Zillow's $1.6 Billion Dollar Mistake: What NOT To Do

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 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/

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