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Old 01-25-2018, 04:37 AM
 
Location: Cary, NC
31,594 posts, read 55,307,520 times
Reputation: 30150

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So, Lennar collects on both sales, and gets assurance that their contracted buyer will have funds to close.
Slick. Smart.

https://therealdeal.com/2018/01/24/o...for-expansion/
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Old 01-25-2018, 05:00 AM
 
33,035 posts, read 12,497,258 times
Reputation: 20934
Sweet deal.

Saves a lot of work and worry.

Surprised to read that OpenDoor invests in repairs.
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Old 01-26-2018, 07:42 PM
 
Location: Cary, NC
31,594 posts, read 55,307,520 times
Reputation: 30150
Quote:
Originally Posted by GotHereQuickAsICould View Post
Sweet deal.

Saves a lot of work and worry.

Surprised to read that OpenDoor invests in repairs.
Actually, I would expect any well-funded buyer to invest in repairs, rather than demanding repairs from sellers.
And, to purchase the property at a price that will recognize those repair costs.
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Old 01-29-2018, 07:43 AM
 
Location: Phoenix AZ
5,920 posts, read 10,440,488 times
Reputation: 9226
Quote:
Originally Posted by MikeJaquish View Post
Actually, I would expect any well-funded buyer to invest in repairs, rather than demanding repairs from sellers.
And, to purchase the property at a price that will recognize those repair costs.

I've watched a couple of open-door acquisitions from the sidelines in Phoenix over the past year - it appears they're paying too much for acquisitions & sitting on rehabbed properties longer than a true flipper would. The properties I've watched still had a tiny bit of (apparent) profit in them, but mostly because the market is so hot & appreciating monthly. I don't think the business model works anywhere except the hottest & most expensive markets. Maybe they're super-awesome at negotiating & managing repairs, but I suspect they're just "buying" notoriety & relevance with their start-up cash. Probably worth looking at if you've got a dog to sell - if you've got a house that's well maintained & better than the comps, I'd just sell it myself for full retail.

In Phoenix, it's a solution to a "problem" that doesn't really exist- if you're priced right, you're not going to have to wait more than a couple of weeks to sell. There are plenty of buyers & plenty of $$ available in loans. My last deal in Phoenix went pending on day one, at full pop. No need for a middleman.
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Old 01-29-2018, 08:16 AM
 
Location: Cary, NC
31,594 posts, read 55,307,520 times
Reputation: 30150
Quote:
Originally Posted by Zippyman View Post
I've watched a couple of open-door acquisitions from the sidelines in Phoenix over the past year - it appears they're paying too much for acquisitions & sitting on rehabbed properties longer than a true flipper would. The properties I've watched still had a tiny bit of (apparent) profit in them, but mostly because the market is so hot & appreciating monthly. I don't think the business model works anywhere except the hottest & most expensive markets. Maybe they're super-awesome at negotiating & managing repairs, but I suspect they're just "buying" notoriety & relevance with their start-up cash. Probably worth looking at if you've got a dog to sell - if you've got a house that's well maintained & better than the comps, I'd just sell it myself for full retail.

In Phoenix, it's a solution to a "problem" that doesn't really exist- if you're priced right, you're not going to have to wait more than a couple of weeks to sell. There are plenty of buyers & plenty of $$ available in loans. My last deal in Phoenix went pending on day one, at full pop. No need for a middleman.
I looked at an Open Door listing online this morning in Raleigh.
Can't see details of their acquisition, but it appears that some repairs were buried in the acquisition price.
And, if they charged a fee to the seller, then they may have a whisker of a margin. A very fine whisker.

It is an interesting house, so I will watch it a bit and see how it goes.
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Old 01-29-2018, 12:58 PM
 
Location: Needham, MA
6,324 posts, read 9,026,282 times
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Quote:
Originally Posted by MikeJaquish View Post
I looked at an Open Door listing online this morning in Raleigh.
Can't see details of their acquisition, but it appears that some repairs were buried in the acquisition price.
And, if they charged a fee to the seller, then they may have a whisker of a margin. A very fine whisker.

It is an interesting house, so I will watch it a bit and see how it goes.
Didn't I read in the article that they charge a 7% fee to the seller?

I have to imagine their model is setup to realize a profit somewhere. I know we live in an age where companies lose millions every year and just make it up by getting additional funding but there has to be some income somewhere in the model.
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Old 01-29-2018, 01:52 PM
 
Location: Boise, Idaho
704 posts, read 550,117 times
Reputation: 650
I have had builders take homes on trade before, but typically at about 80% of value to accommodate for 8.5% to resell the property, carrying costs and risk. At 7%, it doesn't appear to make sense to me unless their margins on the new homes justify it.
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Old 01-30-2018, 12:27 PM
 
Location: Athol, Idaho
2,182 posts, read 1,055,531 times
Reputation: 3184
Quote:
Originally Posted by MikeJaquish View Post
Actually, I would expect any well-funded buyer to invest in repairs, rather than demanding repairs from sellers.
And, to purchase the property at a price that will recognize those repair costs.
Yes, I have thought that this approach makes a lot more sense.
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Old 01-30-2018, 12:30 PM
 
Location: Athol, Idaho
2,182 posts, read 1,055,531 times
Reputation: 3184
Quote:
Originally Posted by Zippyman View Post
I've watched a couple of open-door acquisitions from the sidelines in Phoenix over the past year - it appears they're paying too much for acquisitions & sitting on rehabbed properties longer than a true flipper would. The properties I've watched still had a tiny bit of (apparent) profit in them, but mostly because the market is so hot & appreciating monthly. I don't think the business model works anywhere except the hottest & most expensive markets. Maybe they're super-awesome at negotiating & managing repairs, but I suspect they're just "buying" notoriety & relevance with their start-up cash. Probably worth looking at if you've got a dog to sell - if you've got a house that's well maintained & better than the comps, I'd just sell it myself for full retail.

In Phoenix, it's a solution to a "problem" that doesn't really exist- if you're priced right, you're not going to have to wait more than a couple of weeks to sell. There are plenty of buyers & plenty of $$ available in loans. My last deal in Phoenix went pending on day one, at full pop. No need for a middleman.
I've never heard of them until now, but I know that some of these that buy in quantity expect to lose money on some and make up the difference somewhere else. I've don't flips, but never will do anything on that scale. Sounds scary to me.
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Old 01-30-2018, 12:31 PM
 
Location: Athol, Idaho
2,182 posts, read 1,055,531 times
Reputation: 3184
Quote:
Originally Posted by MikePRU View Post
Didn't I read in the article that they charge a 7% fee to the seller?

I have to imagine their model is setup to realize a profit somewhere. I know we live in an age where companies lose millions every year and just make it up by getting additional funding but there has to be some income somewhere in the model.
I saw that too and asked myself where that fits in if the seller is getting fair market value.
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