Keith Rabois, former Paypal and Square executive has his startup, which will allow homeowners to sell their home/investment property on their website almost instantly (3 day cash closings), on the brink of being launched as they are closing in on what could be the final round of investment funding to get this app off the ground, and a projected launch date of July 2014. Originally named Homerun, we learned yesterday the company will be called opendoor.com.
Their goal is to use technology to transform the wholesale market by having property owners enter on their site the following information on the house they are looking to sell:
- Address
- Identity verification
- Price they are looking to sell the property for
OpenDoor will then use the MLS and other databases to determine if they are selling/listing for the right price. But, selling in this marketplace will net the borrower a lower value than market value, but closings will be quick and sellers will NOT need to hire an attorney to complete the transaction.
Think about who their target market will be, the same as the local investor – people in trouble with their mortgage, about to have a tax sale, anyone in need of a quick cash sale. Wholesalers/ flippers.. sound familiar? They will also attract home buyers that are in contract to purchase another property, but can’t close on that one until the house they are selling is sold.
You ask who is buying these houses ? Simple, they are! They will become the wholesaler at that point, buying the property (at the right price for them, hopefully, as they are buying sight unseen), and then quickly turning that property around and reselling it. There are also talks that they will be putting together teams of rehabbers and Realtors in markets to fix these properties and then resell.
I know, you’re thinking the same as me, how can you buy homes nationwide, sight unseen, and know what you’re getting and if you’re paying the right price? But doing this in large numbers, they will not be looking at their profits on a property by property basis (or so I would expect them not to be) , but on a monthly/quarterly basis. It will be interesting to watch and follow this site and the company in the months to come, to see if they can make this work.