Roofstock

[Andrew Stodola]

Hello BiggerPockets Community,

I have been researching, and would like to start investing in rental properties. I have decided to start by using a property management company. I am wondering what anyone thinks using Roofstock. I would also like to hear recommendations for any other property management companies. I am located in Northeast Wisconsin.

P.S. This would be my very first rental property.

[Cj Powderhorn]

Roofstock has some great opportunities. However, it is not a TK site. It is a 'marketplace'. That is an important distinction.  I shared the following with another 'new investor and TK post'

I believe once you ask all of your questions and feel like you have valid answers you should take a step back and decide if you are willing to trust the operator.

True TK operators like Chris Clothier above will (usually) price homes fairly based on what they have put into the property. I assume that they will make more on some properties and less on others. However, their goal, especially now, seems to be multiple properties for each investor, investor satisfaction and referrals. They have a vested interest in helping you achieve your goals unlike some other arenas based on commission only.

Make sure that the price reflects what the rent actually is - not projected! I mention 'is' because many reputable TK companies will not sell the home until there is a renter in it. Some companies, will offer a 3-6 month 'rental compensation' if the home isn't rented. Is this a good deal? In my opinion, no because you don't really know what the true rent will be, the home will probably sit vacant and there is no way to see how your chosen PM will do. Plus, WHY buy that home instead of one that is rented (other factors being comparable). Sometimes you can find a better deal on these sites but if you are OOS, you will need a solid team from day 1.

Many of these 'Marketplace' vendors have entered the TK arena(if you are unsure of these companies, just search the forums). They are not TK operators. To me, there is the 'holy trinity' of True Turnkey all under one umbrella - 1. The TK company actually has possession of the home and it's OWN rehab/mx crew has rehabbed the home and a renter is in it with a signed contract and actual monthly payment 2. The PM is under the same umbrella and you agree with their policies as a landlord, as well as how they find/vet/treat tenants and 3. The same people who rehabbed the home will provide ongoing repairs and mx (within reason). These are all important as is the exhaustive list of questions that Chris provided above. For example, the TK company I have used in Memphis does not charge an application fee to potential tenants, rents the properties for slightly below market value, and is understanding (both pre-covid and now) if tenants have an issue paying the rent. This model has worked very well, for me as I have had my renters in my homes for between 5 and 8 years, and have been lucky to continue to collect rents thru the summer.

One thing that I believe new investors seem to miss about the TK system is if you have received solid answers and a few good references (especially from investors with multiple properties) you either trust them or you don't. You agree with their pricing, once you run your own numbers or you look for something else. I am not sure how much I have saved from having very limited turnover but I know it is more than the few thousand dollars I may have saved by going with a 'cheaper' home by a provider who doesn't get the big picture.

Finally, ask ask and ask away while you are interviewing a TK company, but once you have made a decision, let them do the job you are paying them a premium to do! If you want to pick flooring, paint colors, landscaping, be involved with vetting tenants and changing contracts, setting rent, etc--you should do it yourself! You are paying for THEIR expertise in how to rehab the home for the area, how much to charge and THEIR experience in picking tenants. If you really want to be involved in everything, you probably should consider something other than TK. I have not ever been inside ANY of the multiple homes I have purchased thru the TK provider I choose to work with.

I'm just an investor but I am surprised by the time and patience many of the TK providers show on this site. They are really trying to educate us about the process and we can support them by listening and understanding what their role is as compared to some of the more recent options. Neither option is good or bad but as a new investor you may want to decide ahead of time just how passive you want to be. Good luck :)