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so breaking news this morning investor chamos paulie habitia going on cnbc to announce that his spec which is basically a blank check company social capital head of sofia 2 is going to be acquiring or merging with real estate technology company open door now there's been a huge rage in spec spax is a way to go public it seems these days have been a lot of them from nikola to several others is open door the future of real estate or is it just another hyped-up spec well that's what we're going to talk about in today's video new channel my name is dustin this logical finance talk about personal finance investing in economics make sure you subscribe and hit the notification bell if you haven't already if you enjoy this video at all i'd really appreciate it if you hit the like button too so open doors looking to disrupt a real estate market nationwide in the united states they're a technology company where if you want to sell your house you go on you put in your address and then with a matter of a few minutes they spit on an offer for you if you're in one of the markets where they currently work and then if you agree to the offer in a matter of just a few weeks to even just a couple days you can have your house sold and cash in the bank account now are you gonna get as much as you would normally get by going through a traditional real estate agent maybe maybe not if you watch other youtube videos there's real estate agents talking about open door and how they can get you a lot more money and i would say the majority of time my guess is you're probably gonna make more if you either sell it yourself or sell to a traditional real estate agent but that said the concept of being able to just click a couple buttons and have your house sold like that is really interesting to me i currently live in the second house i've ever owned i remember in the lead-up to we were going to be selling our first house there was a house down the street it was on the market for like six to nine months before they finally sold it in our current neighborhood there's a house down the street that was on the market for over a year before they finally just took it off now those are probably all the exception but the fear of being hung out there with multiple mortgage payments multiple expenses of owning maybe one or two houses is a real cost a lot of people don't want to incur so open doors says they can come in and take that risk off of you so while you may or may not get quite as much for your house at least you don't have to deal with the burden i think about trying to sell a house and have people coming through and you got to keep it all nice prim and proper for you know people constantly walking through and you may show it to like 40 people not with open door you click a couple buttons they come through they do some inspections but you don't have to have this parade of people coming to your house especially right now with the pandemic going on so open door is kind of like a real rich guy just coming in and saying hey i'll give you an all-cash offer for your house if you can close in two weeks now i got super excited when i first heard about the deal because chamos said it was going to be priced at one times revenue it's important to know if you're looking at buying this spac that one times revenue isn't exactly probably what you think it is so let's say for example that open door is going to buy a house for two hundred thousand dollars of that they're gonna charge a fee of around six percent which is you know in line with what you'd pay on a real estate commission so that would be twelve thousand dollars and then they turn around and they sell the house a month later for the same two hundred thousand that they bought it for so they booked twelve thousand dollars on the house what they're showing is revenue is two hundred thousand dollars not twelve thousand dollars now on a normal property they're looking to get anywhere from three to about eleven percent when you consider the fees that they're charging which are going to be about six percent on the transaction and then any market appreciation which they hope to get a little bit in there may drop it up to like 11 of the deal so depending on what number you use if you consider that to be revenue you're probably paying 100 times revenue it's a little bit different than one times they're expecting their margins to grow they're looking at doing some vertical integration with some of the closing costs you have things like home warranties home insurance all that mess that you have to pay for whenever you're closing on a house they're going to look to bring some of that in-house which should allow them to expand margins further but the fact is they lost over 300 million dollars in 2019 and they're not expecting to reach profitability until the year 2023 that's assuming that they're able to pick up some of these closing costs and add them to their profit margins now it's being sold as like another amazon or uber and they're saying that they want to make it available to retail investors all those are kind of red flags to me saying that they're going to stick retail with this deal i'm not an expert in this area and please don't take this as financial advice or recommendation to buy or sell or stay away from it i just think the story is really interesting but let me know what you think let me know in the comments down below if this is something you're going to be buying into i know chamoth has a big group of people that like to follow everything he does and so i'm sure there's gonna be a lot of investors looking to buy into this but i don't know i mean if they come in and they completely disrupt the real estate market maybe we say in a few years oh my gosh how do we get it so cheap on the other hand if they aren't able to increase their margins any further than they currently are and people just go back to buying real estate the way they always have this valuation is going to be super rich so let me know in the comments down below what you think if you enjoyed this video hit the like button subscribe and hit notification bell if you haven't already i'm dustin's logical finance i'll see you again soon