There is great news for real estate wholesalers who are looking for more inventory. Zillow’s collapse also means that it is shedding thousands of properties for less than they paid for them.

Zillow’s Flawed Products Finally Catches Up With It

There are certainly many real estate investors who are cheering the recent announcement that Zillow is imploding. They have plagued the market for years with a horribly broken data tool.

It turns out that same tool has now finally been their own downfall. After going all in on house flipping, they have announced that their inability to calculate house prices has effectively put them out of business. Effectively wiping out $30B in market value for stock investors, and leading to layoffs of at least 25% of their team.

Without house buying, a Zestimate and data business, and having continued to lose hundreds of millions a year, despite billions in sales leaves little of a company left, if anything.

Zillow’s Implosion Vs. House Flipping

Where Zillow failed many others are thriving and are experiencing their best years in real estate ever.

Obviously, understanding your property values, to make smart offers and re-market them well is absolutely pivotal to success. Something Zillow has finally admitted it simply cannot understand.

Aside from understanding property values, you also have to have a business model that works, and to add more value than others. Yet, Zillow Offers neither offered a great process for sellers, or offered competitive rates. In fact, they tried charging sellers far more in commissions than full priced Realtors.

Fortunately, now regular wholesalers not only get to enjoy less competition in the marketplace, but also the opportunity to scoop up thousands of properties the failed internet company needs to sell at a discount.

Lots More Inventory Coming Down The Pipe

Zillow will probably prove to be just the first in this domino chain. Other large iBuyers and their backers will probably take note of this, and feel better about admitting defeat or will be scared off as well.

That could mean tens of thousands if not far more in discounted deals coming. While investors with capital are going to be looking for new ways to buy into this space.

Now is the time to develop relationships and position yourself to get these deals.

When you sign them, we’re here to fund your deals for you...

 

Numerous Opendoor style websites are popping up to compete with wholesalers on a whole new level. What important lessons do wholesalers need to take away from this? How do you keep making money with all this pressure?

#1: It’s All About Marketing

Big companies like Zillow, Opendoor and now Redfin have transformed this space in months. They’ve given it legitimacy and visibility. Of course, if Zillow’s buying program is anything like its Zestimate tool, it’s terrible. Redfin Now reportedly takes a 7% fee to the seller on the purchase price of the home. That’s a lot for a ‘discount’ real estate service. Startups like Opendoor are attracting millions in VC investment, despite not really being unique. It’s all about the marketing. You should offer better deals and service, but it’s clear that winning is all about lots of marketing and making a lot of noise about your business.

You Can Think Bigger

One reason these companies are where they are is that they just think bigger. If you are only shooting for a handful of wholesale deals in your local market each month, that’s probably what you’ll get. These companies are coming out of the gate thinking about dominating on a national scale. They have the potential to at least do hundreds of deals each month. With Best Transaction Funding to finance your deals, you goals are the only thing to hold you back. Do you need to think bigger?

Clean Websites

In general real estate investor websites are ugly. They are outdated and ineffective. There are countless of these Investor Carrot type sites out there that really aren’t serving investors well. Can you imagine Redfin, Opendoor or Zillow soaring to fame with an ugly site? No. Aesthetics do matter.

Don’t Lose Money

Just because they are big, making lots of noise, and often in the way doesn’t mean these big internet wholesalers are making money. Zillow has been infamous for losing billions of dollars. As are many other tech startups. They might look cool, but all that attention isn’t worth much if you are losing money. If you are in real estate to make money, focus on profit. You can make a lot more by focusing on profit margins, and less on volume. It’s all about the bottom line.

You’re Onto A Good Thing

Wholesalers have been picked on for years. Especially in online forums. Realtors and other investors have long been jealous of how easy wholesalers can make so much money. This new trend is great validation that you are onto something great.

You’re Going To Have To Be More Creative

Most real estate wholesalers can’t afford to out market these big tech driven companies. They can’t afford to throw away billions just to stay visible. Fortunately, you don’t have to. Though you will have to be more creative to get the deals. Think guerrilla marketing, being earlier to the punch in making offers, making stronger offers, better positioning, and more focus on personal relationships.

 

Watch out real estate investors - the Z Apocalypse is here. Zillow has announced major expansion plans and advances into new sectors of the industry. How can real estate investors prep, survive and thrive?

Zillow’s New Moves

If you thought Zillow was already a pain for standing out online and the deals it wrecks with its seriously flawed Zestimates tool, that’s just the beginning.

Zillow recently attracted a lot of attention for taking over a large mortgage lender. Now it aims to capture and capitalize on real estate sales and listings and do all the financing for regular home buyers.

More importantly for investors, Zillow has also begun buying and selling properties itself. Like OpenDoor and so many wholesalers out there. It wants to list ‘em, buy ‘em, flip them and finance them.

 

Plus, the online giant has announced it will be offering property management and rental property services. It will act as the consumer facing portal for rental applications and approvals and processing rental payments.

Essentially Zillow is stepping on a whole lot of toes at once. All of these new revenue streams could create even more capital to expand its online monopoly in an attempt to starve smaller players out of the business.

What To Do

Obviously solo investors and small businesses are at a disadvantage in many ways. They don’t have a Zillow size marketing budget or giant team of sales staff to follow up with leads and cold call. Like Facebook, Zillow has also used all the content and links from users against them. Anyone who contributed to Zillow’s blogs, forums or credited it for data and research on their own blog, or used the site for their reviews, essentially gave away their own future business to the competition.

Fortunately, you do have some advantages to wield too. You can insist on running a very lean and highly flexible business that has better profit margins and can take advantage of market trends and new opportunities faster than Zillow.

You can stand out with your own personal brand and stay unique. You can specialize in being the expert in one niche, or become the local expert.

You can do far better at building personal relationships and providing superior personal service. You can provide more accurate information, follow up better, and conduct more targeted marketing.

Maybe you can even wholesale your properties to Zillow?