Larry Dorfman, Co-Founder of Roots, believes everyone should have the opportunity to invest in and build wealth through real estate…especially the residents paying rent. In this captivating episode, we explore the groundbreaking vision of Roots. Discover how their innovative approach transforms renters into owners and partners, aligning the incentives of investors and residents for mutual benefit.
Episode Highlights Here:
Larry
We wanted to make it available to everyone who had had so much fun in the Robin Hood’s of the world and an acorn and other things, which are not bad products are just a lot of different products available to a lot of different people. But real estate typically is not to the average American.
Brett
What’s the next best secret to understanding how to make an impact with your real estate investing?
Larry
Well, I think one of the things was to make sure that many of the funds that we’re able to invest in these days, there are so many fees on the front end of the fund, that by the time you start, you’re in the hole three or four points. The one I really liked the most is the investment management fee, which can be, as you know, a half a point to a point and a half and a big read. And I was trying to figure out what they were managing after we already made the decision to invest a couple 100 grand, let’s say, in a beat, and the reason that they gotta charge at some point, you know, every year to manage the money, but we already know where it is and make no sense. So some very unique structures in the real estate investment community, one, there are no fees to come in, there’s no carry. So the general partners don’t let the limited partners make a certain amount of money and then grab the rest of it, or a majority of the rest of it. If you stay in the Fund for a year, which gets you to your capital gains level, there are no fees to exit. And then another very unique function because most REITs, as you know very well, Brett, you know, you go into them thinking two, three years, minimum 567 years, possibly single building REITs. In particular. In this particular case, we wanted to build a process. First of all, this is reggae fun, which means that anybody can invest as little as $100. In real estate that’s not very often that that’s available, everybody getting exactly the same returns for their $100, $100,000 or a million dollars. And we wanted to make it available to everyone who had had so much fun in the Robin Hood’s of the world and an acorn and other things, which these are not bad products, just a lot of different products available to a lot of different people. But real estate typically is not to the average American. You know, most people you talked about you talk to high net worth people. And we’re all able to be as accredited investors invest anything we want to. But if you take the average American, who has, as I said, less than $650 in their bank account, if they’re a renter, or less 69% of Americans have less than $1,000 in cash available to that fact from Money Magazine. I mean, how do they build wealth from there? And so creating that vehicle, we wanted to make sure that there were no footnotes, no cost to get in, no cost when you want to leave. And we also wanted to make it a little more liquid than most. So we actually have a redemption period each quarter where any individual can redeem up to $100,000 worth of their stock at current nav net asset value. That’s very unusual. And the max that can be redeemed in a quarter is 5%. The fund obviously can’t let it all get diluted at one time. But I’m frankly the people who have invested to date most are accredited investors we have done no marketing. This started in July of last year, we raised about nine and a half million dollars simply through word of mouth and conversations, about 85-90% of it with accredited investors. pretty bright ones in fact, but we just started doing our social media and we got our platform and our software in place. So that literally you can go to invest with rootstock calm and we call it the happy path. You can invest as little as $100 in a couple of minutes and just do it
Brett
very cool. Very cool. So it seems like you’ve only connected the impact but you’ve connected the actual I think ease and accessibility right for people to make the impact on as little as $100 investment which is really cool as well don’t have to be accredited investors to go into it. And you can get you know some called semi liquid right once a quarter you can redeem to certain amounts, which is pretty cool.
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About Larry Dorfman
Larry Dorfman is the Co-Founder and former Chairman/CEO of APCO Holdings, Inc. Founded in 1984, APCO holdings delivers the EasyCare, GWC, MemberCare, and Covideo brands to OEM’s, dealers, and customers in the automotive and RV industry. He led the company through its initial public offering (IPO) in 1988 and subsequent purchase by Ford Motor Company in 1999. Larry and management bought APCO back in 2007 with Stone Point Capital equity partners and transacted again in 2016 with Ontario Teachers Pension Plan (OTPP). During his 35 years with the company APCO has been a consistent Top 100 Company to Work for nationally, enjoyed 90%+ Employee Engagement scores, and is one of the Healthiest Places To Work nationally. He is also an investor and a member of the Board of Directors for Ranger Distribution, Inc., on the Board of Directors for Because I Said I Would (becauseisaidiwould.org), an organization and social movement committed to the betterment of humanity through the making and keeping of promises, and the founder of www.sharethelearning.com – a website dedicated to sharing a broad spectrum of learning among people who have a strong student mentality.
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