‘We’ll Sell You Part of the Home’: New Real Estate Pitch?
February 27, 2019
A company that markets single-family rental homes is making news headlines with its unique proposition to investors: They’re willing to sell a tenth of a home. Roofstock is hoping to lure investors who may want to start small with their investments.
Roofstock purchases homes and then places them in a trust. It then sells stakes in the home for $5,000 or more. The move is to help investors avoid carrying a loan on their personal balance sheet but start receiving the tax benefits of owning commercial real estate as well as a portion of the rental income from it.
“The whole idea at our founding was to create a platform where real estate could trade much more like a stock,” Gary Beasley, CEO of Roofstock, told Bloomberg.
More startups are popping up intending to help investors once again amass large portfolios of rental homes, as they did following the foreclosure crisis. Since deep bargain prices and foreclosures have dried up, some investors have curtailed their buying sprees and many have consolidated with bigger firms.
Roofstock, like some other recent startups, is hoping to jumpstart small-property owners interested in investing in single-family rentals. Roofstock is targeting properties in the $100,000 to $200,000 price range. It is launching in Atlanta and Indianapolis before rolling out to more markets.
Updated: January 17, 2020