--- title: "Roots REIT Buys 78 Homes From Sponsor-Owned LLCs for $25.2 Million, Its Largest Acquisition Report Yet" url: https://altstreet.investments/news/roots-reit-form-1u-sponsor-affiliated-property-acquisition-september-2026-2026-09-02 kind: news-article updated: 2026-09-16 description: "Roots REIT's Sept. 2 Form 1-U: 78 homes bought Aug. 25 for $25.2M from three sponsor-linked Flipside LLCs, its largest single acquisition filing; stated value $28.6M." 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 78 Homes From Sponsor-Owned LLCs for $25.2 Million, Its Largest Acquisition Report Yet A Form 1-U filed September 2 shows the Atlanta Regulation A REIT paid about $25.2 million on August 25 for 78 homes and townhomes in four states, all from Flipside LLCs wholly or partly owned by its sponsor, Seed InvestCo. The filing states a combined current market value about 13% higher. It does not say who valued the homes, what the sellers paid for them, or how the purchase was financed. Published September 16, 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, the Regulation A REIT that retail investors know as Roots, paid about $25.2 million on August 25 for 78 single-family homes and townhomes in North Carolina, South Carolina, Tennessee and Georgia, buying every one of them from limited liability companies wholly or partly owned by its own sponsor, Seed InvestCo, LLC, according to a Form 1-U filed with the Securities and Exchange Commission on September 2, 2026 (accession 0001493152-26-041171). It is the largest single acquisition the fund has reported in a current report since it began buying homes in 2022. ## What the filing shows The filing contains three Item 1 disclosures, one per seller, each listing property addresses, an allocated purchase price and a stated current market value. The per-property prices are allocations of three round totals: $14,825,000, $7,000,000 and $3,395,000. Summed, the fund paid $25,220,000 for homes the filing values at $28,569,000, a gap of $3,349,000 or 13.3%. The filing does not say who produced the market values or when. - Flipside 14, LLC, wholly owned by the sponsor: 53 townhomes in Mooresville, Salisbury, Statesville and Shelby, North Carolina, and Pendleton, South Carolina, bought from the LLC for $14,825,000 against a stated value of $16,975,000. - Flipside 22, LLC, partially owned by the sponsor: 17 homes on Norman Drive in Spring Hill, Tennessee, acquired by buying the LLC itself, allocated at $7,000,000 against $7,940,000. - Flipside 26, LLC, partially owned by the sponsor: 8 homes in Gainesville, Monroe and Cornelia, Georgia, also acquired by buying the LLC, allocated at $3,395,000 against $3,654,000. ## Background The two partially owned sellers were acquired as entities rather than home by home, so the fund now owns whatever else those LLCs hold or owe; the filing lists only the properties. Flipside 14's homes, by contrast, were bought 'from' the LLC. Roots is a Georgia LLC formed December 8, 2020 that elected REIT status and sells $100-minimum units under Regulation A Tier 2, first qualified June 21, 2022 and most recently requalified May 11, 2026. It is externally managed by Roots REIT Management, LLC, a wholly owned subsidiary of the sponsor, whose principals Daniel and Larry Dorfman also run the sponsor's other businesses. The unit price, set quarterly by the Manager, has been $155.30 since July 10, 2026. Buying from the sponsor is the fund's disclosed operating model, not an exception. Per the offering circular, the sponsor and its Flipside-numbered special-purpose vehicles acquire homes, renovate them, obtain a third-party certified appraisal and sell them to the fund at or below appraised value; the sponsor's gain over its all-in cost is disclosed annually in dollars, $1,492,488 for 2024 and $9,274,815 for 2025. The fund also finances that pipeline. Note 5 of the FY2025 Form 1-K shows $31.4 million advanced to the sponsor at 7% interest at December 31, 2025, up from $14.5 million a year earlier, producing $1.55 million of related-party interest income. The same annual report shows revenue of $7.6 million, mortgage debt that tripled to $88.7 million, interest expense of $3.49 million against net operating income of $1.74 million, and a $2.42 million net loss. AltStreet's Roots review sets out the structure and the arithmetic. The Flipside names are also the fund's accredited lane. The Roots app sells short-term Flipside equity deals to accredited investors at 16% to 19% targeted net returns, and the platform states that those deals purchase property targeting an exit to the Roots REIT. AltStreet located no Form D filings for any Flipside SPV, including 14, 22 and 26, and has not matched individual LP deals to individual REIT purchases. ## The pattern in AltStreet's data AltStreet's tally of the fund's Form 1-U record, 26 Item 1 current reports since September 2022, ranks this filing first by stated market value at $28.6 million; the next largest were $23.4 million (filed December 23, 2025) and $20.6 million (March 23, 2026). Essentially every acquisition report since 2022 names Seed InvestCo or a Flipside SPV as seller, at prices at or below the stated values. The June 26 purchase of 12 homes from Wickenden Partners, LLC ($7.2 million, filed July 2) is the one recent third-party exception. The pace has picked up. Across three filings covering June 26 to August 25, 2026, the fund reported about $46.6 million of completed purchases: the Wickenden homes, properties acquired through Flipside 29 and Flipside 30 ($14.2 million, filed August 6), and the 78 homes here. That is more than six times the fund's total revenue for all of fiscal 2025. The filings do not state how the purchases were financed; the FY2025 annual report's subsequent-events note disclosed a further $12.6 million loan in March 2026. ## Why it matters Related-party purchases are the first item of diligence on a non-traded REIT, and Roots discloses more about its version than any residential peer AltStreet has reviewed: the seller on every acquisition, the appraisal ceiling, the sponsor's gain in dollars. This filing is that structure operating at its largest scale to date, on top of a balance sheet where leverage tripled in 2025 and operating income did not cover interest expense before the sponsor's 7% payments. The 13% gap between cost and stated value reads as favorable to unitholders on its face, and it is consistent with the disclosed at-or-below-appraisal rule. What it cannot show is what the sponsor and the Flipside investors paid for the homes, or how much of the gap will reappear as the sponsor's built-in gain when the 2026 figure is disclosed. For the two partially owned sellers, the same transaction is an exit for accredited Flipside investors and a purchase for retail REIT investors, priced by the group that manages both. ## What the filing does not show The Form 1-U does not disclose what Flipside 14, 22 or 26 paid for the properties, how long they held them, or whether the sponsor or LP investors realized a gain; the sponsor's percentage ownership of Flipside 22 and 26; the appraiser, valuation date or method behind the current market values; whether any independent party reviewed the terms; how the $25.2 million was funded; or rent, occupancy or income for the homes. Because Flipside 22 and 26 were acquired as entities, the filing also does not disclose any other assets or liabilities those LLCs carried. The ranking of this filing as the fund's largest rests on AltStreet's reading of the fund's own Form 1-U record by stated market value; earlier filings format purchase prices differently and were not all re-summed at cost. This article describes the transaction as the filing states it and does not characterize its fairness, which the filing does not address. ## Key facts - Form 1-U filed September 2, 2026 (accession 0001493152-26-041171) reports three acquisitions completed August 25, 2026: 53 townhomes from Flipside 14, LLC (wholly owned by sponsor Seed InvestCo, LLC), 17 homes through the purchase of Flipside 22, LLC, and 8 homes through the purchase of Flipside 26, LLC (both described as partially owned by the sponsor). - Allocated purchase prices sum to $14,825,000 (Flipside 14), $7,000,000 (Flipside 22) and $3,395,000 (Flipside 26), $25,220,000 in total. The filing's stated current market values sum to $16,975,000, $7,940,000 and $3,654,000, $28,569,000 in total, 13.3% above cost. - Properties: townhomes and homes in Mooresville, Salisbury, Statesville and Shelby, North Carolina, and Pendleton, South Carolina (Flipside 14); 17 homes on Norman Drive in Spring Hill, Tennessee (Flipside 22); 8 homes in Gainesville, Monroe and Cornelia, Georgia (Flipside 26). - By stated market value this is the largest single acquisition report in the fund's Form 1-U record. AltStreet's tally of the fund's 26 Item 1 current reports since September 2022 puts the next largest at $23.4 million (filed December 23, 2025) and $20.6 million (filed March 23, 2026). - Across three filings covering June 26 to August 25, 2026, the fund reported about $46.6 million of completed purchases: 12 homes from third-party Wickenden Partners, LLC ($7.2 million, 1-U filed July 2), properties acquired through Flipside 29 and Flipside 30 ($14.2 million, filed August 6), and these 78 homes ($25.2 million). - Per the FY2025 Form 1-K (accession 0001493152-26-020769), the fund had $31.4 million advanced to the sponsor at 7% interest at December 31, 2025, mortgage debt of $88.7 million and a $2.42 million net loss. The offering circular's compensation table discloses the sponsor's built-in gain on property sales to the fund at $1,492,488 for 2024 and $9,274,815 for 2025. - The unit price has been $155.30 since July 10, 2026, per a Form 1-U filed July 13, 2026. ## Sources - Form 1-U, Roots Real Estate Investment Community I, LLC, September 2, 2026 (Flipside 14, 22 and 26 acquisitions): https://www.sec.gov/Archives/edgar/data/1866803/000149315226041171/form1-u.htm - Form 1-U, August 6, 2026 (Flipside 29 and 30 acquisitions): https://www.sec.gov/Archives/edgar/data/1866803/000149315226036317/form1-u.htm - Form 1-U, July 2, 2026 (Wickenden Partners acquisition): https://www.sec.gov/Archives/edgar/data/1866803/000149315226031858/form1-u.htm - Form 1-U, July 13, 2026 (unit price $155.30 and quarterly distribution): https://www.sec.gov/Archives/edgar/data/1866803/000149315226032995/form1-u.htm - Form 1-K for fiscal 2025, filed April 30, 2026 (Note 5, Related Party Arrangements): https://www.sec.gov/Archives/edgar/data/1866803/000149315226020769/ - Offering circular, May 12, 2026 (sponsor compensation table): https://www.sec.gov/Archives/edgar/data/1866803/000149315226022456/form253g2.htm - Roots Review 2026: the sponsor pipeline, the 7% advances and the FY2025 arithmetic: https://altstreet.investments/platforms/reviews/roots ## SEC accession numbers - 0001493152-26-041171 --- Source page: https://altstreet.investments/news/roots-reit-form-1u-sponsor-affiliated-property-acquisition-september-2026-2026-09-02 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.