Opendoor is a tech-enabled startup that buys and sells residential real estate through the internet. Their process is straightforward: you give them information about your property and they make you an offer. Then Opendoor fixes the necessary repairs of the property and re-lists it on their website.
So what exactly does this mean for the market of fix and flip real estate? For starters, selling newly-rehabbed properties may become as easy as submitting photos and details online to get an all-cash offer within a few days. While Opendoor notoriously bids below market value, cash is king and some people may value the speed of sales over the margin of their projects. This could potentially turn into an Airbnb-like situation where people fix and flip properties with the sole intention of selling them to Opendoor. Real estate rehabbers have a reliable buyer so lenders have reliable borrowers; this is the perfect storm for new real estate entrepreneurs to emerge.
In addition, discovering lucrative fix and flip real estate deals may also become much easier. While Opendoor is focused on market-ready properties, a new tech-enabled company could arise to serve the growing demand for fix and flip real estate. Just imagine a world where you buy a rehab-ready property online, fix up the place using third-party contractors that you found on a work-for-hire website, then sell the market-ready home to an all-cash buyer such as Opendoor. You would never even need to visit the property to transform a house into a home, a dollar into two, and a street into a neighborhood.
Regardless, the San Fransisco-based startup, Opendoor, is posed to go public through a Special Purpose Acquisition Vehicle (SPAC) in December. We expect that many more people will start to notice the opportunities that iBuyers, such as Opendoor, offer in their personal and professional lives as the concept of online-only real estate becomes more accessible.