Despite some incredible success, Zillow has recently run into some hurdles which caused their market cap to decline by $1.6 Billion - here’s why. Add me on Instagram/Snapchat: GPStephan
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The cause for this has been their two newest business models: The first, its home flipping business. And second, their newest addition: a mortgage company, where Zillow can now begin to originate their own loans.
The criticism comes from both home owners and investor expectations…for home owners, the process isn’t quite as fast as they seemed. Flipping homes is also risky. Tying up assets is risky. Spending your resources home flipping can be a delicate matter,
But now, Zillow expands into a different market…the mortgage market. And oddly enough, the stock continues to drop. Why? For INVESTORS…which, lets be real, this is a business that has to appease INVESTORS…this just means uncertainty and risk. Getting into the mortgage industry at a time where rates have begun going UP is, again, maybe another risk that they didn’t need to take. With investors uncertain about its slowing growth, its high expectations from home flipping, and rising rates…it makes sense that investors would be spooked about ANYTHING the company does that isn’t it’s core business…which is advertising.
Zillow makes a LOT of money from their Zillow premier agents, and it’s a pretty good business all the way around. THIS is the platform they should expand further…since they’re in advertising, have homes LINK to furniture you can buy. Promote architects. Promote contractors. Promote ANYTHING related to homes that buyers or sellers want to see…ANYTHING. Promote Premier Lenders! Promote Premier Contractors!
Zillow has slowly been seeing a saturation of premier agents on their site as growth has slowed. The reality is that prices are climbing, competition is fierce, and agents are spending their money wisely. It’s this uncertainty and risk taking that could be Zillow’s downfall, or it’s saving grace. In my opinion, originating loans makes sense…anything to streamline the process, in my opinion, is a positive. But do I think THIS is the right time to do that, as their growth is slowing and as rates are rising? Eh, maybe not. Instead, I believe their core focus should be advertising first and foremost, everything else secondary. Continue growing the advertising platform, while at the same time offering more options for the people watching the site, and this is recipe to success. But what do I know.
I think the simple lesson is not to deviate too far away from what works. If you have something that works well, expand on it. Add to it, improve it, and make it better. Don’t necessarily take big risks elsewhere when you have one endeavor working so well.
For business inquiries or one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness @gmail.com
Suggested reading:
The Millionaire Real Estate Agent: http://goo.gl/TPTSVC
Your money or your life: https://goo.gl/fmlaJR
The Millionaire Real Estate Investor: https://goo.gl/sV9xtl
How to Win Friends and Influence People: https://goo.gl/1f3Meq
Think and grow rich: https://goo.gl/SSKlyu
Awaken the giant within: https://goo.gl/niIAEI
The Book on Rental Property Investing: https://goo.gl/qtJqFq
Favorite Credit Cards:
Chase Sapphire Reserve - https://goo.gl/sT68EC
American Express Platinum - https://goo.gl/C9n4e3
Sources:
https://seekingalpha.com/article/4163007-zillow-need-panic-instant-offers
https://www.bloomberg.com/news/articles/2018-08-06/zillow-to-buy-mortgage-lender-to-help-its-home-flipping-business
https://money.cnn.com/2018/04/13/investing/zillow-house-flipping/index.html?iid=EL
https://www.barrons.com/articles/zillow-struggles-to-find-new-growth-1533667427
https://www.bloomberg.com/news/articles/2018-08-07/tesla-jumps-on-report-of-saudis-building-about-2-billion-stake
https://www.marketwatch.com/story/zillow-stock-suffering-biggest-plunge-in-six-years-as-host-of-analysts-slash-price-targets-2018-08-07
https://www.inman.com/2018/08/07/zillow-market-cap-plummets-after-mortgage-acquisition-earnings/
Join the private Real Estate Facebook Group:
https://www.facebook.com/groups/therealestatemillionairemastermind/
Get $50 OFF + FREE Coaching Call FOR A LIMITED TIME: Code THANKYOU50 - The Real Estate Agent Academy: Learn how to start and grow your career as a Real Estate Agent to a Six-Figure Income, how to best build your network of clients, expand into luxury markets, and the exact steps I’ve used to grow my business from $0 to over $120 million in sales: https://goo.gl/UFpi4c
The cause for this has been their two newest business models: The first, its home flipping business. And second, their newest addition: a mortgage company, where Zillow can now begin to originate their own loans.
The criticism comes from both home owners and investor expectations…for home owners, the process isn’t quite as fast as they seemed. Flipping homes is also risky. Tying up assets is risky. Spending your resources home flipping can be a delicate matter,
But now, Zillow expands into a different market…the mortgage market. And oddly enough, the stock continues to drop. Why? For INVESTORS…which, lets be real, this is a business that has to appease INVESTORS…this just means uncertainty and risk. Getting into the mortgage industry at a time where rates have begun going UP is, again, maybe another risk that they didn’t need to take. With investors uncertain about its slowing growth, its high expectations from home flipping, and rising rates…it makes sense that investors would be spooked about ANYTHING the company does that isn’t it’s core business…which is advertising.
Zillow makes a LOT of money from their Zillow premier agents, and it’s a pretty good business all the way around. THIS is the platform they should expand further…since they’re in advertising, have homes LINK to furniture you can buy. Promote architects. Promote contractors. Promote ANYTHING related to homes that buyers or sellers want to see…ANYTHING. Promote Premier Lenders! Promote Premier Contractors!
Zillow has slowly been seeing a saturation of premier agents on their site as growth has slowed. The reality is that prices are climbing, competition is fierce, and agents are spending their money wisely. It’s this uncertainty and risk taking that could be Zillow’s downfall, or it’s saving grace. In my opinion, originating loans makes sense…anything to streamline the process, in my opinion, is a positive. But do I think THIS is the right time to do that, as their growth is slowing and as rates are rising? Eh, maybe not. Instead, I believe their core focus should be advertising first and foremost, everything else secondary. Continue growing the advertising platform, while at the same time offering more options for the people watching the site, and this is recipe to success. But what do I know.
I think the simple lesson is not to deviate too far away from what works. If you have something that works well, expand on it. Add to it, improve it, and make it better. Don’t necessarily take big risks elsewhere when you have one endeavor working so well.
For business inquiries or one-on-one real estate investing/real estate agent consulting or coaching, you can reach me at GrahamStephanBusiness @gmail.com
Suggested reading:
The Millionaire Real Estate Agent: http://goo.gl/TPTSVC
Your money or your life: https://goo.gl/fmlaJR
The Millionaire Real Estate Investor: https://goo.gl/sV9xtl
How to Win Friends and Influence People: https://goo.gl/1f3Meq
Think and grow rich: https://goo.gl/SSKlyu
Awaken the giant within: https://goo.gl/niIAEI
The Book on Rental Property Investing: https://goo.gl/qtJqFq
Favorite Credit Cards:
Chase Sapphire Reserve - https://goo.gl/sT68EC
American Express Platinum - https://goo.gl/C9n4e3
Sources:
https://seekingalpha.com/article/4163007-zillow-need-panic-instant-offers
https://www.bloomberg.com/news/articles/2018-08-06/zillow-to-buy-mortgage-lender-to-help-its-home-flipping-business
https://money.cnn.com/2018/04/13/investing/zillow-house-flipping/index.html?iid=EL
https://www.barrons.com/articles/zillow-struggles-to-find-new-growth-1533667427
https://www.bloomberg.com/news/articles/2018-08-07/tesla-jumps-on-report-of-saudis-building-about-2-billion-stake
https://www.marketwatch.com/story/zillow-stock-suffering-biggest-plunge-in-six-years-as-host-of-analysts-slash-price-targets-2018-08-07
https://www.inman.com/2018/08/07/zillow-market-cap-plummets-after-mortgage-acquisition-earnings/
This aged well 😂
Great video! Your research and understanding have been wise time and time again 👍🏼
Man ur really good at predicting the future
@GrahamStephan: How about an update video on the Zillow, Redfin, Opendoor outlook in 2021?
i like zillow so in the future when i get a job i can motivate myself to getting a big house
Love this video and would love more business analysis content 😉
I wonder how fair they are. I would love to sell my house quickly, but I don't want to lose a ton of money by accepting some greedy company's lowball offer, and believe me, there are a lot of those out there. Do they think sellers are stupid? However, I've heard Zillow makes higher offers, so they're better, but I don't know how much better.
Bro!! Im a rapper im writing to this beat right now while watching ur video! J.dilla Life beat!
amazing video!! you explained it very well.
Zillow is going to start flipping houses ? ? ? ? You mean those people who sit and click on computers all day are going to start flipping houses ? ? ? ? ? I don't think that's a very good idea ! Tell em to stop watching so many house flipping shows . Tell em to just start watching the golf channel all the time . Maybe some cooking shows . If they really want to do something like that let em build a birdhouse , or maybe a napkin holder out of popcicle sticks with Elmer's glue .
So far your analysis is completely wrong. Zillow offers is taking off and the stock price keep climbing. Housing inventory is drying up and the more properties Zillow buys up and controls, the more they can sell them for.
In our market the E buyers are selling properties on the MLS and the quality of the work is a big problem. We have a labor shortage and I don't know how a large company can control the quality of the contractors hired or the materials used.
That's the spirit
Zillow is Ass
Zillow is a good company not amateur hour helping out people good job Superbad rating for a super shity company
when house market crashes, Zillow will go bankrupt with all their properties
HAHAHA, ring ring. Hello. Yes, this is Zillow calling. You wanna sell us your home? Ya sure how much? 200k…..But but but Your website says it worth 250. Hang on sir. Ok…..Look now…… Ohhhhhh, now it says 195. OK! LOL!!
Zillow seems like a scam, It dropped my home value $80,000 after I bought the home in 30 days!
Their stats on flippin is a shame, their numbers suck
Does a soft launch (like Zillow is doing) allow competitors to swoop in and take their lunch money? (By hiring a few devs and copying the idea.) Maybe they should have just enabled it for the whole nation all at once.
All buttons have been smashed.
am the one who got it up but u guys r not doing what am ask for go ahead ama see u guys go down ama step away for a sec or two for doing me dorty
we r buying houses n reting them thats y u lost money
if u want a put it like that we renting only asking for frist n last months rent we r not saling houses
no no no no the army gona b mad really mad
its not a home fliping its a army houses
Literally binge watching your content!! Let me know if you would like to take your talents international!
odd channel-but i like it-i don't understand half the stuff-but its intriguing, its captivating.
This model needs a growing. Price
Great info Graham!
Growth should come from going online in other markets. If they platform is that good they could bought lame duck overseas and turned them around into their technology.
Im going to binge watch all of the vids i missed 😂
Redfin is a much better app to use.