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Another One Bites the Dust

Another One Bites the Dust

How many times have you heard the saying "Real Estate is a tough business..."?  Well, it seems that the old adage has claimed yet another victim in a relatively short period of market unrest.  The latest among these casualties is Redfin, which is laying off about 862 employees or around 13% of its overall workforce.  Of those 862 jobs being cut, 264 are directly related to RedfinNow, the recently formed iBuying arm of the real estate brokerage.  The process of iBuying is an algorithmic process by which the Company buys a property in As-Is condition and either re-sells it after repairs, or the company flips it if there is enough margin to do so after the purchase is complete without doing much of anything in the way of repairs or updates.  If it sounds a lot like "wholesaling" there's a good reason for that...because in a nutshell that's exactly what it is.  To do this on a larger scale made sense on paper to many, but it turns out that massive amounts of cash and personnel were needed to have a successful go at it, and because the margins or rate of return was typically pretty small, market deviations or corrections could prove devastating.  Just ask Zillow.  Homes bought at higher prices only a few short months ago have now become devalued because of rising inventory and reduced buying power brought on by skyrocketing interest rates.  With interest rates showing no signs of retreat while home prices, while declining slightly, still remain higher in many places than this same time last year.  We remain true to our position that we've stated since the start in that "Algorithms don't buy and sell real estate, people do".  Buying low and re-selling at a profit takes time, knowledge, capital, manpower, and above all else patience.  Those requirements make this a complicated business even when the market is not so disagreeable, so looking at what's happened over the last 4-6 months leaves no surprise to hear of this latest round of downsizing.  When we created PropertyGuerilla.com one of our core beliefs was that the real estate portion should be left to those seeking to Buy or Rent, to Sell or Lease, Realtors, Agents, and Brokers and Industry Professionals altogether.  Our function was intended to be, and still remains only as a conduit to create direct and discrete lines of communication between those parties.   We're not a Redfin, we're not a Zillow....and you know what?  We never wanted to be.  #realestate #iBuying #buyingrealestate #sellingrealestate #redfin #zillow #realtor #agents #propertyguerilla #interestrates #realestatewholesaling #wholesaling    

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