iBuyer or iFlipper? Let’s Look Under the Hood.

This week, there was breaking news about an iBuyer receiving $325m in series “E” funding as well as lots of talk about their business model and game plan. Given all the buzz, I thought it would be a good time to spend time under the hood, to understand how this motor is put together!

First observation:

Opendoor is not just an iBuyer, but also an iFlipper. Opendoor’s model buys homes from homeowners, and then renovates and sells them under Opendoor Homes. Opendoor Homes disclosure for their Florida operations reveals to buyers that they are similar to a home-builder with a brokerage that lists its properties. While Opendoor and Opendoor Homes are separate entities, they are affiliates. Interesting.

Opendoor - Which door to flip!Since Opendoor is operating similar to a home-builder, they are able to include properties in the MLS. In my data sampling of listings, they are offering compensation to the sell side of 3%.

Opendoor promises its buyers with an improved experience through its Opendoor Home technology. There is no need to schedule showings of the property – the home is vacant and is available for buyers to walk-through at their leisure. The home is available for viewing from 6:00 am until 9:00 pm – 365 days a year. No more emails, phone calls, rescheduling of showing appointments, and no more uncooperative sellers and agents. A win-win for buyers.

The mobile app

While talking about the Opendoor Home’s technology, let’s view the drive chain – Continue reading