As a real estate investor (not trader/flipper), I know from experience that Zillow's algorithm to estimate price is highly unreliable. Other sites, such as Redfin, typically have a better cost estimate. If Zillow was using their altorithm, then it is no wonder they struggled. You can't buy something at a discount to its value if you don't know the value! A simple offset analysis will do a better job than Zillow's algorithm. House flipping is risky in general (like trading in stocks), so investing (owning) is better in general, but there should be no excuse to lose money in a rising market, so their performance is doubly worse based on the economic environment in which they failed.