WeWork - not working. Is the iBuyer Buz the same?

[Lesley Resnick]

I have been following WeWork for while now wondering what is the big deal?  $45B valuation?  For what?  They are valued and treated like a tech, but they did not create anything new.  The sobering light of their financials has scared off investors from their IPO.  Shared space, online booking and electric doors have been around for a while.  Further, Regis has been in this business as long as I can remember.  In Jacksonville there are a number of incubators that are industry focused to collaborate and create an environment that fosters business among like organizations and leverage shared space.

The ibuyers are like the WeWork story.  Taking huge sums of VC money and blowing through it only to get more for hitting the grow at any cost model.  Since they are in this realm they receive a tech start up valuation.  They will never be able to scale like a tech or maintain the margins.  The value of a tech is that the net next unit of production goes to almost zero.  Facebook will incur an unmeasurablely small cost to add 1,000 users to its servers.  The iBuyers need a $250m in cash plus carry costs to add 1,000 houses.  There is a market for iBuyers and for some people it will be perfect. It is not going to change the world.  The majority of sellers would rather wait for thier house to sell and get market value, than take a 15% hair cut.  The iBuyers must buy below market and sell at or above market, the same as anyone else who wants to make a profit in this business.