Will Opendoor permanently disrupt the real estate industry?

[Bryan Frost]

Now that Opendoor is a public company we are seeing more information about their business strategy and overall financial metrics. The company flipped roughly 18k homes in 2019 and pretty much broke even doing so. The company is currently valued at $13 billion and is expected to take over the real estate industry and be worth hundreds of billions in the future. I'm skeptical of their overall business plan and believe that they are going to have a challenging time improving their margins and becoming profitable. From what I understand they offer slightly below ARV less repairs less a 5% service fee. How can you make a profit with that model? Curious to hear your thoughts?

[Michael C.]

Open door lost a bunch of money on a house in my neighborhood.  Ended up selling for less than they purchased it for. Can’t win them all I guess.

I think Redfin is more of a market disruptor, 1% list fee. Sales Agents are salaried too.  When we sold with them they gave us a whole report on pricing and comps, professional 3D tour and everything. Vs a traditional local friendly agent we talked to first who gave us a guesstimate listing price without showing us any data and wanted the standard commission. 

5-6% in my mind is a dead old model, I won’t pay that when better companies can do it cheaper and better.  
Not sure why people hate car dealers for making a few bucks but love paying there agents thousands of dollars.