Investment capital that was once earmarked for commercial real estate is now flowing into the single-family rental (SFR) sector. As The Real Deal<\/a> recently reported, SFRs have become a big focus of Wall Street players, start-ups, and venture capital.<\/p>\n <\/p>\n We\u2019ll look at 2 well-known industry names, Roofstock and RealtyShares, and compare how each company helps both individuals and institutional firms invest in real estate.<\/p>\n \u00a0<\/p>\n Both Roofstock<\/a> and RealtyShares operate platforms for investing in income-producing real estate, but in entirely different ways.<\/p>\n Roofstock is a good option for anyone who wants to invest in SFR homes, while RealtyShares offers investment opportunities limited to accredited investors seeking to invest in commercial real estate projects<\/a> alongside other investors.\u00a0<\/p>\n Investors buying or selling a property on the Roofstock Marketplace<\/a> pay a small, one-time transaction fee. Although rental property purchased through Roofstock is owned directly, many investors turn the day-to-day operations over to a vetted local property manager.\u00a0<\/p>\n Roofstock One<\/a> is intended to be a passive investment, providing an efficient alternative to direct investing. Accredited investors can focus on assembling targeted portfolios with allocations across markets, focusing on specific investment goals, while enjoying passive income with potential long-term growth from home price appreciation.<\/p>\n RealtyShares allows accredited investors to invest in commercial real estate with as little as $25,000. After creating an account, investors can explore opportunities and invest online. Investment performance is tracked on each user\u2019s dashboard.<\/p>\n Fees paid by investors using the RealtyShares platforms vary based on an individual offering memorandum and may include deal initiation fees, revenue shares after hurdle rates are met, and a share of any profits when a property is sold.<\/p>\n \u00a0<\/p>\n Investors have options for investing in rental property with Roofstock: through Roofstock One, the Roofstock Marketplace, or a combination of both.<\/p>\n Roofstock One<\/span><\/p>\n Roofstock One provides an efficient alternative to direct investing (avoiding the need to be on title, obtain mortgages, supervise rehabilitation activities, find property managers, and handle ownership and tenancy issues).\u00a0<\/p>\n Investors can instead focus on assembling targeted portfolios with allocations across markets, focusing on specific investment goals while enjoying passive income with potential long-term growth from home price appreciation.<\/p>\n Investors purchase shares of Tracking and Common Stock in Roofstock One to construct a customized portfolio that best suits their needs and\/or investment goals.\u00a0<\/p>\n Fee structure<\/p>\n Feature summary<\/p>\n \u00a0<\/p>\n Roofstock Marketplace<\/span><\/p>\n The Roofstock Marketplace is a good match for investors seeking direct ownership of SFRs, small multifamily buildings, short-term vacation rentals<\/a>, and larger portfolios of residential rentals. Property on the Roofstock Marketplace is purchased directly from the seller, with Roofstock acting as the facilitator, following the same process as any other residential transaction.<\/p>\n Roofstock also helps buyers conduct due diligence by vetting property markets<\/a> and assigning neighborhood ratings using key factors, such as home values, median income levels, school district quality, and crime rates.<\/p>\n Buyers can also be preapproved for financing online and ask to be referred to prescreened local property managers to handle the daily management and maintenance of the property and take care of the tenants, making it much easier for remote investors to invest in real estate beyond\u00a0 their local markets.<\/p>\n The fee structure on Roofstock is similar to buying or selling property through a real estate agent, at a competitive cost:<\/p>\n Similar to owning a primary residence, investors are responsible for the traditional recurring expenses of owning rental property, including:<\/p>\n Rental income collected from a tenant generally covers normal operating expenses and the mortgage payment, unless the property is vacant during a tenant turnover period.<\/p>\n Investors can negotiate with sellers, open escrow, arrange financing, and purchase preinspected (when applicable) rental properties on Roofstock. Researching rental property is easy with pictures, street views, property inspection reports, tenant lease information, and payment history if a home is already rented.\u00a0<\/p>\n Investors can search for available rental property using key metrics, including:<\/p>\n Pros<\/p>\n Cons<\/p>\n \u00a0<\/p>\n RealtyShares is a crowdfunding platform for investing in fractional ownership of commercial real estate in the \u201cmiddle market,\u201d which consists of properties valued at $50 million or less. According to the company\u2019s website, the commercial real estate middle market accounts for over 90% of commercial real estate transactions each year.<\/p>\n RealtyShares was acquired by IIRR Management Services in April 2019 and currently offers new investors 2 offerings from its affiliates, iintoo Investments and RREAF Holdings, LLC:<\/p>\nHow Roofstock and RealtyShares work<\/h2>\n
Roofstock<\/h2>\n
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<\/span><\/p>\nFee structure<\/h3>\n
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Feature summary<\/h3>\n
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RealtyShares<\/h2>\n