According to sources familiar with the initiative, Opendoor Technologies Inc., which buys homes from consumers and sells them for resale, is in talks with lenders for a new $2 billion revolving credit facility.
One of the persons who did not want to be identified because the matter is private said the company, which is quickly increasing the number of properties it buys, wants to use the funds to help grow acquisitions.
Opendoor's spokesperson declined to comment.
According to sources familiar with the initiative, Opendoor Technologies Inc., which buys homes from consumers and sells them for resale, is in talks with lenders for a new $2 billion revolving credit facility. Opendoor, led by Chief Executive Officer Eric Wu, pioneered iBuying, a data-driven approach to home flipping. After purchasing a home, the company makes minor renovations and attempts to resell it, earning by charging sellers a 5% fee for the convenience of a quick sale.
According to a statement released Wednesday, the corporation bought 8,500 properties in the second quarter, more than double the number it bought in the first three months of the year. At the end of June, it had approximately 8,100 additional homes under contract. In real estate, Opendoor faces an expensive path to profitability. Opendoor uses debt to fund acquisitions, and as of the end of June, it had slightly under $4 billion in borrowing capacity available under existing revolving credit lines. According to a document, the business had borrowed $1.8 billion from those facilities.
Opendoor's primary competitor, Zillow Group Inc., has also made moves to beef up its home-buying capabilities. Earlier this month, the business raised $450 million through a first-of-its-kind bond sale. Last year, Opendoor became public after merging with a blank-check firm led by Chamath Palihapitiya. The company's stock soared as much as 21% on Thursday after it revealed second-quarter profits that above analyst revenue and profit expectations. Through Wednesday, the stock had down 36% year to date.
Opendoor expects to meet a revenue target in the second half of 2021, two years ahead of a plan established when the firm went public last year, because to the quick increase in purchases, according to a letter to shareholders from Wu.