Ribbon - RE startup

I’m missing the point of why any buyer would pay them 1.95% for what amounts to mortgage pre-approval. If your mortgage ends up declined, they buy the house for you and let you rent it. However, if you still can’t get approved a year later then you pay a 2.95% fee to them. It seems like they are re-branding lease option.

I don’t agree at all that it’ll let buyers compete with cash offers. That’d only work if they provided cash for a quick closing then when the buyer gets the mortgage they payback Ribbon. They only provide cash for closing if the mortgage gets declined. Buyers with Ribbon will still have 30-day close which won’t compete with cash offers.

Sounds like a potential disaster if market goes south.

It comes down to how much reserves they have to sustain operations. Ipendoor also does something similar where they buy houses and flips them, and suffer from similar things. If market goes south, they might have liquidity problems