AgentTechnology

Fueled by $35M, Roofstock hopes to keep real estate agents interested

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Roofstock, an online marketplace where investors can purchase and sell single-family rental properties, has announced Series C funding to the tune of $35 million dollars.

Gary Beasley, CEO of Roofstock

The company, founded in 2015, has already made a splash by offering institutional and retail investors an innovative way to access a particularly tricky asset category. By employing third-party inspectors, the company provides users with an array of property data typically not available on the MLS.

As such, Roofstock’s clients are able to purchase homes from across the country without ever seeing them in person, according to Roofstock CEO Gary Beasley. And as a bonus, the rental homes already have tenants.

Roofstock’s online system also shaves money off the transaction. While investors would normally pay a 5 to 6 percent listing commission split between the seller’s and buyer’s broker, Roofstock charges around half a typical commission to sellers (2.5 percent) and a 0.5 commission to buyers.

It offers a referral fee for real estate professionals who register their clients on the marketplace, through which agents can get a 25 percent cut of Roofstock’s listing commission.

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Roofstock has expanded to 15 markets, and company leaders hope the influx of cash will help them continue to scale. Already, they’ve moved from the Southeast United States into Los Angeles, San Francisco and Las Vegas.

Roofstock’s Oakland office

Roofstock has gained some venture capital expertise with the new funding led by Canvas Ventures and Rebecca Lynn. Lynn was one of the original investors in the successful LendingClub, 2014’s largest IPO.

Roofstock portfolio view

“[Lynn] sees an interesting opportunity here to really help us scale and really tap into the consumer market,” Beasley said.

The company is also focusing on augmenting its website’s user experience to make buying and selling more streamlined and developing new data insights.

“That’s a way for us to, in a very transparent way, show people kind of the risk/return and tradeoffs of various neighborhoods,” Beasley said, referencing Roofstock’s star-based neighborhood rating system, which rolled out in July and is constantly being updated with new data. The company is also working to complete a “mapping exercise” of all 16 million homes in the U.S.

“It’s rich fodder for analysis and sort of a living, breathing database that we can continue to monitor trends, and keep gathering as much data as we can about that,” Beasley added.

The company is currently testing out different ideas to keep real estate professionals interested. Beasley hopes to continue to build a reciprocal relationship with agents and brokers.

“We do consider ourselves part of an ecosystem in a way for agents to be active in the 10 percent of the residential markets that they’re probably not too active in,” said Beasley. “We consider ourselves a resource for them and sort of a catalyst for more business, as opposed to trying to displace them in their bread and butter.”

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