As a senior computer science student, who constantly tries to learn and keep up to date on his own time, I felt a little overwhelmed after reading this article. I know that they are just tools that can be learned, but my question is about junior devs. How do you go about hiring (if it is the case that you do hire junior devs) and training them?
The Stack That Helped Opendoor Buy and Sell Over $1B in Homes
41–50 of 79 posts
Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes
#42Earlier quoted context omitted.
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 un…
It is a nuance.
Opendoor: Targets sellers that want to sell quickly without any hassle.
Flippers: Targets sellers that want to sell quickly without any hassle. Some of them are distressed. Some of them are just in a hurry.
There really is no real distinction. How they make money is clearly laid out on their website. They buy for low, sell for higher than the bought. I believe they also cut out realtors.
Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes
#43Earlier 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…
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?
That's fair - the customer experience is a layer on top of the business model. The second part of my comment is more relevant:
> We typically don't spend very long renovating our homes. We'd rather reinvent the buying and selling experience itself, and do a larger number of transactions.
I think we're getting a bit hung up on definitions in this thread. We do flip houses, in that we buy them and then resell them right away. But in real estate, the connotation of a "flipper" is someone who's either (1) really good at identifying underpriced houses, or (2) really good at getting return on investment (ROI) through renovations. One of the best ways to identify underpriced houses is to take advantage of people who are down on their luck and need to sell fast, so many people also think of "flippers" very negatively.
Opendoor's model isn't based on finding underpriced houses or renovation ROI. We charge a fee (transparently and upfront) for the service of buying your home and taking on the risk of selling it. Our goal is to make that fee as small as possible, and to provide our services to as many people as possible.
We're not trying to make huge amounts of money on every transaction. We're trying to do a lot of transactions, at a fair price.
Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes
#44Earlier quoted context omitted.
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 un…
Longer comment on "flipping": https://news.ycombinator.com/item?id=13835150.
> Also, I guess I don't understand where they actually make money.
Sorry for not being more clear on that. When we make an offer on a home, we present a headline price ("we think your home is worth $X"), and an upfront fee for our service (6-12% depending on our estimation of the risk, where traditional real estate fees are 6%).
We try to make the fee as transparent to our sellers as possible, so they can make a fully informed decision.
Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes
#45Earlier quoted context omitted.
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 un…
It is a nuance. Opendoor: Targets sellers that want to sell quickly without any hassle. Flippers: Targets sellers that want to sell quickly without any hassle. Some of them are distressed. Some of them are just in a hurry. There really is no real distinction. How they make money is clearly laid out on their website. They buy for low, sell for higher than the bought. I believe they also cut out realtors.
There's inherently wrong with wanting to sell quickly. If grandma died, leaving me her house 3,000 miles away from where I live, the last thing I'd want to be saddled with is trying to sell it. I know nothing about selling (or owning) a house, the real estate market in that area, etc. A fair enough price ASAP is what I'd be looking for.
Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes
#46the business model is fascinating. the capital requirements make opendoor seem crazy on the surface, but it is not at all insane if you dig deeper. the short term model is predicated on managing inventory like a retailer and diversifying holdings like a trader. mastering both functions, let alone one, is very challenging, but far from impossible. if opendoor can acquire data and predict transactions better than compe…
Thanks for the comment -- and it's very accurate in terms of where we'd like to go.
On a tangential note: empowering untrained individuals is important, but we often do the opposite too. Many of our internal tools are designed to make trained professionals/experts as efficient as possible.
For more speculation on Opendoor's business and where we might take it, I think Stratechery has a good writeup. https://stratechery.com/2016/opendoor-a-startup-worth-emulat...
Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes
#47As a senior computer science student, who constantly tries to learn and keep up to date on his own time, I felt a little overwhelmed after reading this article. I know that they are just tools that can be learned, but my question is about junior devs. How do you go about hiring (if it is the case that you do hire junior devs) and training them?
Ah, they're just tools that can be learned. I had to run around the company quite a bit to make sure I got all the information right.
We don't require experience in any of these tools to get a job at Opendoor. Most programming experience can be transferred between different technologies. We do a lot of pair programming to bring people on board, plus feedback in code reviews.
Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes
#48So, OpenDoor == CarMax for homes?
Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes
#49the business model is fascinating. the capital requirements make opendoor seem crazy on the surface, but it is not at all insane if you dig deeper. the short term model is predicated on managing inventory like a retailer and diversifying holdings like a trader. mastering both functions, let alone one, is very challenging, but far from impossible. if opendoor can acquire data and predict transactions better than compe…
Thanks for the comment -- and it's very accurate in terms of where we'd like to go. On a tangential note: empowering untrained individuals is important, but we often do the opposite too. Many of our internal tools are designed to make trained professionals/experts as efficient as possible. For more speculation on Opendoor's business and where we might take it, I think Stratechery has a good writeup. https://strateche…
yup, i also wrote a deeper analysis after someone posted about opendoor in december.
what will be super interesting to watch is how the market size (i.e., annual real estate transactions) changes in response to reduced friction. historically, disruptive technology like uber widens the market substantially because it unlocks all this demand artificially suppressed by friction. because of opendoor and similar startups, will transaction volume increase by 10%? 50%? 200%?
opendoor is the classic VC investment: huge upside with controllable, sane risks.
Re: The Stack That Helped Opendoor Buy and Sell Over $1B in Homes
#50Earlier quoted context omitted.
It is a nuance. Opendoor: Targets sellers that want to sell quickly without any hassle. Flippers: Targets sellers that want to sell quickly without any hassle. Some of them are distressed. Some of them are just in a hurry. There really is no real distinction. How they make money is clearly laid out on their website. They buy for low, sell for higher than the bought. I believe they also cut out realtors.
There's inherently wrong with wanting to sell quickly. If grandma died, leaving me her house 3,000 miles away from where I live, the last thing I'd want to be saddled with is trying to sell it. I know nothing about selling (or owning) a house, the real estate market in that area, etc. A fair enough price ASAP is what I'd be looking for.
Why not make one call to a local agent and have it sold for 5% more money?
I'm all for paying $2 for convenience if coffee on the run. Not sure I would pay $20k to save a few hours work around selling a house.