Kim-Mai Cutler via TechCrunch
Keith Rabois’ Homebuying Startup OpenDoor Raises $9.95M From Everyone
“Before you start worrying about real estate speculators, OpenDoor is launching in three markets outside of California and is only for owner-occupied homes. Co-founder Eric Wu did not specify which markets, but he said the company is more concerned with markets where there isn’t a lot of liquidity or demand.”
“In contrast, Wu said the rest of the $20 trillion U.S. residential real estate market is one of the least liquid kinds of markets even though it represents such a vital kind of asset to Americans across the country. He argues this lack of liquidity ties people to debt and jobs or locations that may not benefit them anymore. Real estate transactions often take more than 90 days and homeowners often don’t have enough capital for a down payment or a mortgage, which makes home buying stressful.
Wu didn’t go into how the product will work, because it has yet to launch.”
I’m must be missing something. Just because you make it easier to buy a turd, doesn’t mean people will start buying lots and lots of turds.
UPDATE: 2/10/24 – Drew Meyers of GeekEstate Blog has a few ideas of how this might work. – And I still don’t get it.
You’re missing something.
@Galen Okay Obi-wan educate me. Seems like a lot of smart people are investing so what am I missing?
I’m not sure I get Drew Meyers take, which is: We Buy Ugly Houses, aggregated.
Since Eric Wu stated: “…the company is more concerned with markets where there isn’t a lot of liquidity or demand”
then it’s hard to imagine Drew’s guess:
“They will have to attract a heavy investor crowd to fill the demand side of the equation”.
Perhaps they are planning to buy houses that fit a certain profile and flip them into a rent-to-own scenario (being tried in AZ and other areas) and fill the demand from the boomerang buyers. It address the other things mentioned in Wu’s quote: “…don’t have enough capital for a down payment or a mortgage”.
I’m looking forward to hearing what they’ve come up with since some smart people are liking the pitch.
My take is not we buy ugly houses. My take is “we buy any house…at a discounted rate over what you would get by going through the formal process of listing / selling the house w/ an agent”.
@Drew You just described the We Buy Ugly Houses model. I think you are taking the name too literally. Sometimes it’s the situation that’s ugly, not the house. In any case, if the numbers work they’ll make an offer…even on pretty houses.
One difference is that OpenDoor says they are sticking with single family homes, where We Buy Ugly Houses (HomeVestors) also buys condos and town homes.
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