Answer: you say "You know, if I buy this investment thesis, I'm basically agnostic with respect to *which* houses I own given the rough profile of them. I want ten thousand houses, with some diversity in terms of geographic area and price point and the like."
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(They're not loans, etc etc. Just trying to show that the most obvious objection to this is a lot less powerful than people probably think it is, as is frequently true of most obvious objections.)
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Another interesting wrinkle in the model, from the user perspective: when you pick out a house, you're making a cash offer (and therefore can close *extremely* quickly) rather than going through a mortgage approval dance. Your mortgage approval happens ~5 years later.
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This model, OpenDoor, and the like arming lots of buyers with cash offers will have interesting downstream impacts on many, many assumptions about residential real estate purchase, because "financing takes about a month to arrange" is all but a law of nature there.
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Is that from mortgages they were holding or mortgages they originated? Prob doesn’t matter much considering what I imagine is their typical borrower profile.
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Yes. (BoA bought some of their mortgages.)
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2000 has never been a stress test for residential default rates (that goes back to 08 or Great Depression). Downs are skin in the game. One has to be concerned how many more people walk away during a downturn without a lot of money invested. Seems like an interesting thesis....
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