Possible new RE Startup called Opendoor

Buying & Selling Real Estate
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Possible new RE Startup called Opendoor

Kwambe H.
Investor · Fredericksburg, VA · Member since 2014 · 13 posts · 2 votes

I noticed an interesting article come across venturebeat today about a new startup that supposedly will make buying/selling homes easier. Being an IT guy and budding investor/entrepreneur, this article piqued my interest. Here's an excerpt that I thought was interesting:

"The startup will “work with sellers directly to purchase home[s],” “work with local partners to rehab, maintain, and improve our portfolio of properties,” and “partner with local brokers and Realtors to market, list on [the multiple listing service], and resell to retail buyers and investors,” according to the site online now at opendoor.com."

Although I'm still learning the ropes when it comes to wholesaling, it would seem to me that this could serve as direct competition to wholesalers. There isn't much info out on the business, so I'm not sure if the business functions within the wholesaler role only, or if just offers an environment for the seller/wholesaler/buyer to interact amongst one another. I was just curious if anyone knew/heard anything about this startup, or had any thoughts on what something like this could mean for the industry if it were to become successful.

Here's the link to the VentureBeat article.

To the mod gods: I posted the link for the sole purpose of discussion. It was not my intention to promote anything outside of said discussion.

Thoughts?

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Grahm Nash
Wholesaler · Fort Worth, TX · Member since 2013 · 8 posts · 7 votes
10y

OpenDoor is HomeVestors, with better funding, better AVMs and thinner margins. 

While OpenDoor will not replace wholesalers, they will make tight markets even tighter - especially in non-disclosure states where accurate comp data is difficult and expensive to obtain - and skinner margins even thinner. 

For a while. Then they will run out of money and fizzle.

A similar effect occurred when Zillow entered the market. Everyone got excited, Zillow was going "disrupt Real Estate," and "change the paradigm," and all the other marketing BS the techno-weenies in Silicon Valley spew about Real Estate (and every other cause celeb bandwagon they jump on trying to make a buck by automating everything - anyone remember web-based grocery deliveries?) BECAUSE THEY DON'T HAVE A CLUE ABOUT HOW REAL ESTATE WORKS IN THE REAL WORLD. 

What lasting effect has Zillow had on the market? Not much, other than to provide one more hurtle investors and Realtors have to overcome when instructing sellers on the true value of their home. "No ma'am, your home is NOT worth 110% of ARV simply because it is yours and it smells like your wet dog."

OpenDoor is already facing huge Realtor backlash (one recently told me "No one in our office will show an OpenDoor listing.") both online and off. That will only grow. And home-sellers desperate to sell will initially light up OD's switchboards - and then blast them on Yelp when they get offers blindly emailed to them that are at the high end of the wholesale spectrum, but without the kiss (building rapport) first to make it palatable.

So go to your local REIAs, talk your wholesalers friends down off the ledge, educate your fellow Realtors and investors, lean your shoulders into this small rain shower, and remind yourself that the "disruptive storm clouds gathering in the distance" are little more than 15 minutes of fame rain shower that will quickly pass over us and then allow us to get back to work.

If there is anything else I can to help you grow your business, please let me know.

Very Best,

-G

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  • Thomas MorrisPro Member
    Investor · Bowling Green, KY · Member since 2013 · 61 posts · 16 votes
    12y

    Sounds like a houseflippiIng company that buys direct from homeowners. I am having difficulty seeing whats so different about the idea. Maybe it is the fact that they plan to market via the internet, but even that is already being done. It does seem that they will have lots of funding, which will make them tough competitors against wholesalers who try to get properties under contract and then find a buyer.

    0Reply
  • Ben Braddock
    Raleigh, NC · Member since 2015 · 54 posts · 23 votes
    10y

    This could be the carmax of real estate.  

    0Reply
  • Grahm Nash
    Wholesaler · Fort Worth, TX · Member since 2013 · 8 posts · 7 votes
    10y

    OpenDoor is HomeVestors, with better funding, better AVMs and thinner margins. 

    While OpenDoor will not replace wholesalers, they will make tight markets even tighter - especially in non-disclosure states where accurate comp data is difficult and expensive to obtain - and skinner margins even thinner. 

    For a while. Then they will run out of money and fizzle.

    A similar effect occurred when Zillow entered the market. Everyone got excited, Zillow was going "disrupt Real Estate," and "change the paradigm," and all the other marketing BS the techno-weenies in Silicon Valley spew about Real Estate (and every other cause celeb bandwagon they jump on trying to make a buck by automating everything - anyone remember web-based grocery deliveries?) BECAUSE THEY DON'T HAVE A CLUE ABOUT HOW REAL ESTATE WORKS IN THE REAL WORLD. 

    What lasting effect has Zillow had on the market? Not much, other than to provide one more hurtle investors and Realtors have to overcome when instructing sellers on the true value of their home. "No ma'am, your home is NOT worth 110% of ARV simply because it is yours and it smells like your wet dog."

    OpenDoor is already facing huge Realtor backlash (one recently told me "No one in our office will show an OpenDoor listing.") both online and off. That will only grow. And home-sellers desperate to sell will initially light up OD's switchboards - and then blast them on Yelp when they get offers blindly emailed to them that are at the high end of the wholesale spectrum, but without the kiss (building rapport) first to make it palatable.

    So go to your local REIAs, talk your wholesalers friends down off the ledge, educate your fellow Realtors and investors, lean your shoulders into this small rain shower, and remind yourself that the "disruptive storm clouds gathering in the distance" are little more than 15 minutes of fame rain shower that will quickly pass over us and then allow us to get back to work.

    If there is anything else I can to help you grow your business, please let me know.

    Very Best,

    -G

    1Reply
  • Kadian F.
    Orlando, FL · Member since 2015 · 79 posts · 21 votes
    10y

    They may be going after a different market than traditional wholesalers as they don't seem to be looking for very distressed properties or situations.  They may also consider themselves more as a tech company than a real estate company, similar to uber and airbnb. 

    I can see how this site would be a very appealing to millennials who like conducting transactions online and on their own time. 

    Opendoor looks good on paper but I'm curious to see how they execute what they're promising, especially in the face of the inevitable backlash they will get from Realtors.

    0Reply
  • Robert AdamsBusiness Member
    Real Estate Broker · Henderson, NV · Member since 2009 · 1k+ posts · 373 votes
    8y

    More info about Opendoor here: https://www.biggerpockets.com/forums/311-buying-selling-real-estate/topics/460236-opendoor-and-offerpad-whats-their-angle?page=1#p3378338

    [email protected]702-349-9175
    The Adams Team at Rothwell Gornt Companies4.971 Reviews
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