Armed with $13.25 million in funding from Khosla Ventures, Ron Conway, Marc Benioff, Bain Capital and others, Roofstock is launching a marketplace for buying and selling already-rented homes.
The idea is that if you buy a home that currently has tenants, you avoid the hassle of finding renters and the investment property will immediately generate cash flow. Sellers can also list properties before a rental lease expires, providing added flexibility.
“You’d never vacate an apartment home to sell it, so why should we vacate a rental home,” asks Gary Beasley, co-founder and CEO. Before Roofstock, “there was no efficient way to buy and sell investment homes that have tenants in place.”
Known as single-family rental homes, Oakland-based Roofstock showcases listings that have already been inspected. Diligence information and other analytical tools are available on the website to help investors make a decision when buying a home.
Prices are pre-determined, which Roofstock predicts will avoid lost time in negotiations. The deals are closed through electronic document delivery and e-signatures, in order to speed up the process.
Of course, there are no guarantees that the homes will appreciate in value, but Beasley believes that the Roofstock method will result in “dramatic saving for the sellers and the buyers.” The startup is “trying to be very transparent and customer-friendly.”
David Weiden, partner at Khosla investors, says he is investing in Roofstock because “there is a huge opportunity for technology to have a big impact in real estate.” Weiden also spoke of Beasley’s qualifications, having previously run a REIT for single family homes. ”To be successful in this market, one can’t just bring a technology perspective without understanding the existing industry,” said Weiden.
The Roofstock platform will kick off in Florida, with further plans to expand throughout the United States.