Opendoor raises $135M from Lennar Corp. and Fifth Wall fund for expansion

Funds will help expand Opendoor footprint and “trade-in” partnership with Lennar

TRD New York /
Jan.January 24, 2018 01:50 PM

Co-founder and CEO of OpenDoor Eric Wu, and Lennar CEO Stuart Miller (Credit: LinkedIn, Forbes)

A San Francisco-based startup that helps people sell their old homes and simultaneously moves into new ones is partnering with Miami-based homebuilder Lennar Corp., and amassing real estate funding to more than double its footprint nationwide this year.

Lennar provided $100 million in debt to Opendoor to go with $35 million in recently raised equity from the LA-based real estate-backed venture capital firm Fifth Wall Ventures, according to Bloomberg. The partnership has Opendoor helping Lennar customers sell their old homes and move into their newly built ones.

Opendoor’s so-called trade-in program works like this: a buyer first lines up any home on the MLS. The person then sells the old home to Opendoor, closing on both in the same day and moves. Opendoor invests in repairs to the old home when necessary, and lists it on the market. The company says its average service charge is 7 percent and can close a sale of a client’s old home in as quickly as three days. But it added that customers care more about the getting a fair market value offer quickly — within 24 hours — and then closing on their timeline. That would eliminate eliminate double moves, double mortgages, and would give them the chance to make a stronger offer on a new home, the company said.

Lennar specializes in single-family homes in planned communities and became the largest U.S. homebuilder in October when it agreed to purchase CalAtlantic Group in a cash and stock deal worth $9.3 billion. Combined, they recorded more than $17 billion in deals in 2016 and have an interest in more than 240,000 homes in 49 markets nationwide. It recently purchased a 30-acre development site in Davie, Florida approved for 180 townhomes for $9.65 million.

Fifth Wall was founded in 2016 and has since raised hundreds of millions of dollars for what it calls the first fund backed by real estate money that only invests in property tech startups. CBRE, Prologis, Hines, and Equity Residential are among its investors. Fifth Wall invests in startups that have technology its clients want to use to fund the development of their products, and connects them with their clients, and did so with Lennar and Opendoor. [Bloomberg] — Dennis Lynch


Related Articles

arrow_forward_ios
The penthouse at 15 Union Square West and 121 East 22nd Street (Credit: StreetEasy)

Luxury market checks off another disappointing week of sales

Clockwise from top left: 522 West 29th Street, 40 East 75th Street (center), 820 Fifth Avenue, 54 Thompson Street and 220 Central Park South 

These were the five priciest residential listings in NYC last week

Faith Hope Consolo (Credit: Getty Images)

Faith Hope Consolo’s secret family probes her will

William Zeckendorf and his brokerages are making moves. (Credit: iStock, Getty Images)

William Zeckendorf wants to build an army of NYC homeowners

U.S. Rep. Alexandria Ocasio-Cortez and Sunnyside Yards (inset) (Credit: Getty Images and Wikipedia)

AOC resigns from Queens megadevelopment steering committee

Keeping lawns freshly cut and outdoor spaces in tip-top shape could result in greater rewards for sellers. (Credit: iStock, IMDB)

Curb your enthusiasm: Homes with spruced-up outsides sell at premium

Elsa Segura (left) was arrested in connection to realtor Monique Baugh's (right) murder (Credit: iStock)

Second suspect charged in real estate agent’s abduction, murder

Rami Zeidan, Ashton Kutcher, and Life House properties

Hotel management startup Life House raises $30M for national expansion

arrow_forward_ios
Loading...