Are you looking for a property, but you do not know how to get started? Monick Halm and Madeleine Shields show us the answer to this. As the Sales Manager of Roofstock, Maddy shares to us their exciting platform that takes property investing to a whole new level. She talks about the benefits of using Roofstock versus going the traditional route and going with a turnkey single-family provider. Maddy also presents the range of returns that their platform is offering. For women who want to get started on real estate investments, Roofstock can guide you to your desired property.
Listen to the podcast here:
How To Find A Great Rental Property Online – Interview With Maddy Shields
I’m excited to have with me a super guest, Maddy Shields, who is going to share with us about an exciting product that she has discovered. It’s super helpful for real estate investing goddesses out there who are trying to figure out, “I’d love to find a property, but how do I do it? How can I tell if it’s good, especially if it’s not where I live? Where can I go to feel it and touch it?” She is a San Francisco native, San Francisco State alum and she’s a Sales Manager at Roofstock, which is headquartered in Oakland. She’s assisted in the creation and management of the sales development team there. She’s also the author of the blog post, Smart Ways to Save For an Investment Property Down Payment, for those of you who are like, “I’d love to do it, but how do I find them? I need to do it.” On the day-to-day, she’s dedicated to connecting with and assisting real estate investors of all backgrounds and locations. She has a passion for all things related to investments and personal financing, but particularly real estate. In her spare time, she also writes and enjoys playing music. Welcome, Maddy.
Thanks for having me. Our office is in Downtown Oakland right by BART. It’s great to be here.
It’s great to have you. You’re interested in real estate investing. How did you get started?
It’s definitely a function of my sales career, getting early exposure to different types of investment products over the years and then an introduction into fix and flip through working at a hard money lender. Honestly, working at a company like Roofstock and seeing how this asset performs in terms of cashflow and long-term appreciation, I was compelled by it. In my career, I’m dedicated to being in this facet of real estate specifically. For my personal finances, it’s definitely been switching gears looking at long-term investment, which involves getting that 20% down for that first rental property, or persuading friends and my brother to go in with me on the first one to speed up my timeline a little. I’ve gotten into it.
Partnering with other people is such a smart way to get started because it can take a while to get that 20% down or however much you need. If you can partner with other people, you can get into the game a lot sooner. It gets your mind working for you and then use that to build. You work for Roofstock. Tell everyone what is Roofstock.
Roofstock is the best marketplace for buying and selling investment properties. You can make an offer on rentals right through the platform. You can list properties for sale. You can also get access to vetted property management companies in all the markets we have listings in, which is over 40 markets across the US. We can connect to you to partnered lenders from start to finish. It’s anything that you would need to transact on a rental property right through one platform.
When you’re talking about a rental property, to be specific, you have single-family homes, right?
Predominantly single-family homes. We have multi-units as well. It’s residential. It’s owned residential, four units and under.
Who would you say Roofstock is for?Roofstock is for anyone who's interested in long-term cash flow, owning a property that appreciates. Click To Tweet
It’s definitely for anyone who’s interested in long-term cashflow, owning a property that appreciates. We’re trying to democratize real estate. If you have the ability to obtain financing, fund cash or a self-directed IRA, there’s no reason why you wouldn’t be able to acquire through our site. Sixty percent of our buyers are over a thousand miles away from the properties they’re buying. If you’re in California or New York and you’re trying to access Dallas, Detroit, Memphis and Atlanta, we would definitely be a platform for you.
I live in Los Angeles, which is a super expensive market. I’ve had to invest outside of the state. I’m in five other states outside of California. I’ve learned a little too late that you can live where you want to live and invest where the numbers make sense. In certain cities like the one you mentioned, that doesn’t always make sense. Finding those properties when you’re in San Francisco, Los Angeles and New York is a challenge. That’s one of the things I liked about Roofstock. It’s an online marketplace that helps people be able to do that. That’s one major benefit. What are the other benefits of using Roofstock versus going a traditional route?
The traditional route, you could fly out yourself, find an agent and probably inspect some vacant properties and take a hands-on approach. It tends to be a little time intensive and you need to find a property manager if you don’t live there. Until that home has a tenant in the property, you’re in a sense losing money until it becomes occupied to cover taxes, insurance and mortgage payments. With Roofstock, you could look at a listing, not necessarily travel there first. You can buy a property with a tenant in place already. We have hundreds of listings that have cashflow from day one. From the moment you close, immediately that tenant is covering your mortgage and any other expenses that apply. You can see in advance the properties that are already underwritten as a rental and what would be my cashflow after expenses on this home. An immediate cashflow is a huge benefit and having a lot of this legwork done for you upfront. Another big part is if people think about picking a property manager, you don’t want to go out and meet that property manager firsthand or do I want to know that Roofstock already flew out and met all these property managers before we integrate them into the website itself.
That’s cool that you’ve vetted these guys and ladies because having experienced myself the challenges and the nightmare when you have a bad property manager, it’s nice to have something where we can feel a bit more secure about who’s there and what your options are. You’ve described the differences between going yourself and going to the market, finding an agent and finding the team, doing all of that and getting your own boots on the ground. What would you say is the difference between doing Roofstock and going with a turnkey single-family provider?
People often ask, “What makes you different from turnkey?” Turnkey is generally isolated to one market. It could be a great option, but you do have to put a lot of trust in one company to handle all these different services themselves. They’ll generally be in one specific city, maybe a town in Ohio or in Tennessee and they’ll buy properties, rehab them for you and do a lot of the legwork. You might pay some premium for that service, which is up to you if it’s worth it or not. On Roofstock, this is more a streamlined approach to transact on investment properties. We’ve created a portal for sellers and buyers to go on rather than trusting one company that is acting like my agent. They’re also the rehabber and the property management company. It could be an option. You are generally stuck to one specific area and trusting one individual to do all these services for you at once. Sometimes, they lack transparency. It depends on the company you’re using. We’re in over 40 markets that are accessible. That would probably be the main difference between us as a curated marketplace versus a single turnkey provider.
I also know that with turnkey providers, some are amazing, but some are not.
We definitely had people who love their one turnkey company in this market but how do I break into Atlanta, Dallas or something like that?
I always like to ask about the mistakes people make on the show because we learn more from the mistakes that we do from things that go well. Also, hearing other people’s mistakes makes us less likely to do the same thing. What are some of the biggest mistakes that you see potential investors make when purchasing rentals?
The cheapest property manager is probably not always the best option, but you often see people gravitate towards that. On our site, there are the different companies. We have more than one property manager for you to choose from. We’ve vetted their pricing structure. We think these are quality companies in that market. Granted, you could choose your own and go research and say, “I found a better deal here,” but take it into consideration. You generally get what you pay for. The other main thing is a lot of good investors choose a more quality property in a quality neighborhood, but we do see a lot of people come in and look at high returns, cap rates or high cashflow homes. That may not necessarily be in the highest quality market, which is fine if that’s your goal, but you’d probably want to have the right reserves and a quality property manager. These types of homes tend to come with maybe more maintenance, higher risk for vacancy, late payments and perhaps even an eviction down the road. You’d want to make sure you’re backing that up with a solid property manager and not just cutting costs all around.
I learned the hard way. This lesson that working with the best won’t cost you money, it will make you money. Sometimes, trying to save a few bucks ends up costing you a lot more. There is definitely a huge benefit in having people that are vetted. What do the most successful investors on Roofstock do?
First off, identifying what your main goal is and then picking a property that fits that goal. If it’s long-term cashflow and appreciation, pick a property that’s in line with that. The best investors have a plan and they stick to it. They usually buy a quality property in a quality neighborhood. They use a vetted property management company to handle that and then long-term sees higher returns. Sometimes that comes with maybe a little lower on the cashflow initially, but you’ll have long-term appreciation and equity in the home.
That’s definitely something I teach because real estate investing is not one size fits all. You have to find and get clear on what your goals are and then go after investments that help you meet those goals. When you’re looking at Roofstock, one of the things I liked about it is that you get to see the quality. Not only are you getting all this information about the home, but you’re also getting information about the neighborhood. It helps you to see what class of neighborhood it is and what that’s like. Can you tell us a little bit more about that aspect of it?
I’m happy to give you a little more explanation, but I’m not on our data science team. I’m just going to be upfront about that. You can review it on our site. It’s a 1 to 5-star rating. This is taking socioeconomic data into consideration, like the number of Bachelor’s degrees in a market, employment rates and people owning their primary residences. It’s a great way to compare neighborhood to neighborhood. One to five stars, 1s and 2s generally being higher returns, higher risk, normal risk versus reward. Higher stars generally being are maybe little lower returns, but high appreciation and more stable. The ones in the middle being more of a blend of both.
When you’re talking about returns, what’s the range of returns that you guys are seeing or offering on Roofstock?
You can open up the filters on our site and filter by returns. When you’re talking about rentals, it can mean a few different things. I believe you can drop as low as 1%, 2% or 3% cap rate all the way up to 12%. Save that and see what listings show up. We’re listing new properties and selling them daily. What you could do is save that filter and get a notification if that new property comes on the site. If it’s got the returns you’d want, it’s in the market you want, it’s got the neighborhood score you want and then it’s time to make an offer.
How do you make offers? Are you negotiating with the seller? How does that work with Roofstock?
You can make an offer right through the site. What I like though is you can come in at the asking price with the seller. If you got that notification, this property hits all the other areas that you want in terms of return, location and whatever’s important to you and you don’t want to miss out on it. If the seller wants $100,000, you can offer $100,000 and get a contract digitally on it. You can also make an offer granted to anyone on the site. We have 50,000 active users who can be making offers on the same property. The seller can accept or counter decline that offer. Once you arrive at an actual price, you’ll get the contract and you can sign it via DocuSign. It’s streamlined, but you can make an offer right through the site.
I see this property for $100,000 and I’m willing to pay $100,000, then it’s mine. It’s not going to go over asking?The cheapest property manager is probably not always the best option. Click To Tweet
No, only people in California asked me that.
I know what the market is like. The price you see is the max you’re going to pay, but it’s possible that if you go, “It’s $100,000. Let me offer $90,000 and see what happens,” then that’s a possibility.
There might be a small disclosure. We have open house properties on our site that’s something a little different. I’d rather not get into it. If someone’s got questions, we can review the exact difference, but there is a small window where you could offer over to the seller and they could choose to accept. That’s only right when a listing comes to the site. Someone is more than welcome to book a call with us. We could walk through anything you’d want to need to know before you make an offer.
I’m sure most people aren’t clamoring to pay over asking. If they want that house, I guess they could.
With the vast majority of homes on Roofstock, you can buy now at the asking price.
What advice would you have for a woman who wants to get started with Roofstock?
First off, be confident. There’s a lot of users on our site. Everyone has access to the same information, so there’s no reason why you can’t get this property if you’ve never owned before versus someone who owns 50 rentals. You can make an offer right through the site. If you’re not too sure where to start, you can connect with my team and we can learn more about your goals and talk about how much funds it would take to get started. We’re not going to push you on a property. We want to make sure you have a great experience on that first home. After that, generally, investors come back more confidently. They already went through the process and they can make offers independently. For that first purchase, we can talk it out on the phone, do a screen share and make sure you move forward on the right one. Generally, just think that even playing fields have total confidence. You can get any home on our site.
What is the minimum amount that somebody could invest for a home on the site?
There’s no minimum. What we generally recommend is $20,000. That’s not a hard number. If you’re thinking simple terms, that same $100,000 property for example, you probably know conventional financing starts at 20% down. I’ve heard you do some great podcasts already about picking the right lender. Twenty percent down, $20,000 liquid. If the home’s under $100,000, you can come in with less, but maybe think about having someone reserve for a cheaper property. We don’t have a minimum amount to invest. That’s the function of down payment and the purchase price.
What about getting financing? You need a mortgage. Does your site help with that too?
Yeah, we’re partnered with several great companies. You can find them right through Roofstock. Whether it’s property management financing or you’re looking at a property, you can pick the third party that you would want to use. I had a few questions about financing from someone who came to our site and I connected them quickly to one of our partnered lenders. He’s already started the prequalification. The ones that are on our site, they’re conventional. Anyone else looking for 640 FICO with probably decent debt to income ratio, we don’t restrict you. You can use alternative lenders if you’d like. Most people I talked to want conventional.
What would a potential investor need to have in place? Probably about $20,000?
It’s not a hard number, roughly.
Keep a goal in mind. You should identify what’s my objective here? Do I want to supplement income? Is this for retirement? Whatever that goal may be, think about what type of property meets that. What budget do I need to get that home? Am I ready to do this now? If it makes more sense to wait a little bit to have the right reserves, that’s fine. You can tell me and we can follow-up a little down the road when you’re ready. I would say $20,000 and ability to qualify for financing or close in cash. We have some properties on our site, a little over cost that are cash-only, which could be an option for some investors as well.
You have some cash-only properties as well?
What are you proudest about when it comes to Roofstock or working there?
First off, we surpassed $1 billion in collective transaction volume within the first two years and that makes us one of the fastest-growing FinTech companies. For me personally, I haven’t been somewhere that has this many females in leadership positions. I’m one of them and being in sales is highly unusual. If there are any other female sales managers out there reading, great job. I’m proud of you doing this here. That’s across the org and it definitely shows in our culture, so I’m proud of that. Quite a few things, working on a product that I would gladly recommend to friends and family. I’ve gotten to sell everything from traditional banking products like money market accounts and CDs. I worked in Forex and hard money. This is one that I would definitely turn around and sell to my parents. That means a lot to me working with people who’ve transacted on the site themselves that I’m proud of. It means a lot to me working in sales.
I found out about Roofstock when I went to a conference called FinCon. It’s where money and media meet for podcasters, bloggers, YouTubers and people like me who talk about finance, investing and money. I love what you guys are doing and it’s super valuable for real estate investor goddesses who are in a market who want some ease and some transparency in finding properties that they can invest in residential properties. Also, finding a property that you feel good about finding. You guys have a guarantee or something with the property.The best investors have a plan and they stick to it. They usually buy a quality property in a quality neighborhood. Click To Tweet
Every property on our site has a 30-day money-back guarantee.
In the rest of real estate, when you close, it’s always buyer beware. I fell in love with what you guys are doing. Real Estate Investor Goddesses partnered with Roofstock. Before we go, we’re going to do our famed end of show trinity, which is a brag, a gratitude and a desire. Maddy, what is your brag?
I am the first female sales manager I’ve ever worked with.
What are you grateful for?
I’m grateful for my company. They set me up with every single way to succeed that I possibly could. I’m grateful for the opportunity to be here. I’m appreciative of that.
What do you desire?
I would like to take title on my first investment property. It’s quite the desire. I’m a little on the younger side, I’m not going to lie, but I have a clear savings plan that a lot of people I know have taken to heart and adopted. It’s getting closer, but that’s definitely what I desire.
So shall it be or so much better than you can imagine. I want to add because we have investing goddesses and investor gods, you have some money in the fund. You’re doing some fund investing and you have some money invested in real estate. You just don’t have a title in your name yet.
I don’t have cashflow, but I have two different credit funding accounts. All of that is great in a time of more detention being drawn to the high-risk crowdfunding accounts.
Thank you for being with us and for giving us all this great information. I look forward to finding out more and you need to join our group to get more inspiration. For anybody out there who wants to join us, you can find links to our community at RealEstateInvestorGoddesses.com. I have an easier link, REIGoddesses.com and you can find out about our Investor Club and our private community on Facebook where we have women from ten different countries. Join us there. For those of you reading, find us on the next episode.