Zillow has recently rolled out an association with Opendoor, a property flip program with venture capital financing of $1 billion.
Some experts say this is like Payday loans, others think that it’s a quick fix like a short sale.
The process works like this:
- Opendoor buys and then resells homes
- Sometimes the homes have some cosmetic work done but the average time between buying re-listing properties is just 20 days
- Over half the time the price Opendoor pays sellers and flip price on the flip is 5.4 percent or greater
- On about 20% re-sales, Opendoor makes 10 percent or more
- Consumers are charged 6 to 12 percent in fees, averaging between 8 and 9 percent
The bottom line – Either way, Payday Loan or a new take on the short sale, this is definitely a “Seller Beware” situation.
