58: The iBuyer Massacre and Why Most Will Never Survive w/Mike DelPrete

On The Market

Zillow, Opendoor, and other iBuyers made quite a name for themselves over the past two years. By buying up every house on the block, iBuyers quickly became the “no work, best price, all cash” alternative to selling through an agent or a wholesaler. These huge, wall-street funded businesses were buying thousands of homes in the blink of an eye, doing some quick repairs, and flipping them in record time. But even with all this activity, iBuyers were slowly hemorrhaging money, causing most of them to crash and burn within the past year.

Now, all that’s left standing is Opendoor and Offerpad, two of the most experienced iBuyers around. But will either of these giants survive until the end of 2023? With home prices starting to plummet, interest rates rising, and last year’s homeowners not looking to move, will Opendoor and Offerpad bleed out before they get another shot at this wild housing market? We brought in real estate tech strategist, Mike DelPrete, to give his opinion on the future of iBuyers.

Mike has been watching iBuyers for a while. He’s seen them creep into towns, buy up inventory, just to sell at a loss months or years later. He knows what competition looks like for real estate investors, and he doesn’t think iBuyers offer much of a threat. Mike walks through the current state of iBuyers, how they could end wholesaler and realtor careers, why most iBuyers were designed to fail, and why companies like Opendoor and Offerpad may be forced to pivot strategies very soon.

In This Episode We Cover

How 2022’s housing market almost destroyed the iBuyer industry

A huge threat to real estate agents and wholesalers from iBuyers

The massive operational expenses that destroyed businesses like Zillow Offers

The iBuyer’s “path to profitability” and why it’s almost impossible to achieve

Why homebuyers are refusing to buy the soulless flips iBuyers offer

Whether or not iBuyers will be able to survive this current housing correction

And So Much More!

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Check the full show notes here: https://www.biggerpockets.com/blog/on-the-market-58

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