All Forum Posts by: Matt Morgan

Originally posted by @Tim T.:

I know this is an old forum but seems they are still up and running.  I think buyers and sellers should be aware of their business model.  If the home isn’t listed then you don’t know what the market value is, so how do you know your home isn’t worth?  They are basically taking advantage of desperate and/or uneducated buyers and sellers, they don’t understand that their homes are being wholesaled at an institutional level.

To some sellers, there are more important things than money. (time and convenience) Don't assume that everyone has the same motivations/desires when selling a home - Opendoor is buying a lot of houses so obviously people are finding their service valuable. 

Just to follow up on my previous post, Opendoor has really picked it up in Phoenix. They bought 245 homes this February as opposed to only 65 last year. This represents 2.6% of the Phoenix market, compared to only 0,8% last year. Not a staggering number but they are definitely showing improvement. 

In my last post, I noted that their market share had plateaued because the supply of homes in their price range was diminishing rapidly. It looks like they've responded because their average purchase price increased YoY from $205k to $245k. 

Anecdotally, I've seen a TON of Opendoor listings lately, especially showing buyers around areas of the far West Valley like Surprise.  

Although their market share has increased quite a bit, nothing says that they are running a profitable and sustainable business model. Only time and a change in market conditions will make that apparent. 

I've had issues with contractors who are licensed and I've had issues with those that aren't. Ultimately hiring a licensed contractor is just supposed to alleviate some of the liability in case something goes wrong, but that isn't always the case. 

I personally don't feel the need to use licensed tradesman unless the job is big or I want to provide security to the end buyer when I go to sell. Many of the best tradesman that I've come across are not licensed.

I think references and proof of work are 10x more important than whether a contractor has a license. Just my 2 cents.

Mobiles on land function very similarly to traditional single family homes. Flips, buy-and-holds, wholesaling are all very workable strategies.

Mobile homes in parks are a different animal. Conventional financing is almost non-existent on these types of properties and makes flips, especially on more expensive homes, very difficult. Owner financing, or carrying your own paper, can make you good money and this is a much less competitive sector than traditional stick-built homes. Steer clear of the age restricted parks.

@John Fedro is the guy to talk to if you want to pursue this further. 

Is this a rendering of the finished complex? Where is this located?

Most banks and credit unions will have a minimum loan amount but there should be some exceptions. Continue calling every local bank and credit union in your area until you can find a yes. I also know of a nationwide lender that has this limit but was willing to be flexible on it for me in the past. Feel free to PM me if you want their info.

I can only speak confidentially of OpenDoor as I've done a lot of research on them and know someone who works there, although I'm assuming all of their business models work similarly. (OpenDoor, OfferPad, Knock, etc) Keep in mind that their offers usually have fees backed out of them. They are operating on a high volume, low margin business model...one that works very well in an appreciating market. They have a lot of in house support to help cut down on selling costs...ideally they want buyers to come directly to them rather than using an agent. I've heard that they are partnering with Zillow to get their inventory built into the search function. We'll see what happens when the market turns...word is is that they have enough cash on hand to weather a multi year downturn. From the recent data I've read, the market share of these companies has peaked and not grown for a while now. They target "mass-appeal" properties between $200-300k and that kind of inventory is getting harder to come by, at least in Phoenix.

Congrats dude, that's a slam dunk. Keep it going!

I'm sure George Mevawala can help.

Aaron R. Can probably add some insight here.

Originally posted by @Ned Carey:

@Nick C. wrote

Yes I agree, where do you think the bad wholesalers come from.

@Ben Leybovich

They are not really wholesalers, they are just wanabees. They probably never have nor ever will sell a property.

 Not necessarily. There are many "big name" wholesalers doing several deals a month in Phoenix who artificially inflate and deflate numbers when selling. The thing is, there are actually end buyers out there who are OK with the possibility of making 5-10 grand on a $300,000 house. This is who they are appealing to and this is what makes competing for deals so difficult.