0:00 Buy & Sell Homes Online 3:56 Reimagining the Real Estate Experience 8:11 Phones, Cars, now Homes for Cash 12:55 Convenience and Liquidity with a Cost 17:58 A Modern House of Cards 19:49 Financial 3D Chess & Living on Debt 23:54 Business of Institutional Home Flipping 26:58 iBuying Moats & The Demise of Zillow Offers 💬 Join the Reddit community for additional content & discussion: www.reddit.com/r/modernmba/

I ❤️ Opnedoor. They overpaid for our home in April after the market had already shifted. The house is still on the market and one of the most overpriced houses in town.

hilarious that open door is basically just a silicon valley version of those road median lawn signs that say “i buy your home for cash now!!!”

We sold our home to OpenDoor about a year ago. I estimate that they over paid us by around $50,000. They didn't end up reselling our property for 6+ months.

“The problem with algorithms is that if you feed them garbage, you receive garbage.” - CS101

This is truly a classic “tech” scenario. A lot of hype, some big names, lots of funding, lots of buzzwords, and yet still ripping off the customer and not creating any new value for society.

As a data scientist myself I can tell you these algorithms are usually a lot more raw than they would like you to believe lol

My wife worked for them until a year or so ago. They were astoundingly dysfunctional in so many ways. They didn't have solid, objective ways to evaluate homes, plus with COVID they talked themselves into thinking they could evaluate value without even going inside. They had two groups which didn't communicate at all... The buying side versus the selling. Guess what happens when neither side talks or learns from the other! It was a dumpster fire

Sold my house right at the peak of my neighborhoods pricing. Opendoor has taken a 36k loss so far(and the price keeps dropping every few weeks). My ex girlfriend and I got out of the sale pretty happy since we got to pay off debts and move on to our own lives. We didn't have much time to deal with a realtor and sales process since we were about to hit foreclosure and we'd have to short sale so Opendoor really took one for the team whether they liked it or not.

As a tech worker at a major tech company, I'm really tired of the incestuous logic of SV companies. Even the very initial premise seems very flawed... "I need a quick fast sale of my house" seems a rare scenario compared to "I want to maximize sale value"

Part of the problem with the "algorithm," esp. regarding homes, is that it can't possibly know everything about a particular property. The algorithm probably wasn't, checking for things like: * the frequency and severity of termite infestations for an older wood-frame home in a particular neighborhood (anyone who's lived in my city knows not to buy wood frame houses in a certain zip code because your house will either get eaten out from under you or you'll need to be on a first name basis with an exterminator) * whether an older house still has lead paint in it (A friend ran into this exact problem when she bought a townhome she thought she'd turn into a rental only to discover she couldn't until the lead paint had been removed, an expensive process that requires a certified specialist in her city) * or any number of miscellaneous oddities that might be wrong with a house that the current owner might not even know about no matter how long they've owned the property (my mother has lived in her home for 30 years and didn't realize that her back yard was flooding all the time because of the massive courtyard pavers buried under less than three inches of sand in the yard and only discovered it when she had a landscaper come out to try and fix the flooding). Like, these aren't cars that can be inspected in a day or hardware that has specs published. Some information just isn't available in a database which skews the dataset.

As a realtor, I definitely encourage my clients to aggressively lowball OD listings for a variety of reasons, and it often works out in our favor

The reason local flippers make money is that they know their niche market and do what repairs they can do them selfs and have a contract with friends that own a small house repair company that does the repairs at a large discount. The people that make the real money are the ones who buy fixerupers and rent the houses out for at least two years before selling to save massive amounts of money in taxes. The advantage to this model of flipping is that they can take their time to find good houses and are not always needing to find that next house to flip. Another advantage to this model of flipping is they don't have to do all the repairs right away they just need to get enough done to get the house rented and as the months to years pass do more of the lesser needed repairs to sell the house for top dollar. To rent a house you don't need to do things like replace carpet, or update kitchens & bathrooms, or do any other upgrades that need to be done to sell the house that all can wait to be done for years and can be planed two months in advance when a tenit is moving out if they decide that it's a good time to sell.

I looked at several Opendoor "flips" in the area I used to live in and you are right about minimal capital renovations. They hired the worse contractors who half assed their jobs. Then they expected to get top dollar for their homes.

I have a friend who works for opendoor and while it started out reasonable he now is posting daily instagram stories about how "no guys!! The housing market will not crash at all!! Everything is great because I just updated one of our pricing algorithms so everything is going great!" It's honestly hard to watch because I know that he's smart enough to know its not true but he's too deep in to see the burning forest through the trees.

Ironically the good real estate market screwed them. When the market was as hot as it was, you’d be foolish to not sell it on the open market with multiple bidder even as a FSBO. Anyone who is selling to Opendoor likely had a serious issue that was hidden, in economics this is called adverse selection. They got the lemons, meanwhile their sales data, which had the nicer homes kept pushing valuations up

I think the problem with this model is that housing is treated like a fungible commodity, i. e. each unit is exactly the same as every other unit - shares of stock, bushels of corn, random doodads. That's not the case. The buyers definitely don't look at it that way. That's going to be their home. Every house is unique in terms of location, size, condition, school district, etc. It also seems like a total scam that they make an offer with a 5% commission and then deduct for repairs. That's not flipping. When a house is flipped, the investor takes responsibility for the repairs. I would never deal with this.

In Vegas, it’s known that if your seller’s house is in bad condition or bad neighborhood, you help clients to get offer from Zillow and boom, top dollars for our buyers. It was the best while it lasted!

My son sold his home to Opendoor in March of 2021 in Madison, Alabama. It's still on the market currently for 31K less than they bought it for. The first listing price was 44K more than they paid and Madison is still a solid housing market.

We found Opendoor cool because you could just go up to any of their houses and tour it. Their app allowed you in without making an appt. That was perfect for our schedule. We did buy a house from them at 30k lower than the original listing price. This has been a great house!! I think others skipped buying it because it was ALL royal blue outside. That's been fixed. This was a super buy, right before the market shot up!!

Me and my mom were moving out of a rental and ended up buying a house owned by Opendoor. The inspection found that there was a cable in the AC that had melted through and was causing a burning smell, and the plumbing had to be fixed, on top of the pool being effectively broken because the cleaning system wasn't working. Opendoor wanted to fix *none* of it, and initially refused to do anything, despite the house clearly being both unsafe and at least somewhat unlivable. Fortunately, I am a stubborn asshole, and refused to let my mom even consider accepting that. They tried to give us a whole 2K credit for the repairs (which would have cost around 10,000 just to make the house safe), and we flat out told them they had until the end of the offer period to make a better offer or we walked. That was the most stressful two weeks of our lives, because they refused to communicate with anyone, and waited until the **last day** to finally give us an offer we were happy with, which included them doing the major repairs that were needed. Conclusion: Opendoor is not a real estate company. They are a legal mafia trying to make money by ripping off buyers with lower offers, and sellers by selling them broken homes for more than they're worth. Do not trust them, and if you have to buy from them, do not let them push you to accept their shit, because they will try everything they can to give you the worst deal they can.

Almost bought a home from OpenDoor. Our inspector found significant damage on the roof, as well as a plumbing that was constantly leaking into the foundation.

This same company bought a house near mine for $737,600, wanted to sell it for $776k after "upgrades" still in the market 3 months later now at $692k... Whoops!

At this point I really think that last bit of software that actually revolutionized anything was Word.

My wife and I bought a house back in 2018 and we realized very quickly that most of the people selling their houses to Opendoor were doing so for a reason: they were trying to unload a lemon. Almost all of the houses selling through them were overpriced and in mediocre condition and could easily be skipped in a house hunt.

Buying a home is an emotional experience, reason only takes you so far. The real point of the realtor is to assure the buyer/seller that the transaction is a good one. They have to convince their customer they are getting the best results

God every single tech startup uses the same iconography and graphic design like infographics style it's so depressing :

I drive a lot for work and whenever I need a bathroom just find an opendoor house because they're usually closer. Great places to take a dump. Then I report the pool to the health department because I'm tired of Opendoor letting them turn stagnant and become breeding grounds for mosquitoes.

I work in fixed income portfolio management. Many, many people have tried and failed to ‘solve’ the illiquidity of that market. The fundamental problem is that the more illiquid a market is, the greater the required compensation for the market maker as a reward for inventory risk. That, in turn, means sellers must be willing to accept steep discounts for the convenience of an instant sale. However, most people simply would rather deal with the hassle of a normal sale than sacrifice 5% of a home value or easily several tens of thousands of dollars.

Opendoor was fined $62M by the FTC this morning for cheating and misleading home sellers. "In fact, the complaint states, the vast majority of consumers who sold to Opendoor actually lost thousands of dollars compared with selling on the traditional market, because the company’s offers have been below market value on average and its costs have been higher than what consumers typically pay when using a traditional realtor." Press Release: www.ftc.gov/news-events/news/press-releases/2022/08/ftc-takes-action-stop-online-home-buying-firm-opendoor-labs-inc-cheating-potential-sellers Federal Complaint: www.ftc.gov/system/files/ftc_gov/pdf/Complaint%20%28redacted%29.pdf

I'm in SoCal, and Opendoor owns a bunch of homes here, they were over-bidding during the housing market craze of 2020 - early 2022. They are now selling a majority of them at a loss, many are on the market for well over 100+ days.

As a real estate broker, open door is a terrible broker to deal with because they make their listings nearly impossible to view. For whatever reason they don’t subscribe to the ShowingTime app and insist on agent Calling to make appointments. The call is then handled by an English second language representative. They limit appointment availability to strict hours and limit length of appointments. For being cutting edge, They’re super old fashioned in the showing department. Additionally, all of their listings are over priced and undesirable due to factors that AI wouldn’t understand. Apparently AI doesn’t understand functionality, layout, landmarks surrounding property, ect that humans easily recognize. Opendoor is ClosedDoor for a good reason.

I work in Machine Learning. Your channel is a godsend, because it backs up what I've been pushing for a while. Machine Learning, without understanding the fundamental domain and verifying whether it would be a smart bet, is just a way to burn VC money

tbh their core mistake was trying to do both analytics and actual real estate arbitrage in one business. The analytics could have been its own core product sold to institutional investors and they could have instead provided a platform to connect home buyers and sellers to those investors (kind of like what you see in the loan industry). Acting as a middleman with an immediate value-add product to sell would have made them profitable sooner and lowered their risk exposure. As it is, their business plan was very ambitious but also very stupid.

Before fully watching this video, I keep remembering someone on Twitter commenting on Zillow and giving their own perspective on why it failed so hard. The two main points were: 1) The smallest tiniest flaws in the code that fail to perfectly match up to the actual realities of the market will produce very major losses in profit, and it is very hard to find those ahead of time or even identify the problem afterwards. 2) The market is not full of random noise they can predict the trends of by throwing computers at it, it is full of very hungry sharks that will adapt and pounce on anything you try to do to push the market in a certain direction. The market will react to your presence and exploit the gaps in your strategy, and your actual returns will always be worse than your simulated returns.

An interesting litttle known quirk of the real estate agent model is that it promotes agressive pricing, but moderate negotiation. An agent gets a cut of the home price as their fee, meaning even a 10-20k overbid on market price will only net the agent a few hundred dollars at most. It is therefore much more profitable for them to quickly find a buyer at the best opening price possible, and move on to the next deal. This actually contributes significantly to maintaining some rationality in home prices, and trust in the purchasing system as the agent is able to act quite impartially once the actual offer/negotiation process has begun, prioritising closing the deal over squeezing out every drop of juice. I think opendoor's attempt to become both buyer and seller in two consecutive transactions would have led to gross distrust anyway.

Our OD offer was around $525k for our place (Sacramento Co) back in 2019. 10/19 we sold for $600k with our traditional realtor. The realtor had me dealing with way more stress and wasn't sure about pricing, but I knew we could get a lot more than that instant offer.

Now do Blackrock

Taking an intro to machine learning class. Really snatches the wool out of people's eyes once they realize it's digital Legos that you put together to make a number go down. Don't get me wrong, it's cool, complex, and it's helped solve problems, but it's not this amazing silver bullet that many perceive it to be.

I was well into my 20s when the 2008 housing crisis hit and decimated the market, honestly what's happening now feels much worse in terms of how bad it's going to implode then what happened back then. The large businesses in 'o8 that took the hit got a government bailout to ease the fall but now the market has switches to offloading most if not all of the risk onto customers and smaller businesses which will not be receiving any government aid when things finally do implode.

You aren't tested until a company you own and believe in is down 30-40-50% from its highs. You will question your conviction, your strategy, your process. The market has a way of finding your breaking point. Nothing tests your conviction like falling stock prices.

With Silicon valley's venture capitalists, it feels like they were extremely successful in the beginning when they were unknown and invested in multiple companies giving them several x returns like in Facebook, Google, Amazon etc. but then their success got to their heads and like Bill Gates said, "success is a lousy teacher, it makes you believe you can never lose". They thought everything they touch will turn to gold, since they got so incredibly rich and famous with their past exploits but they forgot "not everything that glitters is gold". I think Silicon valley itself is ripe for "disruption" a word they so love to use for other industries.

this seems like a big tech version of the "cash for houses" signs you see in low income neighborhoods. taking advantage of the disadvantaged

what these "quants" forget is that most models are trend following. they use past data to predict future. crashes in housing market don't happen often. Its like making a model to determine when a volcano will erupt. It might have 100% accuracy for 10 years of predicting the volcano won't erupt. thats the trouble with predicting sparse events.

As one with $5000 or a little above it and given the present economy , is it better to invest into Real Estates or into Stocks. Which would yield better output. Considering a young mid income, short term person living in the US with less time on my hands?

There should be regulation against corporations buying single family homes

I get Open Door stuff in the mail all the time. All I really knew was that their proposed offers were always lowball. Their mailers to me go from the mailbox straight to the recycle can.

I believe that Zillow failed for three reasons: 1) they underestimated the amount of work from actual humans it takes to do all the work required to buy, fix and sell property. 2) they assumed the market would continue to go up and overshot when the market shifted downward 3) interest rate changes raised the cost of borrowing operating capital as well as cooled the entire housing market.

To be fair, some of these businesses are scams from the beginning. Their creators know the company will eventually fail or will likely fail, but as long as they can get rich along the way and get away with it they don’t care. Remember, if you make millions running a failing company then it’s not a failing company.

Unless they're scanning the home with a camera or otherwise creating a massive dataset for each home, I fail to see how AI would provide much benefit.

If we want to talk about making the world a better place with respect to housing, the actual good thing to do would be to increase the supply in high demand areas so that we don’t have people commuting super long distances (thus reducing emissions). But that’s not really a tech problem, of course.

Would you consider doing a video on softbank? Seems like every single unprofitable tech startup gets money from them.

I really wish there was a bigger breakdown of OpenDoors fixed costs. Like 600m for legal, and admin is a HUGE amount. I wonder if OpenDoors is hiding part of their unit costs under “Legal”. It would make sense to add the cost of legal documents for each home bought and sold under a unit cost, but I’m betting they’re bundling it with their administration legal costs to make their numbers more palatable. Otherwise where’s the money going? Maybe It’s executives given high salaries, but when 130m is spent one expensive Tech, and 400m on marketing, I’m struggling to find where the moneys going.

There is repeated mention of the 5% service fee and is continually included in the calculation of how much less OpenDoor will offer you. If you consider (as stated in the video) that a traditional agent costs 5-6%, the service fee is negligible. You will still get a below market offer from the iBuyer, but you will pay someone to sell the house either way. That all said, there are escrow and title companies that have transaction coordinators specializing in for sale by owner transactions. I would encourage anyone looking to sell a home to see if they can do it on their own before forking over several percentage points to someone to sell it for you. Also remember a real estate agent's commission is ALWAYS negotiable.

I've seen several Opendoor houses in my neighborhood. They are always in visibly terrible condition and they sit on the market much longer than the houses with regular realtors.

My mother's home was built in the 1920's and sold for $ 5,000. In 1997, we had trouble selling it for $ 200,000. It is now valued at $1.2 million. Tell me that real estate is a great investment. The probability it will go down in price is much greater than it will increase.

I'd be curious to see the numbers but my gut feeling is that in the end, the real margins, profit, and societal value will only come from flipping houses that are run down and not desirable in the first place, rather than buying a fully functional $250k house, slapping some paint on it, and trying to sell it for $275-300k. In the latter, you're only helping to inflate the values of middle class homes which are increasingly becoming out-of-reach for that middle class to buy. Find a run down home for $75k or less that nobody wants or can live in, collaborate with building companies and turn that into a livable $200-250k home. You'll have way more profit and provide livable homes that were not livable before.

16:39. That's not "extra profit" that money was literally STOLEN from the seller

This is so good. Thank you for the effort. This is better than what I watch in big networks. Hope your channel grows bigger.

Opendoor was taken public by Chamath. I think that's all you need to know.

While listening I went to Opendoor's site for a price on my home. They said they were not Interested in a home built when mine was built, 1925.

Opendoor stock went from about $39 a share in Feb 2021 down to around $5.30 now.

In a traditional sale, you pay cleaning/repairs/staging/etc + 5-6% in realtor fees. A company that offers something close to FMV as a baseline minus 5% fee and repair costs is competitive in the market. There's a "I can take your offer guaranteed, or I can list it and risk getting less or waiting longer to sell" that might make it an attractive option. (If what's going into my pocket is within 1% of what I expect in a realtor facilitated sale, and guaranteed, that doesn't sound like a bad deal).

Zillow is big in the mpls area. Studied market in a particular suburb, since my daughter wanted to buy a house. Found Zillow bought mostly condos and townhomes, and mostly slightly over paid. I think their computers were lumping in town houses with regular houses, which of course sell for more per square foot, because they are more desirable.

I out performed the S&P 500, every hedge fund and every other investor class. What am I? A home owner. But the real joke is of course I’m not a home owner being near Vancouver as a millennial in 2022.

bro im so happy i found this channel cant begin to explain the years i spent looking for content like this

I have been a real estate broker since 1972. I purchased one of the first real estate franchises from Century 21. That was a game changer which used TV advertising and Large scale advertising to gain market share. Flipping homes is a LOCAL BUSINESS not for I buyers, I predict they will ALL fail in a BIG way now that the market has shifted and price reductions are rampant. The only ones that will FAIL on a larger scale are the home builders who will be stuck with thousands of vacant homes they can't sell. Only the idiots in the White House think their house will not sink, But it will!

I toured a couple houses with the open door sign out in the front with my ex. It was nice, I enjoyed walking throughout the homes and it helps me figure out what I like and what I don't.

Your videos are really well put together and informative to watch. Thank you!

This sort of thing adds zero value to the system, just makes things more expensive so the select few shareholders can make a little profit at the expense of you know, houses being remotely affordable

One of the things I really like about this channel is that when the intro ends I realize I’m just watching the intro and not an entire video. I respect that

I did my undergraduate degree in business a decade ago and your videos blow away most of the Harvard Business School cases I've looked at in my classes. You should consider converting some of the research you've done for these videos to business cases you can sell as part of textbooks or something.

Charging a 5% "service fee" is considered a commission under the law, regardless of what it is called. This means Opendoor needs to run each transaction through a licensed RE broker in every State they do business in. For example, as a buyer, you cannot charge the seller a 5% fee contingent on the contract transaction price. If you do, you are violating State law, basically functioning as an unlicensed broker. While functioning as a legal broker/agent, the broker must by law get the highest price possible for the seller, or lowest price possible for the buyer, based on an agent's fiduciary duty to his principal.

Another great delivery by you. Awesome 👏

Thank you for this reveal on Opendoor. I am a buyer in the Jacksonville, FL market. I have been searching since January 2022. I have learned to avoid Opendoor listings in this market because of their complete disregard of buyer intelligence. Opendoor’s laxity, in this market, regarding repairs, is mind blowing: usually lacking all kitchen appliances, closet doors, lawn and pool care, and more. The description of their listings, in this area, are ridiculously lacking in effort, and they continue to list homes above market value. I’ve seen Opendoor listings sitting on the market since January. I avoid these listings like the COVID. It’s a shame. My best guess is that Opendoor is using the repair fees they collect from the cash sale to contribute to their revenue. Opendoor needs to disappear from this market. This area is not in their fortè.

Thanks a lot for the high quality of your content!

This channel is incredible. Thanks for making such high quality content. Very well researched!

There's definitely a market for the self tours their platform offers. I do not want a realtor showing me around. I want to look around myself.

The closing line was wonderful! Great job!

This video was amazing! Keep up the great work.

Thank you for this interesting video. Lots of tech bros but no real estate experts. I worked in the title insurance industry for years, and note some additional problems with this business model. Assuming everything in the video is correct, I wonder if any states where OpenDoor does business care that they're offering appraisal services without a license (unless, of course, they are licensed as appraisers). In my home state, appraisal licensing is taken seriously and enforced strictly. Lawyers doing tax assessment reduction work got in trouble with state regulators for not being licensed appraisers. Also, they might also be within the state regulators' definition of brokers even if they are purchasing the homes themselves--particularly when charging fees that could be deemed commissions, particularly when the rehab fees represent no actual rehab. Further, if they did reduce the "rehab" fees to attract sellers and hid them in title and loan fees as per the video, that would be a RESPA violation. You can't charge fees and then hide them. Someone who paid those fees can make a complaint with HUD, the CFPB or the FTC I would think. Finally, when a buyer purchases a property, does no rehab, and then sells it quickly for a higher price, we used to call that a bad flip or a potentially fraudulent flip (particularly if they claim they did the rehab work), and that type of fraud made up a lot of the 2008 crash problems. To do a legal flip, they should do the work to improve the land to support the end purchase price and inform the end buyer's lender about the flip. The end lender should use that information in their loan underwriting to ensure that the sales price hasn't been inflated to pull down more mortgage funding than the land supports. Aside from legal concerns, I wonder if OD's business model has a built-in problem similar to Heisenberg's Uncertainty Principle: if they offer sellers more to attract the buy business, they're raising the comps and raising their own flip-side prices, which can be seen as good but may be chilling the buy side. On the other hand, if they are lowballing the sellers, they're creating lower comps and lowering their own flip-side sales prices. Their own actions in the local markets affect the local markets.

Oh the schadenfreude! We watched Zillow buy several homes in our neighborhood, then sell them for $10s of thousands of dollars less than they paid.

Great topic, great video. Congratulations on 100k!

Bro I love your channel and this stuff with business. I love listening to your stuff!

In Europe there is a "new business model" (which must be a copycat of a US startup and which is definitely a copycat of time shares...). Basically, the tech company has spotters in France looking for great vacation homes to buy. The startup checks the demand for such asset in its platform (interacted buyers). If they see enough demand, the startup buys the asset and resell it to up to 8 buyers (fractional ownership). The startup provides some other services : they find tenants for the house when possible, they replenish essentials in the fridge before the owners come for their holidays. They also provide an app for all the co-owners to "book" when they want to use the house. What a nonsensical business model...

Your effort is so underestimated, you deserve much more views for your quality content. Thank you

As a realtor I never viewed Open Door a "breath of fresh air". Their work was always crap. Before I knew who they were I wondered how it is they were making money doing what they were doing and now I know, they never were. It was all venture capital coming in an disrupting local markets in a terrible way

I'm always thankful for your high quality videos and thorough breakdowns of company business models. It has become extremely difficult these days to cut through the chaff and find out the truth behind a business' true long-term (or even medium-term) viability, and you provide clear, concise explanations of it all. I think it's frankly sad how much money flows in this direction; it feels like a collective brain fog when there's dozens of productive, sustainable and profitable businesses out there being ignored.

You did an excellent job, concise and comprehensive. I know it’s schadenfreude, but it does give me great satisfaction that greedy people and corporations which are people, fail miserably. The only part I feel bad about is the good people I just wanted to keep their jobs.

I love zillow offers. I sold a home to Zillow October 2021 right before they collapsed and were taking their offers back. They offered 15% over market rate and only $1700 in closing costs. It was insane. Given if I waited 6 more months i would have sold at an additional 10% over what zillow offered but at the time it was incredible. Fast forward to today, I used that money to buy 3 more houses at the peak of the market April 2022 with 5%+ interest rates and im in crippling debt and have had ramen for breakfast lunch and dinner for 7 weeks straight. Youre stupid, im smart.

You make the best videos! Thank you!

You said it all in the last 20 seconds of the video. "Pump and Dump Get Rich Quick Schemes".

this is my favourite channel atm

I sold my house to OpenDoor in 2019 mostly out of convenience. While they did flip it for a higher price a few months later, it wasn't very much -- much less than I was expecting after reading about their business model -- and I've wondered if they actually made a profit.

19:37 as a Patrick Boyle fan, i smiled when I heard "softbank"

It seems like they found a way to get the full 6 percent commission. They are doubling their commission, getting the buyer and sellers agents commission and then when they turn around and sell the home, they save on having to pay commissions to a buyers agent.

These videos are genuinely so good thank you

Why not use the algorithm as a price tool with automated agent tools to link buyers with sellers. I feel like getting into house leveraging is a terrible idea. They could’ve teamed up with rocket mortgage or some other online financier to create a Facebook marketplace of sorts for house buying.

Really fantastic look at a company I have been trying to wrap my brain around. I’m not well versed in reading financial statements so your explanation helps me a great deal. I’m in the market for a house and therefore spend a lot of time bouncing between Redfin, Opendoor, and Zillow looking at what the price history on houses. I often see Opendoor listings with multiple price reductions and relatively high days on market. But my hunt and peck search methods in the apps are anecdotal at best. I am sure the 5% fee and repair money isn’t reflected in the sale price. Just going with my gut feeling I don’t see how this goes well in a rising interest rate environment if house prices drop at the same time. It wasn’t making money before these headwinds were in place, how long can they burn cash before it falls apart?

Anyone in real estate, actual boots on ground dealing with properties, contractors and markets can only just laugh at all this. Great video none the less.