In this interview, a Roofstock executive explains how the company has evolved from a simple transactional marketplace for buying and selling rental homes into a comprehensive real‑estate‑as‑a‑service platform. The shift involved vertically integrating property‑management operations, acquiring the asset‑management app Stessa, and building a massive data engine that maps roughly 90 million U.S. homes, their owners, values, and rental potential. Roofstock now serves both institutional investors—who can purchase hundreds of homes a month—and retail investors, offering transactional services, long‑term management, and SaaS tools. The data and SaaS offerings (including a paid version of Stessa) create new revenue streams that smooth earnings across market cycles, positioning the company for future public‑company aspirations with more predictable earnings.
Chapters
Could you kind of give us like an overview of maybe Roofstock today as a marketplace and maybe touch on the specific aspects of it as a marketplace?
Yeah. So I would say, you know, in the purest sense, I would say we've evolved from being a pure marketplace now to what I would describe as a real estate as a service platform. So I would say we're much more like, you know, a cloud computing company where you can plug into Roofstock, utilize any of our services that you'd like. You rent them, you don't have to buy them, and then you could end up with the product you want, which is leased rental homes that are managed for you. And so, because what we realized was with the, just the pure transactional marketplace, it was great, because you got paid at the transaction, but then we were done. We were handing off people to local property managers and there was this long annuity of additional revenues. And then that relationship we're handing off to someone else who we actually made a sell of our own. So what we decided to do was buy a couple property management companies and vertically integrate more so we could capture more of those dollars and importantly maintain relevance with the customers. And And what we found too is we had great product market fit with institutional investors. We started off thinking we were going to be largely a retail platform. And what we found was, you know, it's, it was really hard to get up to 1,000 retail transactions where we had, you know, one investor a couple years ago that was buying 600 homes a month, right? So it's just enormous capital. So we built the pipes, And figured everything out to be able to offer it to retail. But those same tools at scale we could do for institutions. And so what we realized was if we could develop this platform, we could productize it in different ways for different customers using the same tech stack that we built and all of the things that we learned in the early days of our marketplace. And basically now we can offer transactional services for investors who want to buy or sell. We can offer management services for those who want to own long-term, so they don't even have to buy through us. But our wedge is to take over management of their properties, then start buying more for them. And then we have, you know, a very robust data science operation, which drives all of our business. And that's kind of the edge that we have is we've mapped all roughly 90 million homes in the country. We have, we know who owns them, we know what their value is, we know what the rent is or what the rent could be as a rental. We know how to contact those owners and we know what's going on in all those neighborhoods. So this is a rich living, breathing database. And so that allows us to, for customers who want to participate in our ecosystem, we know that whole, you know, that whole collection of homes that that could be marketplace participants and we could go to them directly and engage with them. And so, we're basically trying to develop connectivity with as many of those owners as we can. We have an asset management software application that we also bought called Stessa that is free and is currently used by, you know, about over $100 billion worth of homeowners. And we get all the data from their rental homes, the rent, the operating expenses, things like that. And we could sell them insurance products, we could sell them other things, but we get all that data that helps drive our models. And so we have this retail, our retail model now is really, let's get all this information from all the retail owners. Let's give them the Stessa software. We actually have a paid version now, so we're starting to monetize it as a SaaS solution. Which is interesting because as you mature as a company too and you have these unique assets, we've had lots of people say, hey, I would pay for this. And so now we're actually starting in a couple of areas of our business to say, hey, if people will pay us for this data and it just makes them more connected to the platform, we could do it. And so the other reason we've moved away from the pure marketplace model is there are times in real estate when transactions go like this, Right? Like now we're in a time when transactions are quite low because there's very little supply, interest rates are high, so transactions aren't really happening. But we have a pretty large property management business now, which is, you know, there's, it does, it's not affected by the business cycle. We've got some of these other areas like our data business that we can do that creates revenue. So it kind of smooths out the variability of our revenues. And that was another reason we've decided to, you know, kind of get into some other business lines is if we want to be a public company someday, we want to have, you know, more predictable earnings. And to the extent we could have some things that aren't all in lockstep, it's definitely helpful.
