A Startup that Straddles Two Bubbles

Real Estate Asset?
OpenDoor CEO Eric Wu tells StrictlyVC that his startup will make money by purchasing houses at 1-3% above their market value three months from now and then selling these homes at a profit. Presumably, any homeowner willing to part with their house at a distressed price has a problem on their hands. They could have a crummy place that no one wants, or they could be facing jailtime: the possibilities are endless. OpenDoor could succeed if it finds just the right intersection of tragedy and opportunity, and OpenDoor’s concept is not new: it is essentially taking the concept behind companies like We Buy Ugly Houses (aka HomeVestors) to a whole new level. That said, it’s easy to see how OpenDoor could be left holding the bag – stuck with millions of dollars in “assets” that no one wants. In this era of “easy money,” tech investors are more than willing to speculate on new technology, but in OpenDoor, they are also betting that today’s “go-go” real estate market will continue. It’s venture roulette all over again. Laissez les bon temps rouler!