Daniel Dorfman: The Fund That Lets You Build Wealth While You Rent
Every night, Daniel Dorfman would lay down and run the same mental math. The real estate portfolio he and his wife had built was performing well. The asset class was working exactly the way it was supposed to. And the renters in his buildings were getting further and further away from ever being able to access it.
That tension did not go away. It got worse.
The hurdle from renting to homeownership is steep. The hurdle from homeownership to real estate investor is steeper. The minimum down payment on a first investment property is 20 percent, and that is before you account for underwriting, maintenance reserves, property management, and the reality that one broken AC unit can wipe out an entire year of cashflow on a single-asset portfolio. The system that had built Daniel's wealth was, by design, very hard for most people to enter.
So during COVID, with a whiteboard and no commute traffic to interrupt his thinking, he started working on a different model. The result is Invest With Roots, a Reg A investment fund that lets anyone in the United States invest in real estate starting at one hundred dollars. But the structure is not just about fractional ownership. It is about rethinking who the real estate investment equation benefits and how.
Why Fractional Real Estate Was Not Already Everywhere
The idea of making real estate investing as accessible as Robinhood or Acorns seems obvious in retrospect. You can own a fraction of one hundred thousand dollars worth of Bitcoin without buying the whole thing. Why not do the same with a rental property?
The reason it had not been done at scale comes down to regulatory cost. To offer investment participation to non-accredited investors, meaning the roughly ninety percent of Americans who have not hit the income or net worth thresholds the SEC uses to define financial sophistication, you have to do what is called a Reg A offering. It is almost as involved as going fully public. By the time Daniel had worked through the process, the legal and filing costs were approaching four hundred thousand dollars, and that is before any ongoing compliance upkeep.
Most people put their pencils down at that point. The margins on a real estate investment product do not obviously support that kind of overhead. Daniel did not put his pencils down. He got more frustrated. And then he built a technology company alongside the fund to change the math.
He also noticed the contrast that kept him going: there is zero regulatory burden on scratch-off lottery tickets. You can promote a product with nearly no odds of return, no disclosure requirements, and no oversight. But offering lower-income Americans a chance to invest in a stable, income-producing asset class? That requires four hundred thousand dollars just to get started. The frustration of that gap was, he says, the fuel.
The Program That Makes It Actually Work
Invest With Roots is built on a premise that most real estate fund managers overlook: the people living in the building are the most important variable in whether the asset performs.
Location matters. Underwriting matters. But a renter who pays on time, reports small maintenance issues before they become large ones, and renews their lease is worth more to an asset's performance than almost any other factor an operator can control. Daniel had seen this repeatedly across his and his wife's previous book of business. So instead of treating renters as a cost center or a risk to manage, Invest With Roots built a program that treats them as partners.
The program is called Live In It Like You Own It. Renters in Roots buildings can earn rewards for three things: paying rent on time, submitting a short quarterly video showing the condition of the unit, and renewing their lease. Those rewards accumulate and can be invested directly into the Roots fund under the renter's name. Renters can also opt to invest their security deposit into the fund rather than leaving it in a standard escrow account. On-time rent payments are reported to credit bureaus. Financial education modules are available through the platform. Credit monitoring is included.
The economics are designed to be self-funding. The rewards Roots pays out replace costs that most operators absorb anyway. Every filter change that a maintenance crew handles at a hundred dollars a visit. Every time a service provider shows up and finds additional things to address. That money gets redirected toward the people who already live there and have the most information about the condition of the property.
What the Numbers Actually Look Like
The average renter in the United States today has less than seven hundred dollars in savings. That is one medical bill away from a genuine crisis. Roots residents who go through the full program, investing their security deposit, earning monthly rewards, and participating in the quarterly reporting, can accumulate somewhere between six hundred fifty and eight hundred dollars in rewards per year, independent of any fund growth.
Over three years, a resident who starts with a twelve hundred dollar security deposit invested in the fund, earns rewards consistently, and stays through renewal cycles will typically grow from that twelve hundred dollars to close to four thousand dollars. The partnership with Movement Mortgage gives qualifying residents a one thousand dollar closing credit, which in many cases gets them within range of the three to three and a half percent down payment required on a primary residence loan.
The mission, as Daniel describes it, is not to keep renters in the fund forever. It is to use the fund as a bridge to homeownership for people who would not otherwise have a path to get there.
Daryl is the story Daniel tells to make this concrete. When Daryl moved into a Roots property, he had a 520 credit score and around seventeen hundred dollars in savings. Two years later, he had a 750 credit score and over five thousand dollars saved. He is now shopping for a house. That outcome, Daniel says, is the whole point. If it only happened once, they would still consider it a success.
The Scale and the Returns
Invest With Roots launched five years ago with zero properties and zero investors. It now owns roughly seven hundred doors and has another six hundred under contract or in the pipeline. The investor base has grown to approximately one hundred fifty thousand people, with the vast majority joining in the last two years.
For investors in the fund, Roots targets twelve to fifteen percent annual returns. They have hit that range every year since launch. The community of investors is, Daniel says, unusually aligned with the mission. They want returns, and they are also genuinely invested in seeing the renters succeed. When the model works, those two things are the same.
How Real Estate Agents Can Get Involved
For real estate agents listening, Daniel outlines three distinct entry points at investwithroots.com/partners.
First, Roots is always buying properties. Agents who understand the fund's buy box can bring deals directly.
Second, there is an affiliate partner structure. Agents can introduce Roots to clients who are not yet ready to buy. The platform helps those clients build credit, accumulate savings, and understand real estate investing from the inside while they are still renting. Better-prepared buyers eventually become commission-generating clients. It is, as Daniel describes it, a nurture tool that actually does something instead of just sending map alerts and monthly market reports.
Third, agents can invest in the fund themselves. The minimum is one hundred dollars. For agents who are not yet invested in real estate beyond their own homes, Roots is a way to learn how the asset class works from the inside, see the properties being acquired, track the returns, and understand the model firsthand.
There is also a nonprofit arm called freerent.org that focuses on rent relief for people who have hit smaller setbacks rather than full crises, working upstream of the organizations that handle homelessness and major emergencies.
To learn more or get involved, visit investwithroots.com. Agents interested in the partner program can go directly to investwithroots.com/partners.
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Justin Landis is the founder of Justin Landis Group and Bolst, two of Atlanta's leading real estate companies. He lives in Atlanta with his wife and three daughters and has been selling Atlanta real estate since 2008.
