--- title: "Roots REIT Buys 41 More Homes From Sponsor-Linked Sellers, Bringing Seven Weeks of Such Purchases to $51 Million" url: https://altstreet.investments/news/roots-reit-41-homes-sponsor-linked-sellers-51m-seven-weeks-2026-10-21 kind: news-article updated: 2026-10-27 description: "Roots REIT bought 41 homes for $11.28M from sponsor-linked sellers on Oct. 15, its third such purchase since Aug. 25, totaling $51.05M across 159 homes." publisher: AltStreet (https://altstreet.investments) license: Public factual pages may be read, quoted and cited with attribution and a link. Bulk redistribution is not permitted. --- # Roots REIT Buys 41 More Homes From Sponsor-Linked Sellers, Bringing Seven Weeks of Such Purchases to $51 Million An October 21 Form 1-U reports $11.28 million paid on October 15 to three sellers tied to sponsor Seed InvestCo. With the August 25 and September 30 purchases, the Atlanta Regulation A REIT has bought 159 homes for $51.05 million from sponsor-linked sellers in seven weeks. By Michael E., Head of Research, AltStreet Research (https://altstreet.investments/authors/michael-e). Published October 27, 2026. Platform: Roots (https://altstreet.investments/platforms/reviews/roots). Entity: Roots Real Estate Investment Community I, LLC (CIK 1866803, https://altstreet.investments/edgar/1866803). Roots Real Estate Investment Community I, LLC, an Atlanta single-family rental REIT that raises money from the public under Regulation A, bought 41 homes on October 15, 2026 for a combined allocated purchase price of $11,281,375.12, according to a Form 1-U filed October 21. Every seller is tied to the REIT's sponsor, Seed InvestCo, LLC. It is the third purchase of this kind Roots has reported since August 25; together the three come to 159 homes and $51.05 million. ## What the October 21 filing shows The filing groups the homes by seller. Flipside 14, LLC, which the filing says is partially owned by Seed InvestCo, sold 28 homes: 26 townhomes built in 2022 and 2023 in Mooresville, North Carolina, a 2024 townhome in Pendleton, South Carolina and a 2022 house in Winston-Salem, North Carolina. Seed InvestCo sold two Georgia houses directly. Cultivate George Fund LLC, which the filing says is wholly owned by Seed InvestCo, sold 11 older houses across metro Atlanta, from Kennesaw and Douglasville to Forest Park and Snellville. Each property carries an 'allocated purchase price', and the Flipside 14 allocations add up to $8,000,000.02, which suggests an $8 million package price divided among the homes. The filing also gives a 'current market value' for each property, without saying who estimated it or how. Totals by seller: | Seller | Relationship stated in filing | Homes | Purchase price | Stated market value | | --- | --- | --- | --- | --- | | Flipside 14, LLC | Partially owned by the sponsor | 28 | $8,000,000.02 | $8,810,000 | | Seed InvestCo, LLC | The sponsor | 2 | $459,901.56 | $533,000 | | Cultivate George Fund LLC | Wholly owned by the sponsor | 11 | $2,821,473.54 | $3,194,000 | | Total | | 41 | $11,281,375.12 | $12,537,000 | Source: Form 1-U filed October 21, 2026 (0001493152-26-047882). Purchase prices are the filing's allocated prices. ## Seven weeks of sponsor-linked purchases Roots' two previous current reports describe the same kind of transaction. A Form 1-U filed September 2 reports that on August 25 Roots bought 53 townhomes from Flipside 14 and acquired two more sponsor-linked entities, Flipside 22 (17 homes) and Flipside 26 (8 homes), outright. A Form 1-U filed October 6 reports 40 homes bought from Flipside 21 on September 30. Earlier 2026 reports describe similar purchases through Flipside 23, 29 and 30, alongside purchases from sellers the filings do not describe as related. The September 2 filing calls Flipside 14 'wholly owned' by the sponsor; the October 21 filing calls the same seller 'partially owned'. Neither filing explains the difference, which matters because it affects the sponsor's economic interest in the seller. The three most recent purchases, as reported: | Closing date | Seller or entity acquired | Homes | Purchase price | Stated market value | | --- | --- | --- | --- | --- | | Aug 25, 2026 | Flipside 14 (homes), Flipside 22 and Flipside 26 (entities) | 78 | $25,219,999.99 | $28,569,000 | | Sep 30, 2026 | Flipside 21 | 40 | $14,550,000.00 | $16,426,500 | | Oct 15, 2026 | Flipside 14, Seed InvestCo, Cultivate George Fund | 41 | $11,281,375.12 | $12,537,000 | | Total | | 159 | $51,051,375.11 | $57,532,500 | Source: Forms 1-U filed September 2, October 6 and October 21, 2026. Figures are sums of the per-property amounts in each filing. ## How Roots accounts for these purchases Roots' manager, Roots REIT Management, LLC, is a subsidiary of Seed InvestCo, which is controlled by Daniel Dorfman and Larry Dorfman, who signed the October filing. The REIT's semiannual report for the period ended June 30, 2026 says that because its sellers are related parties, it must record the homes at the seller's historical cost, its carryover basis, and that the difference between the price paid and that basis reduces the REIT's capital. In effect, any amount paid above the sellers' cost is recorded as a reduction of members' capital rather than as property. That is an accounting treatment, not evidence of overpayment: the sellers' cost, the REIT's carrying value and the stated market value measure different things, and a capital reduction under this method does not by itself show an economic loss. The same report shows money moving the other way. At June 30, Roots held a $30,917,239 note receivable from Seed InvestCo, advances the REIT made to its sponsor for real estate purchases, bearing 7% interest. As a measure of scale, the $51.05 million of sponsor-linked purchases since August 25 equals about 24% of the $213,702,042 of total assets Roots reported at June 30, 2026; it is not a share of the current portfolio, which has grown since. The October filings do not say whether any of the purchases were paid by reducing that note. The 1-SA also sets out fees to the manager. It is entitled to a one-time acquisition fee on each property equal to 3% of 'the initial purchase price paid by the Manager', which came to $618,800 in the first half of 2026 and is capitalized into real estate, as well as a 10% property management fee on rents collected ($757,492 in the same period) and a 3% fee on dispositions. The October filings do not say whether the acquisition fee applies to these purchases or whether it is included in the allocated prices, and its base is the manager's purchase price, not the price Roots paid. ## Why it matters In a REIT that buys from its sponsor, the price is the term investors most need to test. Here the filings set it, the sponsor sits on both sides, and the only benchmark is a market value that the filing does not attribute to an independent appraiser. Stated market values running about 11% above the price are favorable to the REIT if accurate, but the filings give no way to check them, and they do not disclose what the sponsor's entities originally paid for the homes. ## What the filings do not show The October 21 filing does not disclose financing for the purchase, how the market values were set, the sellers' original cost, the size of the sponsor's stake in Flipside 14, whether an acquisition fee was charged or whether the purchases were approved by anyone independent of the sponsor. Nothing in the filings indicates distress or a change in strategy; the 1-SA describes buying from the manager or sponsor as how Roots acquires real estate. ## Key facts - On October 15, 2026, Roots bought 41 homes for $11,281,375.12 in allocated purchase price from three sellers tied to its sponsor, Seed InvestCo, LLC (Form 1-U, 0001493152-26-047882). - Flipside 14, LLC sold 28 townhomes and homes for $8,000,000.02; Seed InvestCo sold 2 homes directly for $459,901.56; Cultivate George Fund LLC, wholly owned by the sponsor, sold 11 homes for $2,821,473.54. - The filing lists current market values totaling $12,537,000, 11.1% above the price paid; it does not say how they were determined. - Since August 25, Roots has reported 159 homes bought for $51.05 million from sponsor-linked sellers, about a quarter of its $213.7 million of total assets at June 30, 2026. - The September 2 filing described Flipside 14 as wholly owned by the sponsor; the October 21 filing describes it as partially owned. ## Sources - Form 1-U, Roots Real Estate Investment Community I, LLC (Oct. 21, 2026): https://www.sec.gov/Archives/edgar/data/1866803/000149315226047882/form1-u.htm - Form 1-U, Roots Real Estate Investment Community I, LLC (Oct. 6, 2026): https://www.sec.gov/Archives/edgar/data/1866803/000149315226045963/form1-u.htm - Form 1-U, Roots Real Estate Investment Community I, LLC (Sept. 2, 2026): https://www.sec.gov/Archives/edgar/data/1866803/000149315226041171/form1-u.htm - Form 1-SA, Roots Real Estate Investment Community I, LLC (period ended June 30, 2026): https://www.sec.gov/Archives/edgar/data/1866803/000149315226044493/form1-sa.htm ## SEC accession numbers - 0001493152-26-047882 - 0001493152-26-045963 - 0001493152-26-041171 --- Source page: https://altstreet.investments/news/roots-reit-41-homes-sponsor-linked-sellers-51m-seven-weeks-2026-10-21 Machine index: https://altstreet.investments/llms.txt AltStreet reads what platforms, funds and issuers file with the SEC and what they tell investors, and publishes the difference. Figures are as filed or as captured on the date stated; nothing here is investment advice.