How did the #Phoenix #iBuyers do in Q4? If DOOP is death, #Zillow has a death wish.

“Dead money on deck!”

First: My contention is that the number I call DOOP (days-out-of-pocket, the number of days a property is owned and hence the number of days the funds are rented) is death. This is news to no one who has ever flipped a house for profit – with the exception of Wall Street-funded poindexters with money to burn. They are to be excused, I surmise, since so few of their flips are profitable.

Second: In Metropolitan Phoenix, Zillow is getting worse, quarter-by-quarter, at divesting itself of its “investments.” By contrast, OfferPad is gradually getting better, with OpenDoor muddling in the middle. None of them are any good at marketing real estate, mind you, but in the game of which underwater “investor” gets shark-bit first and worst, Zillow’s fat ass is the biggest target.

Do you think it’s easy to lose almost $50,000 per “investment?”
For Zillow it takes almost 100 days…

Third: This is news. I’ve been reporting the carnage in Phoenix for more than six months, and I would love to see numbers from other iBuying cities. My Q4 iBuyer results are free to peruse, copy, adapt. The real estate press will not report any of this, apparently, but news travels fast in a red ocean. Much of the improvement in DOOP we are seeing over time results from better-informed aggression by Buyer’s Agents. Even with DOOP trending downward for OfferPad and OpenDoor, the net losses per “investment” are holding steady.

Buy high, sell low, price and market poorly! That is the real estate business model for all three Phoenix iBuyers, and, I have no doubt, for iBuyers nationwide. Investors might wonder, if the big money in the deal is so screwed up, can the small money be so much better managed? But there is no iBuying without buying high and selling low – which means the real estate part of the transaction-vortex must always lose money.

Better pricing and better marketing can stanch the flow of blood. But this ocean will still be red after all the Wall Street money has bled itself out. Who knew…?

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