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How OpenDoor became a unicorn (a company valued at over $1B)

(BUSINESS NEWS) Good news for direct home sales and fans of adorable mythical quadrupeds – OpenDoor is a unicorn. What does its billion dollar valuation mean for the modern real estate market?

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Online direct home sales is officially a thing. That was probably inevitable, given increasing automation of sales (robots are coming for your jobs – not that they can do them yet!), an ongoing Disrupt All The Things mentality amongst entrepreneurs, and sellers’ frankly understandable desire for a smoother, easier way to get rid of their people boxes.

Seriously, the Holmes-Rahe Life Stress Index puts selling a home above quitting freaking smoking in terms of medically significant stress. People are understandably interested in making that suck less.

Enter OpenDoor.

The OpenDoor offer is direct online sales. TL;DR – OpenDoor gets information from the customer, then sets a price for the property being sold, sight unseen. On top of that price, OpenDoor charges a risk fee, a flat 6.7 percent on top of the stated value, to guard against depreciation. In exchange, OpenDoor takes over the selling process, spiffs up the house and sells at a profit. As CB Insights says in its excellent analysis of OpenDoor, it’s basically high tech house flipping.

The OpenDoor pitch is that their system benefits both seller and buyer. They’re impressively honest about the math: They say their flat 6.7 percent is pretty much comparable with the costs and fees associated with traditional real estate sales, which is true. The advantage comes in, says OpenDoor, because the property is then out of the seller’s hands, no muss, no fuss.

That spares them from the hassle of home sales, but it’s also easier on the prospective buyer than the usual peer-to-peer approach. No need to balance two mortgages, no deals contingent on the house selling at a certain price. The house has already been sold at a certain price. Pony up and it’s yours.

We could argue pros and cons all day, but that’s not the point. The point is that, on a small but growing scale, the OpenDoor offer is working. OpenDoor currently operates in and around Atlanta, Las Vegas, Orlando, Phoenix, Raleigh-Durham, and my own fair hometown of DFW. OpenDoor focuses on second-tier real estate markets, avoiding the fluctuations and complex variables of Realty Madness as it is to be found in NYC, the Bay Area and so on.

In those cities, since its start as a spindly little startup in 2014, OpenDoor has served better than 10,757 total customers.

Per the CEO, it currently accounts for 3 percent of home sales in Phoenix and Dallas. Chump change that ain’t.

They’re already thinking expansion. San Antonio and Charlotte are the next towns slated for Missy Elliot treatment. For those of you who missed the 90s, Missy Elliot treatment is of course “put the thing down, flip it, and reverse it.” Surprisingly apt! Seriously, OpenDoor’s missing a trick if they don’t license that one.

Catchy but unpronounceable hooks aside, OpenDoor is taking a fair amount of risk along with their more than fair amount of money. In particular, focused as they are on moving up in the world, OpenDoor is carrying a lot of debt. As of fall 2017 they had borrowed on the order of $600 million to fund home purchases.

At their current 7.4 percent average gross margin on home sales, that’s sustainable, but it’s a whole lot of money to gamble on a new thing continuing to work. A housing downturn or even a comparatively minor shift in value could easily throw that balance out of whack, and while OpenDoor executives state that the debt would still be supportable in a downturn with an increase in risk fee, there’s always the possibility of chilling an already shaky market with too big a jump.

To state the obvious, avoiding that kind of risk is literally why there are Realtors, and why the real estate market in general works the way it does.

Distributing the risk between bank and homeowners, rather than having one organization take it all, minimizes the possibility of failure. OpenDoor has decided to take that risk, and is confident its model will be enough to ameliorate it. Whether that’s the case or not is an open question.

Most unicorns are just shiny horses standing under the right branch. But if OpenDoor can sustainably deliver on its core offer, then score one for the mythical horsebeast.

This editorial was originally published January 9, 2018.

Matt Salter is a writer and former fundraising and communications officer for nonprofit organizations, including Volunteers of America and PICO National Network. He’s excited to put his knowledge of fundraising, marketing, and all things digital to work for your reading enjoyment. When not writing about himself in the third person, Matt enjoys horror movies and tabletop gaming, and can usually be found somewhere in the DFW Metroplex with WiFi and a good all-day breakfast.

Real Estate Technology

A new video conferencing tool that offers one-click calling and zero software downloads

(REAL ESTATE TECHNOLOGY) uRLive is a video conference service unlike any other in its ease of use, quick and secure setup, and scalability.

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uRLive video conference

Today’s remote work ecosystem has been flooded with video conference solutions, some of which are fantastically innovative and some of which are Zoom. uRLive belongs firmly in the former camp.

uRLive, a lightweight video call service, is basically like FaceTime for everyone. To use it, you simply click a link generated by another uRLive user–a link that functions much like an individual phone number, according to the creators–and you are instantly connected to that person via video call.

The main selling point of uRLive is its portability and general lack of software use. You don’t have to download an app, spend 10 minutes setting up and verifying account details, and then finagle a meeting time that uses your current email address, a one-time password, a lock of hair, and your exact GPS coordinates all to tell your boss that you’re doing what you’re supposed to; you simply click a link and the meeting sorts itself out.

This magical link can, of course, be shared at your discretion; however, it can also be embedded on your website or included on a digital resume, making it a stand-out way for clients or customers to reach out to you in a meaningful way.

uRLive is also the answer to the age-old problem of having to guide people through setting up a Skype (or Zoom, pick your poison) account because they “never thought to set one up before,” thus adding a substantial time sink to your meeting. Instead, you can send your uRLive link to the client in question and start talking within a few seconds.

There are a few different pricing options for this service, starting at $2 per month for a personal license that gives you your own link and page. If you want more advanced features like a chat widget for your website or a scheduling bot to take care of planning out your calls for you, you’ll pay between $20 per month and $100 per month depending on your needs and whether or not you plan on using uRLive for things like your company’s communication infrastructure.

uRLive is an easy-to-use relief of a service in an industry that is quickly going stale. If you’ve been looking for an alternative to the standard video conference options, this might be it.

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Real Estate Technology

Drones inspired by birds

(REAL ESTATE TECHNOLOGY) Newly developed drones incorporate a flapping X-wing design that allow them to fly, thrust, and maneuver much like a bird.

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X-wing drones

The next generation of drones will master the art and aerodynamics of flight with actual wings! This complex engineering feat adds both stability and an unforeseen agility to drones, which means they will be more useful than ever before.

Darting, flapping, swooping, hovering, and soaring are a few of the improved capabilities these cross-wing ornithopters have, making them far superior to the often wobblier, stiffer versions on the market now. The creators of the ornithopters used reverse engineering based on detailed observation and study of how birds move to create a winged version of the flying robot drones.

Instead of the propellers and fixed-wings used in conventional drones, these new drones flap their wings and raise their tails in order to create a forward thrust, similar to how birds and insects fly. The X-wing designs make these flying robots better at maneuvering tight spaces, giving them greater control at varying speeds.

How exactly does the X-wing design excel where other flapping-wing designs have failed? The inventors form a team of researchers from Singapore, Australia, China, and Taiwan. In a recent Science Robotics magazine article, they explain:

“One difference is that our ornithopters make use of the “clap and fling” effect. The two pairs of wings flap such that they meet, like hands clapping. This makes enough extra thrust to lift their body weight when hovering.”

The ornithopters have control over nose and tail as well, and can quickly change from moving horizontally to moving vertically. They also use up to 40% less energy to run, and can be flown like a regular plane, or hover like an existing drone in order to conserve even more energy. Because of the greater control and increased capabilities of these drones, they also have more uses including being safe enough to fly inside.

One of the researchers responsible for creating this ornithopter, Lau Gih-Keong, an associate professor in mechanical engineering at Taiwan’s National Chiao Tung University, spoke to CNN about specific future uses of these flying machines. The new drones can be used to maneuver in and out of nearly inaccessible, tight spaces. For example, they can easily fly in and out of a ventilation duct, where regular inspections are difficult but essential to system upkeep.

If you want to see how these next gen drones work, The Conversation published three videos of these marvels in motion. They look small, about the size of a hummingbird or even a large, flying insect. One can only imagine their potential after seeing how agile they are. In that same article, the researchers have said they will continue to refine and develop these and newer drones, based on the evolution of birds.

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Real Estate Technology

This note-taking app adapts to your thought process

(REAL ESTATE TECHNOLOGY) Relanote is a dynamic alternative to the age-old practice of taking notes.

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relanote notes

Taking notes is a process that has evolved substantially to fit individuals and has stayed relatively static in overall execution. It may be surprising, then, for us to say that a new take on note-taking is worth your immediate and full attention–but that’s exactly the case.

Relanote is a fresh entry in the arguably oversaturated “Notepad” app category. All of the features you’d expect in a minimalist note-taking app are there–encryption, note sharing, a free version, access across the four main computer and mobile platforms–but what makes it truly interesting is its hierarchical system of organization.

Somewhat like Slack, Relanote allows you to tag other notes by using the “@” symbol, and you can classify your notes by using hashtags within them. This is a super simple but effective way to organize, find, and utilize your notes without having to do any kind of copying and pasting, split window view, or swiping back and forth.

Once you’ve tagged a note in another note, you can zoom out to see how the two (or more) notes connect to each other in a visual “graph” that displays each of your tagged notes in a web. You can even filter different tags on the graph so that any irrelevant information is left out when looking for something specific.

The app also has a file-and-folder storage option to help organize your notes in a “physical” manner. “By leveraging the power of both methods, Relanote adapts to your way of thinking,” Relanote’s product page claims.

Relanote outlines quite a few upcoming features on their website, some of which include importing, exporting, themes, and templates for your notes. If you’d like to access these features, you’ll need to upgrade to the pro version ($4 per month) or the team version ($9 per month). However, Relanote makes it clear that the core principle of their app is present in the free version–and that’s enough to get you started.

A note-taking app that adapts to your particular process of writing, organizing, and revising sounds like a steal, especially when you consider that the base version is free for unlimited use. Especially if you’re a visual person who’s looking for a new way to record information, Relanote is worth your time.

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