Roofstock’s Gary Beasley (Roofstock, iStock)
It’s heady occasions within the single-family rental market.
Roofstock, a web-based market for traders within the asset class, raised $240 million from SoftBank’s Imaginative and prescient Fund 2 and others in a Collection E spherical — greater than doubling its fairness funding — at a valuation simply shy of $2 billion.
The Oakland-based firm’s $1.94 billion valuation greater than triples the $600 million valuation given on the time of its $50 million Collection D in January 2020. Roofstock claims it almost tripled its income in 2021 whereas facilitating greater than $2.5 billion in offers for single-family leases.
“There has by no means been a time fairly like this for single-family actual property,” co-founder and CEO Gary Beasley mentioned.
As nationwide rents surged to new data final 12 months, traders looking for passive revenue piled into the single-family market — whilst residence costs additionally spiked. Actual property traders accounted for a report 18.4 % of all U.S. residence gross sales within the fourth quarter, up from 12.6 % within the fourth quarter of 2020, in response to Redfin.
Low- and mid-priced properties — Roofstock’s focus, within the $150,000 to $400,000 vary — have been particularly common, accounting for greater than 70 % of investor purchases within the quarter.
Softbank led the Collection E, with participation from new and current traders together with Kohla Ventures, Lightspeed Enterprise Companions and Bain Capital Ventures. Industrial actual property large JLL bought a minority stake in Roofstock final March in a deal that coincided with Roofstock’s acquisition of JLL’s rental administration platform Stessa.
The corporate goals to double its headcount this 12 months and pursue “strategic M&A.” Targets might embrace property managers, Beasley mentioned.
In a bid to broaden its buyer base, Roofstock final 12 months launched a fractionalization service, permitting traders to wager as little as $5,000 on a specific property. That endeavor competes with funding platform Fundrise and Jeff Bezos-backed Arrived Properties.
The corporate additionally has ramped up its iBuying exercise — algorithm-based homebuying, renovating and flipping — to spice up liquidity in its market. Whereas Zillow’s dramatic exit from the enterprise final fall laid naked its dangers, Roofstock says its distinctive strategy, during which it buys properties with renters in place, helps offset the uncertainty and the prices of carrying the properties on its steadiness sheet.
“It actually helps us appeal to and put product on the cabinets we all know our clients need,” Beasley mentioned.
The corporate is “placing the constructing blocks in place” to go public, and a 12 months in the past weighed the choice of a SPAC merger earlier than the underside fell out of that mannequin, Beasley mentioned. However the firm is just not prone to take both route this 12 months.
“Public is form of a four-letter phrase lately, I believe,” he mentioned.
