Zillow Announces plans to flip properties

Buying & Selling Real Estate
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Zillow Announces plans to flip properties

John Hatton
Buffalo, NY · Member since 2017 · 4 posts · 2 votes

Zillow announced today it's intent to buy and flip properties in the Vegas and Phoenix markets. What are your thoughts on bigger, brand name movers coming in to an already active market? Obviously, big investors are everywhere throughout the country, but I am curious how some of the more seasoned investors view it

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Patrick Hale
Investor · San Diego, CA · Member since 2017 · 19 posts · 18 votes
8y

My contact at Zillow mentioned this a mainly a play to try to get Seller leads to zillow agents. 97%+ of the sellers that click the button to sell their home ended up not wanting to go through with the zillow instant offer....they then know that the owner wants to sell and send that lead to an advertiser to try to take the listing....

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  • John Woodrich
    Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
    8y
    Originally posted by @Russell Brazil:
    The MLS is not a monopoly. You are free to start your own competitor to it.  You probably underestimate the cost of creating and maintaining an MLS, and the man power associated with doing so though. Tens of millions of dollars and tens of thousands of volunteer hours to maintain it each year.  And there are what, 800 or so mls systems in the country. So multiply those numbers by 800 to get the cost that you would have to come up with to start your own.

    You really think there are Volunteers maintaining the MLS???

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y
    Originally posted by @John Woodrich:
    Originally posted by @Russell Brazil:
    The MLS is not a monopoly. You are free to start your own competitor to it.  You probably underestimate the cost of creating and maintaining an MLS, and the man power associated with doing so though. Tens of millions of dollars and tens of thousands of volunteer hours to maintain it each year.  And there are what, 800 or so mls systems in the country. So multiply those numbers by 800 to get the cost that you would have to come up with to start your own.

    You really think there are Volunteers maintaining the MLS???

    Thats how it works on every MLS I am a member of. I dont get paid to enter data into it any of them.

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  • Leland S.
    Developer · LA, Nashville TN · Member since 2015 · 295 posts · 75 votes
    8y

    I just moved to Phoenix area and the houses that OpenDoor sells are abosolute crap. The cheapest "flip" jobs I've seen and are usually in bad areas or have very difficult features to get around (unsightly neighboring houses, weird additions, next to busy roads). Their pricing stretegy is silly: start out with a ludicrous high number and reduce by ~3k/wk until someone bites. I saw one house they started at 362k in December and is still on the market, down to 326k now and probably not worth 200k IMO. They claimed two rooms out of this sunroom addition where my head hit the ceiling as I walked toward the back of the house. As someone who did a high end flip job and put quality into the result, I hope that these types of flippers lose money and go away. Granted, my experience is with a small sample size.

    I guess this is another way to drive up prices for the average buyer - I don't see how it's creating "more competition", except on the buy side. 

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  • John Woodrich
    Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
    8y
    Originally posted by @Russell Brazil:
    Originally posted by @John Woodrich:
    Originally posted by @Russell Brazil:
    The MLS is not a monopoly. You are free to start your own competitor to it.  You probably underestimate the cost of creating and maintaining an MLS, and the man power associated with doing so though. Tens of millions of dollars and tens of thousands of volunteer hours to maintain it each year.  And there are what, 800 or so mls systems in the country. So multiply those numbers by 800 to get the cost that you would have to come up with to start your own.

    You really think there are Volunteers maintaining the MLS???

    Thats how it works on every MLS I am a member of. I dont get paid to enter data into it any of them.

    You are being paid - as the listing agent on the sale correct????

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y
    Originally posted by @John Woodrich:
    Originally posted by @Russell Brazil:
    Originally posted by @John Woodrich:
    Originally posted by @Russell Brazil:
    The MLS is not a monopoly. You are free to start your own competitor to it.  You probably underestimate the cost of creating and maintaining an MLS, and the man power associated with doing so though. Tens of millions of dollars and tens of thousands of volunteer hours to maintain it each year.  And there are what, 800 or so mls systems in the country. So multiply those numbers by 800 to get the cost that you would have to come up with to start your own.

    You really think there are Volunteers maintaining the MLS???

    Thats how it works on every MLS I am a member of. I dont get paid to enter data into it any of them.

    You are being paid - as the listing agent on the sale correct????

    It seems you are not that familiar with how the MLS get's its data. We enter a lot more data than simply the properties we sell. How do you think all the data on non MLS sales gets into the MLS. Does it magically appear in there? We also go in and correct erroneous data, and enter information applicable as laws change, as school boundaries change, as jurisdictional borders change etc.

    [email protected]301-893-4635Podcast Guest on Show #192
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  • John Woodrich
    Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
    8y

    @Russell Brazil My only off MLS deals were added to the MLS so the agent could get some form of credit for the sale. Maybe he needed it for climbing the ranks of his sales team, I don't know.

    Find it hard to believe people randomly spend their time entering in information that doesn't have an affect on them.  Maybe the school information needs to be updated because of a boundry change and now your listing is in a A+ district instead of a C district...  IDK.

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y
    Originally posted by @John Woodrich:

    @Russell Brazil My only off MLS deals were added to the MLS so the agent could get some form of credit for the sale. Maybe he needed it for climbing the ranks of his sales team, I don't know.

    Find it hard to believe people randomly spend their time entering in information that doesn't have an affect on them.  Maybe the school information needs to be updated because of a boundry change and now your listing is in a A+ district instead of a C district...  IDK.

     A lot of us do volunteer to update the information.  We also volunteer to do a lot of things that we dont get paid for.  I volunteer to lobby.  Im not sure if your profession, a CPA is eligible for the 20% pass through deduction (I think you are not if I remember correctly) but for those that are you can thank the Realtors that volunteered to lobby to get that included in the tax bill as we were the driving force in getting it into the bill.  We volunteer, and we pay money to lobby on behalf of the rights of homeowners and our industry.  Find it hard to believe or not people volunteer to do things that dont have a direct monetary effect on themselves, for the betterment of their industry, which pays bigger dividends than a few bucks here and now.  

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  • John Woodrich
    Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
    8y

    @Russell Brazil your example is lobbying for your own benefit, the 20% deduction :)  Our services qualify like all services to a certain income level, then they are specifically excluded from the deduction.

    I was just curious about all the volunteers who update the MLS without a personal reason to do so (better market data in their area, more comps listed, etc). Guess I still don't understand.

    0Reply
  • Mike DeBuccio Jr.
    Specialist · Tampa, FL · Member since 2018 · 96 posts · 40 votes
    8y

    Hey everyone, I actually replied to another forum about this topic but that forum didn't get much responses.

    Zillow has been planning on coming out with this for awhile. In the sense that they will be buying and flipping properties, that may slightly effect the wholesale industry, but where are they going to get these properties? The best deals are off market- directly from the sellers, and unless Zillow is going to be actively door-knocking, posting craigslist ads, ect, I cannot see them finding these great deals like wholesalers myself find. 

    If they are planning on selling "wholesale properties," I don't believe the margins on the properties they will be offering will be large enough for investors to even consider. It may definitely get in the way when it comes to beginner investors looking immediately to Zillow or Redfin for properties and property values (as they usually do), but for experienced investors I believe they will be able to see right through their deals.

    I'm sure Zillow will launch a massive marketing plan for this platform, and will catch the eyes of many. I think the best approach to this situation is when dealing with (beginner) investors who are referencing properties they have seen on Zillow, show them the margins of those properties compared to properties you are have available. That should provide a quick ending to their arguments.

    2Reply
  • Michael Williams
    Investor · Memphis, TN · Member since 2017 · 100 posts · 28 votes
    8y
    Originally posted by @Russell Brazil:
    Originally posted by @John Woodrich:

    @Russell Brazil My only off MLS deals were added to the MLS so the agent could get some form of credit for the sale.  Maybe he needed it for climbing the ranks of his sales team, I don't know.

    Find it hard to believe people randomly spend their time entering in information that doesn't have an affect on them.  Maybe the school information needs to be updated because of a boundry change and now your listing is in a A+ district instead of a C district...  IDK.

     A lot of us do volunteer to update the information.  We also volunteer to do a lot of things that we dont get paid for.  I volunteer to lobby.  Im not sure if your profession, a CPA is eligible for the 20% pass through deduction (I think you are not if I remember correctly) but for those that are you can thank the Realtors that volunteered to lobby to get that included in the tax bill as we were the driving force in getting it into the bill.  We volunteer, and we pay money to lobby on behalf of the rights of homeowners and our industry.  Find it hard to believe or not people volunteer to do things that dont have a direct monetary effect on themselves, for the betterment of their industry, which pays bigger dividends than a few bucks here and now.  

     Mr Russell, I did not know that but I do know that there are people that dedicate their time for a bigger cause. I must thank you and others like you for what you do. You are correct many times it not just about the benefit of the individual. Please keep up the good work and again thank you and others like you. 

    1Reply
  • Michael Williams
    Investor · Memphis, TN · Member since 2017 · 100 posts · 28 votes
    8y

    Outstanding point 

    Mike DeBuccio Jr.

    1Reply
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