Roofstock review. NEWBIES BEWARE!!

[JC Wu]

Looks like most of the reviews or case studies on Roofstock are about the closing process. I suppose since the vast majority of investors who’ve purchased properties from Roofstock use the properties as buy-and-hold rentals and Roofstock is a start-up that hasn’t been around for long, not a whole lot of investors have sold those properties. I got burnt on my way out when I tried to sell one acquired through Roofstock, which I’ve only kept for ~1.5 years. I wasted a lot of time and lost over 30K from this property. The only thing I gained is increased cancer risks from all that stress.

The short version of what happened:

A local flipper I befriended pointed out a serious undisclosed permitting issue he discovered from public record, which compelled me to sell the property at a discounted price to a local wholesaler instead of keeping it as a rental or selling on the MLS. The Roofstock inspection report made no mention of this issue. I have strong reasons to believe the seller chose not to disclose intentionally.

Due to the way the Roofstock purchase and sale agreement was drafted and certain provisions in Roofstock's Terms&Conditions that investors have to agree to but few actually read before using their website, the seller and Roofstock are well protected from liabilities, much better than a seller and brokers would in a typical MLS transaction scenario. As a result, I have very limited ways or no way of recourse.

Combined with some other things that have happened and my interactions with Roofstock, I feel that buying properties from Roofstock is like buying properties without a buyer’s agent, their “one stop for all” business model is inherently flawed, and the water is too deep for newbie buyers. The increased efficiency is achieved at the cost of buyers' best interests. 

Furthermore, despite Roofstock’s effort to find top providers to work with their investors, it looks like Roofstock struggles to bring all of them up to standards and keep them in check. The quality of service from different providers (title companies, PMs, inspectors) swing so widely that the good ones exceed my expectations, and the bad ones make me wonder how they stay in business or why hasn’t got taken out by the FTC. I’ve dealt with just as many bad ones as the good ones. In some cases, buyers have the options to pick the ones they prefer; in other cases just a hit or miss.

Last but not least, Roofstock advisors' excellent work ethics can’t compensate for their lack of knowledge of the local markets. On the other hand, lots of the sellers are institutional investors or local RE professionals, which inevitably shifts even more risks to newbie buyers.

This is a 1-star review for newbie buyers; 3-star review for seasoned buyers who know what to watch out for when evaluating deals; 5-star review for sellers, especially those who want to evade scrutinization from shrewd local brokers and failure-to-disclose-property-defects lawsuits.

Well, since I rate Roofstock 5 stars for sellers, why don't I just list it for sale on Roofstock? The simple answer is that the actual market rent ($900-965/mo) to list price ratio (ARV 120 -140K) would not be enticing to SFR buyers. The market rent Roofstock gave ($1025/mo) when I made the purchase was inflated btw.

I can post a long version to elaborate on the above-mentioned points if more than 10 people on BP are interested to know more. 

[Amit M.]

@JC Wu

read

my

profile

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3words

[JC Wu]

@Amit M.Lol!! You can always come up with those astute 3-word summaries? "Less is more" from your profile, I like it. Impressive investment strategy you've been pulling off! 

@Account Closed"Barriers to entry", that's the term. After reading your posts, it seems that what I need is a mentor. Those occasional lunch/coffee sessions probably won't be enough unless some experienced investor is willing to be harassed by me every single week. The learning curve definitely looks steep and the viable local strategies come with high barriers to entry. 

The worst investment decision I've made to date actually has nothing to do with REI. I was gonna invest 1M in bitcoins when the price was $220/piece a few years back. An "investment advisor" from a Bank of America branch strongly advised against it with a passion, which successfully deterred me at the last moment. Thinking back, if he was so good at making investment decisions, he wouldn't be working at a cubicle relying on his 6 figure salary to make a living. I only have myself to blame as it was my ultimate decision to take his advice. I feel that timing matters more than strategy when it comes to investment; but when I miss the timing, I can only play with tweaking strategies which is easier said than done. :(

@Chris Clothier Aren't you the biggest TK provider in Memphis? How do you feel about @David Song thinking that TK promoters on BP try to tell ppl that OOS TK is easier and better than local investing is BS?

[David Song]

@JC Wu

Unfortunately, there is no shortcuts in REI. Unlike stock, REI is a high barrier investment. Newbies are better off invest in stock market or REITs, passively, than being ripped off by A number of crooks in this business. The risk is way too high for newbies, to justify the reward. The only way to succeed is reduce your risk by knowledge and hands on experience.

I do not believe that REI is suitable for most people. It is only suitable for a subset of people who are interested in this discipline and are willing to spend. A lot of time in it.

The only time newbies are successful in during 2009-2012 period, when anyone had the guts to buy a house would win. So timing the market is the only chance for newbies. I was a newbie in 2009, bought my first investment duplex in San Mateo.

This website, biggerpockets, has literally become a OOS TK promoter website. It has lost its initial focus on investment strategy and descended into a marketing place for scammers. Interestingly, most of those OOS TK providers tri to lure people from CA. Why not market to their local folks?

1. Their properties are overpriced.

2. Their locla folks do not have the money to invest, which means that their local investors are simply not big pockets.

3. CA investors enjoyed huge appreciation and are much bigger pocket.

Please do not fall for those OOS TK propaganda. Dumbest investment anyone can make is OOS TK.

[Chris Clothier]

Originally posted by @JC Wu:

@Amit M.Lol!! You can always come up with those astute 3-word summaries? "Less is more" from your profile, I like it. Impressive investment strategy you've been pulling off! 

@Account Closed"Barriers to entry", that's the term. After reading your posts, it seems that what I need is a mentor. Those occasional lunch/coffee sessions probably won't be enough unless some experienced investor is willing to be harassed by me every single week. The learning curve definitely looks steep and the viable local strategies come with high barriers to entry. 

The worst investment decision I've made to date actually has nothing to do with REI. I was gonna invest 1M in bitcoins when the price was $220/piece a few years back. An "investment advisor" from a Bank of America branch strongly advised against it with a passion, which successfully deterred me at the last moment. Thinking back, if he was so good at making investment decisions, he wouldn't be working at a cubicle relying on his 6 figure salary to make a living. I only have myself to blame as it was my ultimate decision to take his advice. I feel that timing matters more than strategy when it comes to investment; but when I miss the timing, I can only play with tweaking strategies which is easier said than done. :(

@Chris Clothier Aren't you the biggest TK provider in Memphis? How do you feel about @David Song thinking that TK promoters on BP try to tell ppl that OOS TK is easier and better than local investing is BS?

 Good Morning JC! I apologize because this is going to be long.  I am going to go into a few details and it is probably not the right forum, but you asked the question and I am going to answer.  In short, I believe that Turnkey is a great option for many investors.  It fits their needs.  At the same time, I think the industry in general is a mess and David is right that many investors will get hurt.  That is both the fault of the companies and the investors.  In the end, the investor is responsible for making good, informed decisions and for knowing precisely what their needs are as investors.  

I have followed David Song's posts on here for a while and I respect him and his points of view.  If his profile is correct, then I have been commenting and connecting on BiggerPockets with investors longer than he has been investing in real estate.  Since the beginning, the same (sometimes lazy) opinions about buying Turnkey real estate have been posted on here.  All investment opportunities that get marketed as Turnkey and all investors who choose that passive route are not the same and cannot be lumped into the same definition.

From day one, I have always advised investors to look locally first. It reduces the risk for the investor if they stay local. Not to mention, for investors who really want to dig deep and understand the fundamentals of real estate, hands-on is the best way to get there. That is why I have always advised investors to be sure that their reasons for looking out of state match their needs and ultimate desire as an investor. For those that realize they would really rather be hands-on, I give the same advice that Saj gave. Find someone local (and you can almost always make that connection here on BP) and ask for the opportunity to connect and pick their brain. Attend your local REIA and start connecting.

To be direct, I give this same advice to investors who ultimately realize they want to be passive.  Find someone local that is successfully investing passively out of state and ask for the opportunity to ask questions.  Often times the cost of a cup of coffee can reduce your learning curve and greatly reduce your risk.

So, I give the advice that has helped me in so many different stages of life from being a husband, father and entrepreneur.  I have always sought out those that I respect and asked for the opportunity to talk.  It has helped me get further faster more than anything else.

As for the lazy comments that all out of state investing is bad and all turnkey investments are bad.  That is not true and it ignores the fact that an overwhelming majority of real estate investors do so passively.  When Memphis Invest teamed with BiggerPockets in 2012 to survey real estate investors nationwide, the results were overwhelming that most investors bought property passively.  A majority bought out of state, owned just over one property and had plans to continue building their portfolios.  A majority were single-family investors.  As for Turnkey, the bad reputation was earned over the years by companies that used the word to attract investors with no intention of actually helping them be successful.  To this very day David is right that there are companies here on BP who are taking advantage of out of state investors, using the word turnkey to market and even using marketers/promoters here on BP to push more investors to them.  In the end, are they doing it on purpose?  That is not for me to say.  But, there are plenty of horror stories where investors buy properties and they fail fairly quickly and then no one is there to help them.  I think a vast majority of the time the problem is that the companies are poor business people who do not know how to run a business.

The other problem is that new companies pop up daily and the simply cut and paste marketing copy.  From day one they promote themselves as high-quality, safe, service oriented and experienced.  We have had many companies come to us for advice and very few of them want to do the hard work that it takes to earn a good, solid reputation.  I recently saw a company pop up with a slick website and promotional copy that looked remarkably similar to Memphis Invest.  They even touted themselves as having over 50 years investment experience.  They sound like a great company and their website is slick.  Unfortunately, like many other companies there is very little truth to it.  In this case, we know they have no investment experience, no real company and not much more than a dream of working for themselves.  I admire them for their moxie in starting a company, but the fact is that investors who buy from them sight unseen are taking a massive, massive risk.  They are buying into a promotional story that may not be true.  Unfortunately, this happen daily with new companies popping up.

What happens next with many of these companies is they agree to pay a promotional company anywhere from $5,000 to $10,000 per property for an investor because they don't know how or aren't willing to put the time in building relationships on sites like BP to build their reputations.  Those fees add to the price of the property and many companies choose to cut other areas like renovations rather than increase the value of their product.  They want the easy, short road to building a company and someone has to pay for that short cut.  It is often the investor who failed to do their proper due diligence, failed to be patient and ultimately didn't ask the tough questions they need to ask that pays for those short cuts.  

Turnkey is just a promotional word and it, just like passive investing, require the same due diligence that any other investment requires.  Do you have to know all of the ins and outs of real estate? No.  Do you need to know the ins and outs of your investment? Yes!  The best advice I can give to passive investors who are interested in looking outside their local areas and like the idea of a Turnkey investment is to be patient.  Spend time getting to know your investment objectives.  Spend time getting to know why you want to invest in the first place.  Ask yourself if you want to understand all the terminology of real estate or simply want the safest route to passively investing in real estate you can take.  Either way, the investor who spends time and patiently makes an investment plan, will give themselves the best chance for success.

Lastly, Memphis Invest is not just the largest company in Memphis, but in the Turnkey industry as a whole. We have been in business longer than any other company out there and have earned our outstanding reputation over 6,000 property transactions with 2,000 investors. Our first investors were FedEx workers, pilots, engineers, line workers, etc. who attended the local Memphis REIA and heard our founder and CEO, Kent Clothier, Sr. speak about his portfolio. Our out of state investors first came directly from our circles of influence in Denver where I lived and Florida where my older brother lived. Through referrals, investors from other areas of the country began to contact our company. Today, our five biggest states for where investors live mirror the five most populous states in the US. California, New York, Texas, Florida, Illinois and followed by Tennessee. The idea that every investor comes from California and all of those investors are dumb for investing passively outside of California is silly.

I feel like I've typed enough.  My post is probably too long as it is and for that I apologize.  Just know that I respect the opinions of everyone.  I don't always agree, but I've spent my entire time on BiggerPockets connecting with people, listening to opinions, sharing my opinions and having debates - all in the name of adding my voice to those trying to help us all be successful.  Hopefully on some level I've hit my mark~!

[Amit M.]

@JC Wu ok, I’ll give you some basic advice, beyond 3words :)

1- to invest in SF or prime Bay Area, you need to have a few to several hundred thousand $ avail. It sounds like you have that. Can’t get in this market with $50-100k. 

2- if you don’t already own a home, I’d look at 2-4 units and house hack. One of the best ways to start investing imo, especially for young people who can be flexible on location, unit size, etc.

3- look for properties with value add- renovate and/or reconfiguring units, maybe adding an ADU in basement or garage conversion, upside in rent increases via tenant turnover due to natural attrition, buy outs, etc. You don't have to do these things right away, but get a property that has these potentials, and execute when you can.

4- As you know the market is softer now. So there is opportunity to get a relatively decent deal on a property that needs some work or value add turn around strategy to put to highest and best use. I’d also focus on gentrifying areas, as their upside is usually greater than established hoods when the market cycles up again. But you need to be careful not to overpay, as example many middling areas in Oakland shot up a lot, so you need to learn the hyper local markets well. Look at sold properties, attend open houses, talk with local realtors, walk the streets, talk to neighbors, shop owners, etc. to find the areas that appeal to you  

5- what may seem like negative cash flow today, will be positive with the value add strategy, and market appreciation of both rents and core property value. That is why prime Bay Area RE is so expensive. It’s a blue chip market, with contained downsides and large upsides when the markets cycle booms. This graph is a good illustration of that. Good luck!

[Bryan Devitt]

This whole thing is filled with a ton of blame and excuses and no where close to enough personal accountability or serious questions on how to fix the actual issue and move forward to become successful. The first issue people need to fix is figuring out what their issue is, most of the time it is them and their mentality 

[Bert Calero]

@JC Wu

For that property you would have been wise to pay no more than 37,007.00 welcome to the humidity zone (Florida) . Always best to visit the property or have a local doit for you,

Thank you for the Roofstock heads up!

[James Wise]

Originally posted by @Natalie Schanne:

@JC Wu - I’m sorry you lost money in your investment. It looks like you picked a good, appreciating market. Did you find out how much your wholesaler sold the property for (without doing anything about the permits) above your 107k?

Why didn’t you keep renting it through the property manager (doesn’t roofstock provide or recommend one?)? was a tenant in it? What’s the story with that? I would have thought everything was updated and you could rent it indefinitely after buying from roofstock.

I’m sorry you got some advice that really confused you and made you want to sell. I highly recommend you work with agents in the future. (We’re free to you as the buyer). I’ve bought several properties as-is, agreeing to take on the liability for previous work after a home inspection. The older a house is, it’s almost 100% likely it’ll have unpermitted work. Generally the city wants to check that it’s done right. Often they’ll waive any fees associated with the as-is condition of what you bought and only if they’re really mad at you will they make you back permit something and usually it’s like a $100-200 permit fee and an inspection and maybe another couple hundred dollars of quickie repairs. I love the idea of the permitting process (protects the consumer) but my local municipality can’t hire enough inspectors (low pay/stress/high experience requirements) so the wait time is 30 days to get your permit approved and 30 days more to schedule an inspection. All for adding an overhead light or two (generating the city approx $50 in fees) that’ll take the electrician an hour and costs you $200. So I understand why flippers work now and ask for forgiveness later. If the work is done well, (not necessarily with the most expensive materials) there should be no issues. My insurance company Usaa told me they wouldn’t deny claims for unpermitted work (probably unless it was like egregiously bad electrical that caused a fire or something.)

In New Jersey, this past year, they did away with roofing permits. I bought a $8000 new roof in 2018 from a 5 star local company and would have rather had a city inspection verifying everything was good but it wasn’t even available. So you being forced to sell because of your new unpermitted roof is a little wonky to me.

To clarify you sold to a wholesaler for $107k?

Wholesaler sold it for $117k?

What'd you buy it for?

[JC Wu]

@David Song I have a financial advisor from Merrill Lynch, who's on the Forbe's America's best wealth advisors list. Her team has been doing an excellent job at managing and growing my portfolio consists of core investments ( stocks & bonds) and satellite investments like gold mines, etc. It's completely passive; the annual return has been around 15% for the past few years. But taking the powerful compound interest effect (which btw doesn't come with REI) into account, the annual returns are actually much higher. She basically told me the same thing you said about the risk of REI investing being way too high for newbies to justify the reward and time spent. When I vented about this bad experience, she gave me this much anticipated "I told you so" smug smile that made me want to both hug her and slap her.

Kudos to you for jumping on the train with perfect timing before it sped up again. I might get my brain knocked out if I were to make a jump now.

@Amit M. Damn. Five bullet points AND a graph. What a generous treat!

You think Bay Area property value still has a large upside growth potential? The population growth seems to be slowing down and it’s already the most expensive market in the nation.

@Chris Clothier I gotta say, you’re really good at what you do. Way better than that Roofstock PR guy who left Roofstock recently. @Jason G. has made more contributions than him on BP. Roofstock should at least send Jason a holiday gift basket, like a few bottles of wine + dried fruits&nuts tray.

Your insider’s knowledge of the TK industry is super intriguing. I appreciate you taking the time to write that long post.

It’s shocking to learn about how much these shady so-called “turnkey” companies pay promotional companies to lure in investors.

I didn’t know Memphis Invest is not just the largest company in Memphis, but in the Turnkey industry as a whole. That’s fascinating and congratulations. The Memphis market is THAT big? Does your company only operate in Memphis or plan to expand to other markets? I know when Roofstock first entered the Memphis market, their properties flew off the shelf/site like Costco rotisserie chickens. However, after a while, the heat cooled off.

I presumed folks from Texas, Florida and Illinois invest local - those are popular out of state markets to CA and NY investors.

@Bert Calero How did you come up with that 37007.00 number? This is the property, 258 days on market, lol:

@James Wise I bought it for 95K, add another 2 - 3K in closing cost. Yes, the wholesaler bought it from me for 107K and sold it to the end buyers for 117K, so the end buyers paid 117K + 3K in closing costs. Poor fockers won't be a return client of the wholesaler that's for sure. 

Happy Thanksgiving guys! 

[James Wise]

Originally posted by @JC Wu:

@David Song I have a financial advisor from Merrill Lynch, who's on the Forbe's America's best wealth advisors list. Her team has been doing an excellent job at managing and growing my portfolio consists of core investments ( stocks & bonds) and satellite investments like gold mines, etc. It's completely passive; the annual return has been around 15% for the past few years. But taking the powerful compound interest effect (which btw doesn't come with REI) into account, the annual returns are actually much higher. She basically told me the same thing you said about the risk of REI investing being way too high for newbies to justify the reward and time spent. When I vented about this bad experience, she gave me this much anticipated "I told you so" smug smile that made me want to both hug her and slap her.

Kudos to you for jumping on the train with perfect timing before it sped up again. I might get my brain knocked out if I were to make a jump now.

@Amit M. Damn. Five bullet points AND a graph. What a generous treat!

You think Bay Area property value still has a large upside growth potential? The population growth seems to be slowing down and it’s already the most expensive market in the nation.

@Chris Clothier I gotta say, you’re really good at what you do. Way better than that Roofstock PR guy who left Roofstock recently. @Jason G. has made more contributions than him on BP. Roofstock should at least send Jason a holiday gift basket, like a few bottles of wine + dried fruits&nuts tray.

Your insider’s knowledge of the TK industry is super intriguing. I appreciate you taking the time to write that long post.

It’s shocking to learn about how much these shady so-called “turnkey” companies pay promotional companies to lure in investors.

I didn’t know Memphis Invest is not just the largest company in Memphis, but in the Turnkey industry as a whole. That’s fascinating and congratulations. The Memphis market is THAT big? Does your company only operate in Memphis or plan to expand to other markets? I know when Roofstock first entered the Memphis market, their properties flew off the shelf/site like Costco rotisserie chickens. However, after a while, the heat cooled off.

I presumed folks from Texas, Florida and Illinois invest local - those are popular out of state markets to CA and NY investors.

@Bert Calero How did you come up with that 37007.00 number? This is the property, 258 days on market, lol:

@James Wise I bought it for 95K, add another 2 - 3K in closing cost. Yes, the wholesaler bought it from me for 107K and sold it to the end buyers for 117K, so the end buyers paid 117K + 3K in closing costs. Poor fockers won't be a return client of the wholesaler that's for sure. 

Happy Thanksgiving guys! 

 This entire thread is ridiculous. You bought a property for $95k that was sold for $120k. There is no problem here.

[Amit M.]

@JC Wu yes I do think that SF and core Bay Area has mid to long term appreciation upside. That’s why I added that graph: You gotta remember that at every past “high” people cried that that’s the end! And it wasn’t. Of course there are always headwinds, but emerging tech such as nano, robotics, AI, bio, alt fuel, etc. still have an outsized footprint here, and will still be a powerful driver. 20 years from now, who the hell knows, but for the next 10-15 my bet is still on SF. 

Also, on an international level SF RE is relatively cheap compared to central London, HK, Manhattan, etc. We have definitely seen “global” money impact SF, and while it’s less today, it still has an impact and will continue in the future. Rich people have to invest somewhere, and there are a smattering of “elite” locations that are to their liking, including SF. It’s a bit like collecting fine art; a limited supply of desirable jewels that an ever growing coterie of new wealth wants under their belts. Usually these rarified and chosen locals do not permanently go down in value, as rich folks collectively seek to protect their interests. Additionally there is always a healthy nouveau rich following that attempts to mirror their predecessors achievements. Of course SF’s über liberal city gov absolutely hates this phenomena, and activity taxes and limits new “market rate” housing in many different ways. (I like to refer to this as our local version of 20+ years of the Elizabeth Warren effect;) This, combined with a healthy dose of nutso nimby activists excel at limiting supply, making SF property an even more exclusive and desirable “achievement” for the upper class to obtain. Sh!t, just look at SOMA and Ricon Hill, already throughly Disneyland For Adults ;)

So no, I don’t think these deeply entrenched factors and trends are going away anytime soon. 

my2c

[JC Wu]

@Amit M. Thank you SO much for all this information and insights, it's really helpful and much appreciated. I feel like I can listen to you talk all day.

Speaking of being patient, a double whammy of recession and a major earthquake (magnitude > 8.0) can potentially drive SF home prices down considerably for the short term. They’re both overdue and can appear with startling suddenness. I’m just daydreaming out loud.

@James Wise Read the entire thread before you jump to conclusions on the entire thread. You wouldn’t have asked the last question in the first place if you even read through the top half of the first page. This thread has more to do with Roofstock the company than my experience with this single one FL property.

[Anthony Yu]

I love this post so much!

Hi everyone, I am very new to property investment & also new to BiggerPockets. I was thinking about buying my first investment with Roofstock before I fumbled to this post. 

I def thought Roofstock was for beginning investors when I listened to other podcasts, youtube, and Roofstock's FB advertisements. 

After I read all of your comments, now I have better understanding of what it is for, and what type of real state investment I should do as my first. 

I want to thank everyone for their contributions. This post rocks. And Thank you JC WY for posting it.

@JC Wu

[Jordan Geiman]

I'll second Anthony's comment above. I really enjoyed this thread from multiple angles. Lots of good solid info sprinkled in over the 100+ posts!

[Jon Q.]

What it comes down to is this: there is no substitute to being informed and having experience in what you are doing. Also, if it's something new that you are doing (investing in real estate), id suggest that you should be overly cautious, move slowly and consult pros in order to limit your risk.

[Jon Q.]

Like most markets, San Francisco past a peak 12-24 months ago, so whether or not your investment is profitable depends on when you buy, sell, refi etc... because real estate market cycles last from 5-7 years on average. That means that you'll likely have two peaks within 15 years time...

[Jon Q.]

Originally posted by @JC Wu:

@Amit M.Lol!! You can always come up with those astute 3-word summaries? "Less is more" from your profile, I like it. Impressive investment strategy you've been pulling off! 

@Account Closed@Chris Clothier"Barriers to entry", that's the term. After reading your posts, it seems that what I need is a mentor. Those occasional lunch/coffee sessions probably won't be enough unless some experienced investor is willing to be harassed by me every single week. The learning curve definitely looks steep and the viable local strategies come with high barriers to entry. 

The worst investment decision I've made to date actually has nothing to do with REI. I was gonna invest 1M in bitcoins when the price was $220/piece a few years back. An "investment advisor" from a Bank of America branch strongly advised against it with a passion, which successfully deterred me at the last moment. Thinking back, if he was so good at making investment decisions, he wouldn't be working at a cubicle relying on his 6 figure salary to make a living. I only have myself to blame as it was my ultimate decision to take his advice. I feel that timing matters more than strategy when it comes to investment; but when I miss the timing, I can only play with tweaking strategies which is easier said than done. :(

@Chris Clothier Aren't you the biggest TK provider in Memphis? How do you feel about @David Song thinking that TK promoters on BP try to tell ppl that OOS TK is easier and better than local investing is BS?

"Less" is not more. Be careful as this can be interpreted in faulty ways.

High quality is more. For example, if you can acquire 5 properties that yield the same return as 10, then you are obviously better off acquiring the 5 properties.

More is better. (more effort) Active investors are more successful than passive. I've been investing in markets nationwide for over 20 years and I can tell you that, holding all else constant, those investors who are active are generally more successful. I am VERY involved in all aspects of my business...and, although I trust, I also know how everything is done and verify most things.

[Jon Q.]

Originally posted by @Account Closed:

@JC Wu of course there is a catch. If it were easy everyone would do it. Unless you’re willing to put in work, you won’t succeed here.  And it doesn’t need to be broken foundations or complete gut jobs. 

Most people here venture to OOS because there is literally no barrier to entry there. Anyone can drop $50K on a house there.

There are several locations here where you can add value and make a lot of money, both with cash flow and appreciation. Think Oakland, Vallejo, Richmond, Stockton, Sacramento. And I’m talking mainly Multifamily, not SFRs. 

You’re much better off taking @David Song to lunch and pick his brain for an hour rather than poking holes in our local strategies. Just my .02 

Yes, great advice! Good post.
I wouldn't agree that Vallejo and Stockton should be lumped in with Oakland, Richmond, and Sacramento...as the demographics, population forecasts, and job growth forecasts vary considerably. But point well-taken.... those markets who ARE actually already showing signs of revitalization would likely be good places to target... but again that would depend on your investment strategy and unique way you plan to add value in order to achieve your specific investment goal.

[JC Wu]

I JUST NOTICED SOMETHING EXTREMELY BIZARRE:

When "Roofstock negative review" or "Roofstock bad review" is searched on Google, this thread used to be THE top/first search result on the first page. And when "Roofstock review" is searched, this thread used to be the first result after those Google ads. I don't save password for this site, so I usually just type in those keywords on Google to access this thread. Now this thread just doesn't pop up on Google no matter how I search it, even if by searching with the full title. Is it just me? Anybody else? 

@Mindy Jensen Does BiggerPockets accept money from companies in exchange for removing a thread from your site or at least downgrading the ranking of a thread in the search results? I'm asking purely out of curiosity, not implying anything. If not, how does BP rank its search results? It doesn't seem to be based on popularity (number of replies). 

@Jon Q. How did you find this thread today? 

You wrote that you've been investing in markets nationwide for over 20 years, and active investors tend to be more successful than passive investors. So have you been investing actively in out-of-state markets? Many out-of-state investors wish to be more hands-on and get more involved but the distance makes it unrealistic. 

How do the demographics, population forecasts, and job growth forecasts in Vallejo and Stockton vary considerably from Oakland, Richmond and Sacramento? 

[Duncan Plexico]

Howdy JC.  When searching what you inquired about, this site is at the top...

[JC Wu]

Originally posted by @Duncan Plexico:

Howdy JC.  When searching what you inquired about, this site is at the top...

 That's what I'm talking about. The title of this thread is "Roofstock review. NEWBIES BEWARE!!" with 147 posts, not "My first (bad) investment experience with Roofstock" with 13 posts. 

I suspect Roofstock got Google to somehow remove this thread from Google search results, but the content of this thread shouldn't be the type of info that Google removes upon request (I'm 99.9% sure about that), which is why I'm baffled. 

[Duncan Plexico]

Interesting.  Just for giggles, try typing the header of this thread (r00fst0ck review.  Newbies beware) into your fave search engine.  Happy thread hunting...

[JC Wu]

Originally posted by @Duncan Plexico:

Interesting.  Just for giggles, try typing the header of this thread (r00fst0ck review.  Newbies beware) into your fave search engine.  Happy thread hunting...

Focking hell! I tried another search engine: DuckDuckGo. Sure enough, this thread popped up as the 3rd search result on the first page.

Duck duck Go!

Shame on Google, fishy as hell. I can't believe we live under such a tyranny of internet censorship. 

[Duncan Plexico]

JC - Happy Holidays! Great post getting better...

[JC Wu]

WATCH OUT FOR CASH ONLY PROPERTIES ON ROOFSTOCK!!!

So people have been spilling their Roofstock stories to me in PM all the time, mostly the same old stuff I already know about, but this recent one particularly caught my attention. I can easily see how a large number of newbie out-of-state investors fall into a trap like this. 

Short version: This Roofstock investor (let's call her/him X) was interested in a property that gave the buyer the options of financing or cash. X ordered two appraisals, both revealed the property was only worth 2/3 of Roofstock's valuation and list price. By the way, Zestimate came close to Roofstock's valuation and list price. X backed out of the deal. The next day, Roofstock relisted the property on its site at the original list price, this time as cash only so potential buyers can't order their own appraisals to learn the true value of the property. 

Here are screenshots of the PM conversations if you want to read the long version:

I seriously doubt a tactic like this is Roofstock specific. 

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Under this line is the spectator zone for those who might be especially interested in the answers. Here's your virtual popcorn. You're welcome. 

@Santosh K.@Tim B.@Brian Ploszay@Tony Kim@Ian Ippolito@Amit Jadhav@William Keasling@Cody DeLong@Account Closed