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Technology has changed real estate investing, too
BRANDON KLEIN
Special to the Legal News
Published: November 12, 2019
Financial technology startups are changing the landscape of the industry and real estate investments are no exception.
Among the notable fintechs is Oakland, Calif.-based Roofstock that offers a platform to invest in single-family rental properties.
Since the company launched in early 2016, the startup now has eclipsed more than $1.6 billion in transaction volume.
"Created by investors for investors, Roofstock provides research, analytics, and insights to evaluate and purchase independently certified properties," the company stated on its website. "The Roofstock marketplace delivers new levels of transparency and efficiency to create a better way to transact. Buyers access vetted homes with attractive investment profiles and cash flow potential. Sellers market homes without lost income or disrupting tenants. It's win-win all around."
A 31-year-old millennial recently told Curbed, an online news website, how he's purchased several different properties through the Roofstock despite renting in a coastal city.
"It's very video game-like, like buying stock," Michael Pickens of Campbell, Calif., told Curbed. "I'm physically buying these buildings, and managing property from afar."
Curbed reported how Pickens purchased a $129,000 property in Memphis, Tenn., putting 20 percent down. After he pays taxes, the mortgage and the fees to a Roofstock-recommended property manager, Pickens earns $200 a month on the property.
"I've never been to the places where our investments are," Pickens told Curbed. "I know nothing about these towns or cities."
In August, Roofstock announced it placed on Forbes magazine's top 50 fintech list.
"We're constantly innovating and iterating our technology behind the scenes to continue transforming the real estate investment landscape and to find new ways to make real estate radically accessible," said Gary Beasley, Roofstock CEO and co-founder.
Roofstock is backed by investors such as Khosla Ventures, Lightspeed Venture Partners, Bain Capital Ventures and Canvas Ventures.
"Roofstock has created a platform that makes it easy for investors of all types to get exposure to real estate. Increasingly recognized as a leader in the emerging proptech sector, Roofstock has opened new avenues for individuals to build wealth that previously required institutional-scale capital. These awards are a small testament to the industry-wide transformation Roofstock has kicked off in real estate," said Paul Hsiao, general partner at Canvas Ventures, in a statement.
Roofstock now operates in markets located across nearly 20 states, including Ohio.
In July, the company announced investors on its marketplace increased by 126 percent in 2018. It said properties sell much faster than the industry standard as properties sold in 15 days or less in the first quarter of this year.
Additionally, 75 percent of Roofstock users are first-time real estate investors and a third of the users looking to invest $100,000 on the marketplace.
"We built Roofstock to democratize real estate investing and that will always remain the core pillar of our mission. Real estate can be a powerful avenue to build wealth, but the asset class is still not a mainstream choice for the everyday investor. Roofstock is leveling the playing field for investors, minimizing the hassles of traditional real estate ownership, and driving greater accessibility," Beasley stated.
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