I want you to try a little experiment with me.
It involves a bit of mental time travel. I want
you to think back to the last time you had to
sell a car. Oh, I'm already getting stressed.
Right. Not the fun part where you get the new
one, but that miserable part where you have to
get rid of the old one. Oh, I know this movie.
You're talking about the weird Craigslist meetups
in a grocery store parking lot at 8 p .m. at
night with some guy who might or might not show
up. Exactly. The weird texts, the constant lowball
offers, the guy who wants to pay you in some
crypto you've never heard of or trade you a jet
ski. It's just. It's a nightmare. It is a total
nightmare. But then think about the alternative.
You drive to a CarMax or a dealership. You pull
in. A guy with a clipboard walks around your
car, checks the odometer, maybe kicks a tire,
takes something into an iPad, and 20 minutes
later, bam. Check in hand. You walk away. You
walk away. It's done. It is the ultimate exchange
of value for convenience. You know you're probably
leaving a few hundred, maybe even a thousand
bucks on the table compared to a private sale.
Yeah. But you don't care. Not at all. You paid
that money to avoid the headache. And in finance,
we call that removing friction. Right. Friction.
Take that exact concept, that instant liquidity,
that CarMax experience and apply it to the single
biggest, most terrifyingly expensive and most
illiquid asset you will ever own. Your house.
Your house. This is the holy grail. I mean, this
is what people in fintech and prop tech have
been dreaming about for decades. Imagine you
get a new job across the country. You don't clean
the house. You don't stage it with fake fruit
bowls and sad beige furniture. You don't have
to, you know, herd your family and your dog out
the door every Sunday. afternoon for an open
house, you just push a button on an app. An algorithm
somewhere in a server farm in Virginia looks
at your house from space, or at least from Google
Maps, crunches some numbers, and wires you half
a million dollars. That is the promise. It's
a beautiful promise. It's the sci -fi future
of real estate, where a home is just like a share
of Apple stock. It's liquid. It's tradable. It's
instant. But as we know, sci -fi stories usually
have a twist, right? There's always a point where
the robot turns evil or the spaceship blows up.
And today we are doing a deep dive into the company
that tried to build that spaceship. We are talking
about Open Door Technologies. And this is a story
that has absolutely everything. I mean, it has
the hubris of Silicon Valley. It has billions
and billions of dollars in venture capital. It
has a spectacular, truly epic crash. Oh, yeah.
And now. Here in 2026, it has this fascinating,
gritty, maybe even surprising attempt at a comeback.
We have a massive stack of research here today.
We've got the 10K filings, which are, you know,
the official financial reports. We've got the
FTC complaints. And we are definitely going to
read from those because they are spicy. They
are very spicy. And we've got the whole history
of the iBuyer movement. Our mission today isn't
just to look at a tech stock. It's to figure
out. can you actually turn a house into a commodity?
Or is real estate just too messy, too emotional,
and too physical for an algorithm to truly understand?
And we have to ask the big question that goes
with that. When an algorithm buys your house,
who is actually taking on the risk? Because as
Opendoor found out the hard way, when you own
the asset, you also own the disaster. So let's
rewind. We need to go back to a time when...
Interest rates were basically zero. Hope was
incredibly high. And disruption was the only
word that mattered. The before times. 2014. San
Francisco. Exactly. The golden age of the unicorn.
When every startup was going to change the world.
And get a billion dollar valuation for doing
it. Right. So Opendoor was founded in 2014, and
the founding team isn't just some random group
of college dropouts with a good idea. This was
a super group, a tech all -star team. It really
was. You had Keith Robois, Eric Wu, Ian Wong,
and J .D. Ross. Now, if you follow tech Twitter
or Silicon Valley lore, you know some of these
names. Keith Robois is a heavy hitter. He's part
of the original PayPal mafia, you know, that
group that includes Elon Musk, Peter Thiel, Reid
Hoffman. He has this very aggressive, very distinct
sort of libertarian world. And Eric Wu, he was
the real estate guy, right? Eric was the domain
expert. He was crucial. He had already built
and sold a real estate data startup called Movedi
to Trulia. So he understood the data side of
housing, which was, you know, the secret sauce
they were promising. Okay, so you have the big
picture visionary and the industry expert. And
their pitch was simple, but incredibly audacious.
They basically said, real estate is the last
major asset class in the world that hasn't been
truly digitized. You can buy stocks instantly.
You can buy crypto instantly. You can buy a car
instantly. Why does it still take 90 days, an
army of middlemen and a mountain of paperwork
to sell a house? It's a great question. And the
money loved this pitch. Oh, they couldn't get
enough of it. They raised nearly $10 million,
$9 .95 million to be exact, right out of the
gate in a seed round led by Coastal Ventures,
which for 2014 was a massive seed round. I want
to pause on the actual mechanism here, though,
because iBuyer is a buzzword that gets thrown
around, but we need to unpack how it actually
works. How is this fundamentally different from,
say, Zillow? This is the most important distinction
to understand about this whole story. Yeah. And
it's where all the risk comes from. Traditionally,
a company like Zillow or Redfin, they're marketplaces.
Right. They're like eBay or a classified ad page.
They introduce a buyer to a seller and they take
a little fee, usually ad revenue from agents
or a referral fee for making that introduction.
They are what we call asset light. Zillow doesn't
care if my house has termites. Zillow does not
care at all if your house has termites because
Zillow never, ever owns your house. They're just
the billboard. Okay. If I sell my house on Zillow,
Zillow never writes me a check. Someone else
does. Exactly. Opendoor is an iBuyer, an instant
buyer. They are a market maker. And this is the
key. Think of them like the... currency exchange
booth at the airport. They have a massive pile
of cash. You come to their window, you give them
your asset, in this case your house, and they
give you cash instantly. At that moment, they
take the house onto their own balance sheet.
They own it. They own it. So they are paying
the taxes. They are paying the insurance, the
electricity bill. They are fixing the leaky faucet.
They're mowing the lawn. And then, and this is
the business, they try to sell it to someone
else for a small profit. So in plain English,
they are house flippers. They are house flippers.
But there's a huge difference in scale. A typical
house flipper is, you know, a guy named Dave
with a pickup truck who does maybe two, three
houses a year. Opendoor wanted to be a robot
named Dave that flips 50 ,000 houses a year.
And that scales the risk enormously. I mean,
if Dave the flipper buys one bad house in a bad
neighborhood, Dave loses money on that one deal.
It's a bad year for Dave. It's a bad year for
Dave. But if Opendoor's algorithm misprices an
entire zip code and they buy 10 ,000 bad houses
at once. Then you lose hundreds of millions of
dollars in a single quarter. And we saw that
happen. The core of their business model was
the fee. They charged the seller a service fee,
which they argued was roughly the same as the
5 or 6 percent you'd pay a traditional real estate
agent. And then on top of that, they deduct the
estimated cost of repairs. Okay, let's talk about
those repairs for a second. Because anyone who
has ever owned a home knows that the word repairs
is a financial black hole. You think it's a $500
patch on the roof and suddenly you're replacing
the entire decking for $10 ,000. How does an
algorithm looking at photos online know that
the basement smells a little bit like mildew
when it rains? It doesn't. And that is a classic
economic problem called adverse selection. Right.
The people most likely to want to sell their
house instantly for cash with no questions asked
are often the people who know their house has
issues that would scare away a regular family
doing a thorough inspection. The person with
the crack in the foundation that they've cleverly
hidden behind a bookshelf. Exactly that person.
Opendoor tried to solve this with video walkthroughs
and hiring local inspectors, but you can't code.
creaky floorboards or that weird neighbor with
the loud dog into a spreadsheet very easily.
So they are taking on massive, massive capital
risk. But in the late 2010s, risk was in fashion.
Risk was cheap. This is so important. Interest
rates were historically low, meaning Opendoor
could go to big banks and get credit lines for
billions of dollars at very, very low rates to
buy these houses. It was almost free money for
them. And speaking of basically free money, enter
SoftBank. The Vision Fund. the ultimate kingmaker
of that era. In 2018, Masayoshi Sun SoftBank
dropped $400 million into Opendoor. This was
the moment the company went from being an interesting
startup to, wait, are they going to own every
house in America? A $400 million check. They
have a huge validation. By 2019, they were privately
valued at nearly $4 billion. They were a certified
unicorn. And they weren't just content with the
buying and selling part of the transaction, right?
They wanted the whole pie. They wanted the full
stack. This is a classic Silicon Valley strategy.
Uber doesn't just want to be your taxi. They
want to deliver your food with Uber Eats and
your packages with Uber Freight. Own the whole
customer relationship. Right. Opendoor acquired
a title and escrow company called OS National.
Then they launched Opendoor Home Loans. The logic
was, if we're already controlling the transaction,
Why are we letting some bank get the interest
payments on the mortgage? Why are we letting
a separate title company get the closing fees?
We should keep every single dollar associated
with this house changing hands. It makes perfect
sense on a whiteboard. It's a closed loop, a
flywheel. You buy the house, you provide the
loan to the next buyer, you handle the title.
More revenue at every step. It is a beautiful
flywheel. Until that flywheel hits a brick wall
at 100 miles an hour. March 2020. The COVID shock.
The day. The world stopped turning. Take us back
to that moment inside a company like Opendoor,
because for a business that relies entirely on
liquidity, on being able to buy and sell houses
fast, a global lockdown must have been an absolutely
terrifying prospect. It was an existential cardiac
arrest. Think about it. In March 2020, the entire
world stopped. Opendoor was sitting on hundreds
of million, if not billions of dollars worth
of houses on their balance sheet that nobody
was legally allowed to visit. Their liquidity.
The ability to turn those houses back into cash
dried up instantly. On March 20th, they suspended
all home buying across the country. Cold turkey.
Flip the switch. Cold turkey. The machine just
stopped. We're not buying your house today. Sorry.
And they also laid off 600 people, which was
35 % of their entire staff, in a single Zoom
call, effectively. It was brutal. At that specific
moment, it looked like the iBuyer experiment
and over. It looked like a fatal business model
flaw had been exposed. But then one of the weirdest
things in modern economic history happened. We
didn't go into a deep, prolonged housing depression.
We went into a housing mania. The V -shaped recovery.
It was completely unexpected. Everyone was stuck
in their tiny apartment staring at the same four
walls, realizing they hated their roommate so
they desperately needed a home office. And the
government, the Fed. Slashed interest rates to
zero. Making money free again. Suddenly, demand
for single -family homes with a yard went vertical.
It was a buying frenzy. An open door, to their
credit, pivoted fast. They did. By May 2020,
just a couple of months later... They were back
in the market and they had a brand new pitch,
which was perfectly timed. It was the contact
-free home sale. Ah, clear. You don't want strangers
breeding in your house during a global pandemic.
You don't want to deal with open houses. Sell
to us. We'll do the whole thing digitally. It
was the perfect product for that very specific,
very strange moment in time. And this incredible
turnaround, this recovery, brings us to the next
chapter of the story. The SPAC. We need to really
unpack this because looking back now from 2026,
the SPAC boom of 2020 and 2021, it feels like
a collective fever dream. It was financial hysteria
on a scale we haven't seen in a long time. So
a SPAC stands for a special purpose acquisition
company. And it's basically what it sounds like.
A blank check company. A shell company. A total
shell company. A celebrity investor or a well
-known financier raises a bunch of money from
the public markets. lists this empty shell company
on the stock market that has no business, no
product, no employees, nothing but a pile of
cash. And they basically say to investors, trust
me, I'm going to go find a cool private company
to buy with your money. It's like giving your
friend $20 and saying, go into that store and
come out with something cool for me. Exactly.
And the celebrity friend in this particular case
was Chamath Palihapitiya. The SPAC king. He was
the king. He was absolutely everywhere at that
time. He was on CNBC every day. He was on the
All In podcast. He was tweeting incessantly.
And he positioned himself as the Warren Buffett
for the new generation, for the tech generation.
He found Opendoor and he said, this is it. This
is the one. This is the Amazon of real estate.
And because it was a SPAC merger, not a traditional
IPO, they could play by slightly looser rules
when they were selling this story to the public,
right? Yeah. This is a critical point that people
miss. In a traditional initial public offering,
the SEC is very, very strict about what you can
say and what you can predict. You mostly have
to talk about your past performance, your historical
results. You can't just make up numbers for the
future. You cannot. But in a SPAC merger, because
it's technically a merger and not an IPO, you
are allowed to publish forward -looking statements.
You can show a chart that goes straight up and
to the right for the next 10 years and say, This
is what we think we will do. So they didn't just
sell the past. They sold the dream. They sold
the absolute dream. They put out these presentations
projecting massive exponential revenue growth.
They projected turning profitable in just a few
years. And the market, which was hungry for anything
tech related, just ate it up with a spoon. So
the mergers announced in September 2020. It closes
in December. Right. And it starts trading on
the stock market under the ticker symbol open.
And the valuation just skyrocketed. At its absolute
peak in early 2021, Opendoor was valued at roughly
$18 billion. $18 billion. For a company that,
let's be honest, we just described as a pawn
shop for houses. That's a harsh way to put it,
but financially, it's not an inaccurate description
of the risk profile. They are a capital -intensive,
low -margin business. But at $18 billion, they
were being valued like a pure software company,
like Microsoft. And software companies have,
what, 80 % margins? Exactly. When Microsoft sells
another copy of Windows, the marginal cost is
zero. It's pure profit. When Opendoor sells a
house, they first have to pay for the house.
Their gross margins are like 5 % or 6 % on a
really good day. it's a completely different
business but nobody cared about margins in 2021
they just cared about one thing growth growth
at any cost and opendoor gave them growth on
a scale that is honestly hard to comprehend in
the single year of 2021 they went on a buying
spree They bought nearly 37 ,000 homes. 37 ,000
homes. Just try to visualize that for a second.
That is a medium -sized American city. That is
every single house in a massive suburb. They
owned it all. And this is where the inventory
trap was set. They were aggressively buying these
tens of thousands of homes at the absolute peak
of the market frenzy. They were competing with
regular families, sometimes bidding up prices
against them, because their algorithm was programmed
with one simple truth. Housing only goes up.
Famous last words. And then the music stopped.
2022. The Federal Reserve, led by Jerome Powell,
looks at runaway inflation and says the party
is over. They start hiking interest rates faster
and more aggressively than they had in 40 years.
So in the blink of an eye, mortgage rates go
from a historic low of 3 % to over 7%. And what
happens when mortgage rates double? A potential
buyer's purchasing power gets cut in half almost
overnight. A family that was pre -approved for
a $500 ,000 house in January can now only afford
a $350 ,000 house in July. Demand just vanished.
But Opendoor was still sitting on a balance sheet
with 37 ,000 houses that they had bought at peak
2021 prices. This is the nightmare scenario.
This is the exact reason Zillow had shut down
their own iBuying business a year earlier. They
saw this coming and got out. Opendoor drove right
off the cliff. In the fourth quarter of 2022,
the numbers that came out were absolutely horrific.
They sold about 7 ,500 homes in that quarter.
And on average, they lost $28 ,000 on each and
every one. I want to just drill into that number.
A $28 ,000 loss per house. That's not just, oh,
we didn't make a profit. That is literally taking
a brand new Toyota Camry, parking it in the driveway
of every single house you sell, and setting it
on fire. It's an unbelievable amount of value
destruction. And it's even worse if you look
at the aggregate numbers. For the full year of
2022, Opendoor lost $1 .4 billion. A billion
with a B. How does the math even work there?
Can you walk me through the life cycle of one
of those losing houses? Sure. It's a painful
but simple story. Okay, let's say they bought
a house in Phoenix for $500 ,000 in our March
of 2022. Their algorithm, looking at past sales,
projects they can sell for $540 ,000 in a couple
of months. A nice 40K profit. On paper, yeah.
But by June, rates have shot up, the market is
frozen, and the actual market value of that house
has dropped to, say, $460 ,000. So they are already
down $40 ,000 just on the asset price. They're
underwater. Deep underwater. But that's not all.
They also spent $15 ,000 fixing the carpets and
painting the walls. They also had to pay three
months of property taxes, insurance, and... This
is the crucial part. Interest on the massive
loan they used to buy the house in the first
place. Ah, the cost of capital, the carrying
costs. Exactly. When the Fed raises rates, Opendoor's
own borrowing costs go up, too. So they're getting
squeezed from both sides. The asset they own
is worth less and it costs them more money every
single day to hold it. So they finally give up
and they dump the house for $460 ,000 just to
get the cash back and stop the bleeding. But
when you add it all up. They're all in for maybe
$530 ,000. That is a bloodbath on a single transaction.
Multiply that by thousands. And it completely
destroys this core argument that our algorithms
are smarter than people. It really does. The
algorithm is only as good as the data you feed
it. And it relies on comps, comparable sales.
But comps are, by definition, historical data.
They tell you what a house down the street sold
for last month. They don't tell you what a nervous
buyer is willing to pay today when Jerome Powell
just raised interest rates by 75 basis points
for the third time. The algorithm was looking
in the rearview mirror while the car was driving
headfirst into a swamp. And while all of this
financial disaster was unfolding, they were also
losing something just as valuable. Trust. We
have to talk about the FTC. Because this part
of the story, for me, really rubs me the wrong
way. The Federal Trade Commission settlement,
this was announced on August 1st, 2022, and it
was a bombshell. What exactly were they accused
of? What was the charge? The charge was, in a
nutshell, deceptive marketing. The FTC had gone
back and analyzed Opendoor's own marketing materials,
the charts and graphs and comparisons they showed
to potential home sellers to convince them to
take their offer. The sales pitch. The sales
pitch. And Opendoor consistently claimed that
by selling to them, you would actually make more
net profit than by listing your home on the open
market with a traditional agent. How did they
argue that? They'd say, well, you save on repair
costs, you save on aging commissions, you save
on staging costs. They made it look like their
offer was the financially superior choice. And
was that true? The FTC said absolutely not. In
fact, the FTC's investigation found that for
the vast majority of consumers, selling to Opendoor
cost them thousands of dollars more than a traditional
sale would have. They found that Opendoor was
bundling hidden fees into their offers and that
their repair estimates were often inflated way
above market rates. So they were telling people,
look at all the money you're saving by using
us while simultaneously reaching into their other
pocket and taking their wallet. That is essentially
what the FTC concluded. The headline was convenience
and savings. But the fine print was, according
to the government, exploitation. Opendoor had
to settle the case. For how much? The settlement
was for $62 million. $62 million. Now, is that
a lot of money for a company this size? Financially.
I mean, honestly, it's a drop in the bucket compared
to the $1 .4 billion they lost in the market
that year. It's a rounding error. But reputationally,
it's pure poison. It's devastating. It confirms
every skeptic's worst suspicion that this tech
disruption is just a fancier, more sophisticated
way to rip you off. It damages the brand. in
a way that's really hard to repair. So let's
recap where we are at the end of 2022. The stock
price has completely collapsed. They've gone
from an $18 billion market cap to barely $1 billion.
That's a 94 % drawdown from the peak. Most companies
die here. They go bankrupt. They get sold for
parts to a private equity firm. They absolutely
do. This is usually the end of the story. But
Opendoor didn't die. And this is the part of
the story where we have to give them some credit
for, I don't know if it's resilience or just
pure stubbornness. This brings us to Chapter
4, Leadership Roulette and the Pivot. That's
a good name for it. Because things started changing
at the time. Eric Wu, the original founder, he
stepped down as CEO. Carrie Wheeler, who was
a CFO, took over in early 2023. She's a finance
pro. Her job, very clearly, was to stop the bleeding.
She was the turnaround specialist. She was there
to slash costs, manage the inventory, and just
stabilize the ship before it sank. And she did.
She cut the workforce again. Another huge layoff,
22 % of the company, in April 2023. It's just
brutal. It seems like every time the algorithm
gets the housing market wrong, 500 real human
beings lose their jobs. That is the dark side
of this business model. Labor is treated as a
variable cost that you can turn on and off like
a spigot. When inventory is high and you're buying
a lot, you hire people to manage it. The second
you stop buying, you fire them. It's an extremely
volatile way to run a company for the employees.
So Kerry Wheeler stabilizes the ship through
23 and 24. But then let's jump forward to the
really recent news. September 20, 2025, just
a few months ago in our timeline, another massive
leadership shakeup. This was a big one. This
was the return of the founder energy, as they
say in the Valley. What does that mean? It means
Keith Rapois. Remember him from the very beginning,
the PayPal mafia guy, the aggressive visionary.
He comes back to the company as chairman of the
board, and they appoint a brand -new CEO, a guy
named Kaz Najation. And who is Kaz? What's his
background? Kaz was the chief operating officer
at Shopify, and he is known for being extremely
operationally rigorous, a very... no -nonsense
kind of executive. He famously canceled all recurring
meetings at Shopify to train to increase productivity.
He's a wartime general type of leader. Not a
peacetime manager. Not at all. He's there to
execute a turnaround. And the market loved this
news. Oh, the stock popped 30 % on the day of
the announcement. Investors looked at this combination
of Rabois and Ejacian and said, OK, the defensive
era under Kerry Wheeler is over. These guys aren't
here to manage a slow decline. They are here
to go on offense. But how can they go on offense?
The housing market is still tough. Rates are
still relatively high. What's the new strategy?
What are they doing differently now? It seems
to be a mix of renewed aggression and newfound
partnership. First, they stopped trying to kill
their competitors like Zillow and Redfin. They
partnered with them. So if you can't beat them,
join them. Basically. Now, if you are browsing
on Zillow, you can see a button that says get
an instant offer from Opendoor. They became the
back -end liquidity provider for the whole real
estate internet. They became frenemies. Exactly.
Better to get a slice of Zillow's pie than no
pie at all. Second, and this is a bit counterintuitive,
they doubled down on some of the most expensive
and high -value markets, like the Bay Area. Wait,
why would they do that? That seems way riskier.
A single house in San Francisco costs, what,
$1 .5 million? Yeah. If you get that wrong, the
loss is huge. It is much riskier, but the potential
spread, the profit margin, is also much bigger.
Think about it. If you charge a 5 % fee on a
$200 ,000 house in Cleveland, you make $10 ,000.
That barely covers your operational costs. But
if you charge that same 5 % fee on a $2 million
house in Palo Alto, you make $100 ,000. The paperwork
cost is the same. The inspection cost is roughly
the same. So the unit economics work much, much
better on expensive homes if, and this is the
giant if, you don't misprice the house. A very
big if. A company -defining if. So that brings
us to today, early 2026. Let's look at the scorecard.
The 2024 annual report came out a few weeks ago.
Give us the financial reality check. Are they
healthy? Is this thing working? Healthy is a
very strong word. I would call it stable but
fragile. Let's look at the top line first. Revenue
was $5 .15 billion for 2024. So they are still
moving a lot of metal or wood and drywall in
this case. It's a real business with real volume.
But what about profit? Are they making money
yet? No. Net income was negative $392 million.
So they are still losing a ton of money. They
are. But, and this is the bull case for the company,
you have to compare that to the $1 .4 billion
they lost back in 2022. They have successfully
reduced their annual losses by about 70%. That
is a massive operational improvement. But you
cannot lose almost $400 million a year forever.
The clock is ticking. I'm looking at their balance
sheet from that report. Total assets. $3 .13
billion total equity. $713 million. Can you translate
that for us, non -CFOs? Sure. It means they are
highly leveraged. Equity is the part of the company
that the shareholders actually own, free and
clear. The assets include all the homes they
bought using borrowed money, using debt. A debt
-to -equity ratio of roughly 4 to 1 isn't totally
insane for a real estate company, but it leaves
very, very little room for error. What do you
mean by that? It means if the overall value of
their assets, the thousands of homes they own,
drops by just 20%, their entire equity position
is wiped out. They're insolvent. So they're walking
a very high tightrope. A very high tightrope
in a very windy city. And they are doing it with
a much smaller team. The employee count is down
to 1 ,100 people now, down from thousands at
the peak. And that's the tech part of their story
finally kicking in. They're trying to automate
everything they possibly can, automate the pricing
offers, automate the scheduling of contractors,
automate the title transfer process. They're
trying to remove the expensive human from the
loop wherever possible to lower their costs.
One number that really jumped out at me from
their recent report was the inventory hold time
They said the average is now 90 days. That is
the killer metric. That is the number that keeps
their CEO up at night 90 days. Why is that one
number so critically important? Because of the
carrying costs we talked about earlier. Let's
do some quick back of the napkin math. You buy
a house for $500 ,000. You borrow that money
from a bank at, let's say, 6 % interest today.
That loan alone costs you roughly $82 every single
day in just interest payments. Then add property
taxes, maybe another $20 a day. Insurance, $5
a day. utilities to keep the lights on, $10 a
day. You are burning over $100, maybe $120, every
single morning you wake up and still own that
empty house. So every single day that house sits
on the market, the potential profit margin shrinks.
It just milks away like an ice cube on the sidewalk.
If you can buy it and sell it in one day, you're
a genius. If you sell it in 90 days, you've burned
through more than $10 ,000 just in holding costs
before you even account for repairs or fees.
If it takes 180 days to sell, you are almost
certainly taking a big loss. Speed is the only
thing that matters in this business. And that,
I guess, explains why they have to be so much
more aggressive with their offers now. They can't
afford to be generous with sellers anymore. They
have to build in a bigger bucker for themselves.
Right. And that brings us right back to the original
value proposition for the consumer. If Opendoor
has to offer you less money for your house to
protect themselves from market risk, is the convenience
factor still worth it? That is the ultimate question,
isn't it? We started this whole deep dive talking
about friction. Opendoor's entire premise is
that they remove the friction of selling your
home. But friction has a price. In 2021, when
money was free and the market was screaming upwards,
Opendoor and their venture capital backers subsidized
that price. They deliberately overpaid for houses
just to gain market share. Now, here in 2026,
that subsidy is gone. The consumer The home seller
has to pay the full true cost of that convenience.
It's exactly like the Uber model. Remember when
you could get an Uber ride across town for $6
because investors were subsidizing it? Oh, yeah.
And now that same ride is $45. Exactly. The investors
stopped paying for part of our rides, and now
Opendoor's investors have stopped paying for
part of our home sales. So the question for you,
the listener, is how much is your sanity worth?
How much would you pay? to avoid those open houses
and that uncertainty. Is it worth $20 ,000? Is
it worth $50 ,000? Because that is the kind of
spread Opendoor now needs to survive and eventually
thrive. It's just fascinating because despite
the spectacular crash, despite the billions in
losses, despite the layoffs, despite the FTC
settlement, the core vision hasn't died. The
dream of push -button sell house is so powerful
and so compelling that Wall Street keeps giving
them chance after chance to get it right. It
is the largest undisrupted market in the entire
world. U .S. residential real estate is a $30
trillion asset class. Trillion with a T. Even
if Opendoor only ever sustainably captures 1
% of that market, it is a massive, highly profitable
company. That is the prize. That is why Keith
Robbois came back. That is why SoftBank held
on through all the pain. The potential reward
is just too big to ignore. But getting there
requires turning a home, a place with memories
and quirks and emotional baggage for people,
into just another data point on a server. And
it requires building an algorithm that can predict
the future of interest rates and market psychology
better than the Federal Reserve can, which, as
we've seen over the last few years, is a very,
very tall order. I want to wrap up with a final
thought for everyone listening to this. We often
talk about big tech. watching us, our search
history, our location data, our shopping habits.
But Open Door represents a completely different
kind of digitization. They are digitizing the
physical world. They are turning your neighborhood,
your block, your cul -de -sac into an Excel spreadsheet
of assets to be traded. And when you do that,
you introduce the volatility and the cold, hard
math of the stock market into the place where
you sleep at night. So if you are thinking of
selling your house in 2026, you now have this
very modern choice. You can call a local agent,
bake some cookies for the open house, and deal
with all that human friction. Or you can log
in, get an instant offer from the algorithm,
and see what the machine thinks your life is
worth. Just maybe check the fine print this time.
And I'd recommend not spending the money until
the check fully clears. Wise words. Thanks for
joining us on this deep dive into the rise, the
fall, and the truly fascinating reinvention of
Opendoor. It's a wild story, and I have a feeling
it's not over yet. Not even close. This is just
the beginning. We'll see you on the next one.
Stay curious.