Roofstock Property Purchase: Review of Overall Experience (total of 41 days)

In general, my experience with Roofstock was positive despite the fact that the deal fell through in the very end.  There were no big red flags throughout the process and they professionally guided me through my first purchase experience. Furthermore, had any counter offer from the seller been made, I'd have had my first property that had some nice cash flow numbers. I think I would use Roofstock again if I can find another property with similar numbers to the one I was in closing on.

I'd list the pros and cons of working with the company as follows:

Pros

• Great customer service. Both Alexis, Jason, and Zach were very helpful, quick to respond, and generally nice to work with. 

• They are in the Bay Area, which is also where I live/work 

• The process was super easy. They took care of putting together all of the paperwork and keeping track of timelines specified in the PSA. They also scheduled both the inspection and appraisal. 

• They provided recommendations for home insurance, bank loans, and property management. I used their recommended bank and one of their recommended PM companies, but got a better deal with home insurance through the loaning bank. They provided options but you are completely free to shop around and choose your own for any of those categories. 

• The Roofstock marketplace is like any other online shopping, so it is easy to take a look at a lot of properties quickly. 

• Roofstock graciously refunded me back my marketplace fee due to the disappointing outcome of the deal.

Cons

• It's really hard to find any deals that are, in my opinion, worth buying. Most of the properties listed on their site are at or above market price and in areas where appreciation will be a very small factor. I've been looking at their site for months now, and only found maybe 2-3 (including the duplex I entered into contract) that would cash flow above 8-9%. 

• There is that strange feeling with Roofstock being the middle man between both the buyer and the seller. There is no fowl play here, but it definitely feels weird having one entity representing both buyer and seller.

• You never get any direct contact with the seller/broker. Roofstock handles all correspondence between seller and buyer.

• Due diligence on the property was still difficult despite getting inspection reports and pictures. Their reports were fairly detailed but still left me wanting a bit more. Generally, with only a few days to respond after receiving the inspection report, there is not much that can be done unless there was something super obvious in the report. 

• This one was specific to my deal, which was a bit tainted due to the final outcome. The seller failed to respond within one of the contract deadlines so we had to extend the timeline. Once the seller finally got back 12 days after my counter offer, he did not counter again and instead terminated the contract. I felt a bit helpless through that whole time period.

Roofstock Property Purchase Day 41: Seller Response to Counter Offer

It looks like we were finally able to get a response from the seller. This was 12 days after the original counter offer at the appraisal price was sent.

The seller contacted Roofstock and notified them that he was not accepting the counter offer and terminating the contract. This was disappointing because I would have basically accepted any counter offer since the numbers would still have worked well within the available pricing spread (i.e. from the appraisal value on the low end all the way back up to the originally agreed upon price on the high end).

This property would have been a great first property as it cash flowed very well. The final numbers were as follows should the deal have gone through, with the cash on cash ranging from 11-15% depending on what the counter offer would have been with $400+ profit per month:

This definitely not the ideal outcome, but out of the original $3300 that came out of pocket, I was able to recoup $2475 of that.  Both Roofstock and my loaning bank gave me back my initial "non-refundable" deposit, which was a "tip of the cap" to both of them.

Looking back on the property, even though I projected that the appraisal would come in at a lower price, I should have factored in that it was unlikely that the seller would accept that price since there was such a discrepancy between the listing and the appraisal prices.

Overall, my Roofstock experience was generally positive.  I'll list the pros and cons in the next post.