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The Stack That Helped Opendoor Buy and Sell Over $1B in Homes

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Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes

#31

Post by kandalf »

frgtpsswrdlame wrote: post #28
azirbel wrote: post #16

Earlier quoted context omitted.

It looks similar, but we're actually very different than flippers. House flipping is about finding underpriced houses (either by having a sharp eye, or by buying distressed houses), and then optimizing the amount of money invested vs. the return. Opendoor is much more focused on the customer experience, trying to give fair offers to every home - everyday homes, not distressed ones. We typically don't spend very long…

That's defining it a bit narrowly isn't it? You guys buy homes, do a (little) work on them and then sell them for more, all in a short time frame. Maybe your innovation is in doing lots of small flips but it still seems like flipping to me.

Perhaps another way of thinking about it is in terms of being a market maker versus a speculator. I think of Opendoor as more like the former, where traditionally a flipper refers to the latter.

Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes

#32

Post by segmondy »

JohnJamesRambo wrote: post #24
segmondy wrote: post #22

Buying and selling over $1B in home is not impressive when done by a computer. If someone did it single handedly maybe. I hate when people quote numbers to impress and confuse others. At $100,000 that's 10,000 homes. Selling 10,000 items is not impressive. So why should I care what stack you used?

Have you done it?

Sell 10,000 items? Yes, on a daily basis.

Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes

#33

Post by hassox »

Abundnce10 wrote: post #9
kandalf wrote: post #2

I'm a software engineer at Opendoor- happy to answer any questions!

We started in 2014 with a Ruby on Rails monolith and Angular frontend, both of which were good ways to move fast while we were very small. We use Webpack to build our frontend apps, and serve them using the Rails Asset Pipeline. Within your MVP how did you handle authentication between your Angular apps and your Rails backend? I know you implemented Paladin to handle auth between your new microservices but I'm curiou…

Hi!

When we first started we used a pretty vanilla version of Devise. The angular application just used session based auth. The easiest way to get the MVP happening was to have Rails generate the landing page of the SPA so we got sessions for 'free'. As we started to add more options for authenticating to the application to handle micro-services and our mobile application we took advantage of Warden/Devise and implemented a custom strategy for handling JWT authentication in addition to the regular session based strategy that comes out of the box.

The JWT authentication is Guardian compatible since we use Guardian to drive Paladin. It was a relatively straight forward addition with Warden/Devise to provide authentication based on either strategy which allows us to take advantage of these different schemes with minimal updates to our core application.

Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes

#34

Post by NicoJuicy »

zain wrote: post #26
NicoJuicy wrote: post #20

For anyone who was wondering, they use smart locks from Schlage. But i'm curious for two things: -why they use those except for the different models Schlage has. -where is Schlage api's documentation :p

Hey! Zain from Opendoor here. We actually just switched to using Kwikset 914 locks instead of the Schlage ones. API docs are basically nonexistent for both, but the Kwikset is a lot easier to reverse-engineer than the Schlage! Feel free to email me if you have specific questions about either lock. zain@opendoor

Wow, that's seriously open of you guys! Thanks

Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes

#35

Post by RangerScience »

kandalf wrote: post #2

I'm a software engineer at Opendoor- happy to answer any questions!

Horray!

I love code reviews, and the code review pipeline, but one issue I keep running into is handling a bottleneck'd review process, and I'm wondering if you have any tips or advice.

How do you stay productive while blocked on a review request?

If you stay productive by swapping to a different task, how do you avoid merge, dependency, and task switching headaches between what's under review and the "back-up" tasks?

I'm not sure if that question is clear, but I'm betting on you having encountered similar enough situations to know what I'm getting at.

Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes

#36

Post by wtvanhest »

frgtpsswrdlame wrote: post #28
azirbel wrote: post #16

Earlier quoted context omitted.

It looks similar, but we're actually very different than flippers. House flipping is about finding underpriced houses (either by having a sharp eye, or by buying distressed houses), and then optimizing the amount of money invested vs. the return. Opendoor is much more focused on the customer experience, trying to give fair offers to every home - everyday homes, not distressed ones. We typically don't spend very long…

That's defining it a bit narrowly isn't it? You guys buy homes, do a (little) work on them and then sell them for more, all in a short time frame. Maybe your innovation is in doing lots of small flips but it still seems like flipping to me.

I'm going to speak for OpenDoor here so someone from them can probably jump in, but the company I started and shut down was around financing house flippers and I have a background in both capital raising and real estate.

There are many types of 'house flipping' and most of the differences are just various shades of grey.

For illustration purposes:

At one extreme: Focus on buying dramatically undervalued assets, putting in minimum work and reselling. (Do this using lots of people labor in looking for deals.) - IMO, this is the only way to make money consistently flipping

At the other extreme: Buy houses, put dollars in to them and acheive an ROI (lots of people labor in rehab). This is what you see on "house flippers" or other TV based flipping shows. Typically these systems work when the market is appreciating, but the value the 'flipper' puts in is really questionable vs the market appreciation. Most of the people that do this strategy eventually end up getting hammered in a downturn.

Opendoor is basically disrupting the first group. They are using a quantitative process (automated valuation models), then overlaying a fundamental process on top (having someone look at the data to make sure it makes sense.) That is how they make sure they are buying undervalued assets.

The disruption happens because they are eliminating the huge amount of man hours it takes to find undervalued deals, by paying slightly more, and building a good brand and well as fine tuning their marketing channel.

At the end of the day, a certain percentage of people need to sell their house very, very quickly and OpenDoor will be able to pay more than flippers in the first extreme so they will gain a ridiculous amount of market share.

Downside risk: The risk is that they need to scale their operation so large to get economies of scale that when a downturn happens, they are too top heavy and end up getting financial destroyed. Many people may also assume that they could systematically missprice houses (pay too much), but I doubt that is a real risk.

Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes

#37

Post by crooked-v »

segmondy wrote: post #32
JohnJamesRambo wrote: post #24

Earlier quoted context omitted.

Have you done it?

Sell 10,000 items? Yes, on a daily basis.

Buying a home is much, much more complicated than buying "an item", even if you leave out the complications of a mortgage.

Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes

#39

Post by frgtpsswrdlame »

wtvanhest wrote: post #36
frgtpsswrdlame wrote: post #28

Earlier quoted context omitted.

That's defining it a bit narrowly isn't it? You guys buy homes, do a (little) work on them and then sell them for more, all in a short time frame. Maybe your innovation is in doing lots of small flips but it still seems like flipping to me.

I'm going to speak for OpenDoor here so someone from them can probably jump in, but the company I started and shut down was around financing house flippers and I have a background in both capital raising and real estate. There are many types of 'house flipping' and most of the differences are just various shades of grey. For illustration purposes: At one extreme: Focus on buying dramatically undervalued assets, putti…

It seems to me that they actually disagree with you, see the comment further up this thread.

>Opendoor is much more focused on the customer experience, trying to give fair offers to every home - everyday homes, not distressed ones.

So do you think that this response is being a bit coy and they are in fact buying deeply discounted homes?

Also, I guess I don't understand where they actually make money. If someone is unable to sell a home for a long period of time and then sells it to OpenDoor, why are they able to then turn around and sell it for more? In this very thread they attest that they're not flippers because they're not adding much real value to the home.

Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes

#40

Post by arsb »

azirbel wrote: post #16
frgtpsswrdlame wrote: post #10

Earlier quoted context omitted.

But it basically is flipping isn't it? Maybe they can work out how to flip a little cheaper with technology but this model only works because flipping is so hot right now. http://www.housingwire.com/articles/39523-home-flipping-hits...

It looks similar, but we're actually very different than flippers. House flipping is about finding underpriced houses (either by having a sharp eye, or by buying distressed houses), and then optimizing the amount of money invested vs. the return. Opendoor is much more focused on the customer experience, trying to give fair offers to every home - everyday homes, not distressed ones. We typically don't spend very long…

isn't being "[...] much more focused on the customer experience, trying to give fair offers to every home [...]" just a layer on top of the business model - which seems to be indistinguishable from flipping houses?
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