Keep pulling the thread on Kaz Nejatian.
Alex's investment thesis for Opendoor was based on the theory that if the company could control 10% of the housing supply in a given market, it could attract 100% of the buyer demand.
At one point, Opendoor was purchasing nearly 10% of all homes for sale under $600,000 in the Charlotte market.
Kaz states that Opendoor historically made a strategic error by viewing itself as an investor in real estate rather than as a software company solving a transaction problem.
Opendoor has launched a new program in Dallas, Texas, that allows customers to return a home they have purchased within a trial period.
Following Opendoor's initial success, Zillow (under returning CEO Rich Barton) and other companies like OfferPad entered the iBuying market to compete directly.
Zillow's iBuying business ultimately failed because it did not properly account for the negative performance of the long-tail of less desirable homes in its purchased cohorts.
Kaz believes that in response to market pressures, Opendoor publicly abandoned its original mission in favor of a de-risking strategy, which he views as a strategic mistake.
Kaz states that Opendoor previously pursued a flawed strategy of only buying homes it believed were significantly mispriced, and is now shifting its goal to transacting homes at a fair price.
Since Kaz became CEO, Opendoor has expanded its service availability from 48 markets to every market in the United States.
Kaz believes Opendoor has the potential to become a generational company.
Despite being a massive asset class, the U.S. residential real estate sector lacks a company with a market capitalization over $100 billion, with CoStar and Zillow being the largest players.
Copart, a public company that auctions totaled cars, has a market capitalization of approximately $70 billion, making it more valuable than Zillow.