock One

Roofstock is being curiously quiet about the costs of Roofstock One. In fact, it doesn't mention fees anywhere on the Roofstock One homepage or in the FAQs. From what we've been able to find online, it appears that Roofstock One investors are charged an asset management fee that starts at 0.50% of the home price but will adjust at the same rate as the gross rent changes.

There are few companies out there that can match what Roofstock offers. Yes, there are plenty of real estate crowdfunding sites like Fundrise that will allow you to invest in non-traded REITs, but most don't offer individual property investments.

Doorvest's business model is similar to Roofstock in that it allows you to buy single-families homes outright. But the biggest difference is that the homes that are available on Doorvest won't typically have renters living there and may need renovations.

Once you've chosen your perfect property on the Doorvest platform and made your refundable deposit, Doorvest will buy the home on your behalf, renovate it, and find a tenant. Then after all of those steps have been completed, you'll close on the home at the Fair Market Value and begin earning passive income. Doorvest does not offer any REIT investments.

Realty Mogul is similar to Roofstock in that it allows investors to invest in both individual properties and REITs. But while Roofstock's platform focuses on single-family homes, all of Realty Mogul's offerings are commercial properties. Here's a closer look at how Roofstock compares:

You can start browsing properties on Roofstock anonymously. But if you try to click on any specific home to see more pictures and financial details, you'll be asked to create an account.

Thankfully, that's easy to do. You can choose to login instantly with your Facebook or Google account. Or you can create a separate account by providing your name, phone number, email address, and a password.

Why Should You Trust Us?

I have been writing about and reviewing investment firms andcovering real estate investmentsfor 10 years. I have personally owned single family, multi-family, real estate syndications, private partnerships, and more. I'm well versed in both the investment aspect and tax aspect of these products and services.

Furthermore, we have our compliance team that regularly checks and updates the facts on our reviews.

Who Is This For And Is It Worth It?

In my opinion, Roofstock is the low cost brokerage of the real-estate investing world. I expect that copycat competitors may soon hit the market.

If you're curious about how the market works, check out our interview with Roofstock on turnkey real estate investing.

At that point, we will have to weigh the costs and benefits of various features. But right now, Roofstock is in a league of its own. Check out the houses. It’s free to browse.

Here are the answers to a few of the most common questions that people ask about Roofstock:

Who is the CEO of Roofstock?

The CEO of Roofstock is Gary Beasley, one of the company's co-founders.

Is Roofstock publicly-traded?

No, it's a private company and Roofstock One is a private placement REIT.

Can you buy newly-built homes on Roofstock?

Yes, newly-constructed Lennar homes in select regions can be purchased on the platform.

Does Roofstock have an app?

There's no mobile app for the Roofstock Marketplace. But if you've already purchased a rental property on the platform, you can track its financials using the Roofsavvy iOS app.