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:

  1. Opendoor buys and then resells homes
  2. Sometimes the homes have some cosmetic work done but the average time between buying re-listing properties is just 20 days
  3. Over half the time the price Opendoor pays sellers and flip price on the flip is 5.4 percent or greater
  4. On about 20% re-sales, Opendoor makes 10 percent or more
  5. 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.


 

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