What Wholesalers Should Learn From The Opendoor Epidemic
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 They are outdated and ineffective.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.