These companies could have the power to change the real estate industry.

For better or worse, these companies could be shaking things up in the real estate market. Know who they are, how they can help, and the risks they can bring.

1. Zillow

Zillow is a big beast. They’ve been one of the most controversial companies and websites in the real estate market since they launched their horrible flawed Zestimates. Now they’ve bought a mortgage lender, are trying to take over renting and property management, and are now trying their own hand at flipping houses with Zillow Offers. They say they plan to buy 5,000 houses a month. Or at least use this as a powerful lead generation tool to feed leads to their agents.

Aside from manipulating values, the biggest risk Zillow represents is if it fails. They already report they are losing over $45M every three months on Zillow Offers.

2. Opendoor

Opendoor is one of those new giant iBuyers or online wholesalers. They are armed with hundreds of millions of dollars in venture capital and have forged a partnership with real estate brokerage Redfin. Just like OfferPad has done with Keller Williams. They aren’t buying everywhere, or every type of property. It’s a great example of what you can do as an individual wholesaler when you have unlimited funds to buy and flip fast. You can do that using Best Transaction Funding to finance your deals. Again, the real risk here isn’t the competition, it is if they aren’t buying at the right numbers and fail and turn off Wall Street and the big funds behind them.

3. WeWork

WeWork is a great example of what’s possible in terms of going big, and also how to fail hard by overstretching and having an unsustainable business model. Worth close to $50B a few weeks ago, the office giant’s valuation has just been revised down by about 75%, to less than the $12B they’ve borrowed.

4. Zurixx

You may not have heard of them, but Zurixx is behind the education programs recently promoted by HGTV star Tarek El Moussa. They just got hit with an FTC investigation and order to stop due to being misleading, and charging high fees for training that may not produce the promised results. That could end up shaking up the real estate guru space. More notable personalities in this side of the industry are going to have to find new ways to market if they are going to stay in business.

5. Google

For real estate investors who are relying on PPC ads and SEO, Google has all the power to shut the flow of business off overnight or hike the costs of lead generation. The same goes for Facebook. Be very careful about betting everything on third party platforms.

6. Amazon

Amazon has been looking for its angle to take over the real estate market for a long time. It may have already found that in selling homes online.

7. Haus.me

Haus has created a whole new generation of houses. They can withstand earthquakes and hurricanes, and are reportedly even zombie proof. They produce zero carbon emissions, can run completely off the grid, and you can take them with you when you want to move. They are also highly autonomous and packed with new smart home tech. It could completely change what we expect from housing.

 

Are you getting freaked out by these giant iBuyers in the real estate market yet?

Giant tech and real estate companies are moving into the market. They want to own it. It’s a major shift every investor and business in the industry should be paying attention to. Here’s the good, the bad and ugly of what you need to know about them and their impact.

The Who, What & How Big of iBuyers in the Real Estate Market

There are three really big players in this space, with even bigger funds behind them. We’re talking about this new breed of supersized online home home buyer who is offering sellers cash for their homes and the promise of a quick transaction.

In addition to Facebook and Amazon who still very much want to get involved and stake their claim to the US housing market, there are OfferPad, Opendoor and Zillow.

OfferPad recently inked a deal with Keller Williams to buy up homes. Opendoor has forged a similar partnership with Redfin. They’ve also hooked up with Lennar to promise movers one seamless transaction for trading up from their old home to a newly built one. Opendoor has raised hundreds of millions of dollars from very powerful venture capitalists. Zillow is notorious for being willing to lose billions of dollars just to buy up market share and drown out the competition.

What They are Doing Well, and Not

These companies are doing great about making noise, getting in the press and raising money. If you just giant companies like these, then they may also carry a lot of credibility.

They have mountains of cash to buy homes. They have great infrastructure for turning around and wholesaling or flipping these homes for a small profit in just days. The amount of capital they have and authoritative voice on prices also gives them a lot of power to manipulate home values and the market in their favor.

Of course, with all giants, they are pretty slow moving as well. Each focusing on expanding to a few major metro areas at a time and have very tight buying criteria.

The numbers show at least half of sellers have been rejecting their offers, so they may not have nailed this model yet. At least not at scale.

How Big iBuyers are Helping You

No small company or individual real estate investor should be wanting to take a billion dollar giant head on. It will get ugly.

However, these companies may be helping wholesalers and house flippers more than you realize.

• They are making selling your house online to a wholesaler normal

• They are leaving plenty of properties un-served

• Their heavy 7% plus fees leave room for better offers

• They are still essentially working as Realtors, and many sellers don’t like that

• They could be your biggest end buyers