According to the San Franciso Chronicle, Opendoor, a 4-year old startup that flips homes, has raised hundred of millions of dollars in funding and is now valued at more than $2 billion. The high-end brokerage firm, Compass has also attracted $400 million in investments which has raised it's value to $4.4 billion.Venture capitalists have taken an interest in the real estate business because pricing, mortgages and building management have been slow to adopt software that could make business more efficient. In other words, prone to disruption.
Opendoor’s Phoenix operations are already profitable, excluding the cost of its headquarters in San Francisco, and Dallas is “on the edge of profitability,” said Childs. The company’s long-term success relies on its ability to accurately price homes. Half of the people who now get offers from Opendoor sell their home to the company. Opendoor did not provide data on how close its offers were to the ultimate sale price of the homes they did not buy.
In recent months, aided by the promise of cash from SoftBank, Opendoor has also expanded into the business of selling homes directly to customers, instead of going through brokers in the traditional way. It acquired Open Listings, a home shopping site, to offer a service it is calling a “trade-in,” where Opendoor handles the entire buying and selling process for a person or family. That service is now available in Dallas. It also began offering mortgage and title services to buyers.
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