(Bloomberg) -- Opendoor Technologies Inc. is adding billions of dollars in borrowing capacity as it races to buy and sell more homes.
The company, the largest of an emerging group of tech-powered home flippers called iBuyers, entered into an amended mezzanine debt facility with a $3 billion limit, according to an Oct. 4 filing. That move, combined with other recent transactions, allows the company borrow as much as $9 billion through non-recourse asset-backed facilities.
Read more: Zillow Home-Flipping Bonds Draw Wall Street Deeper Into Housing
Opendoor’s main business involves buying a home, making repairs and putting it back on the market. Access to short-term debt is a crucial ingredient in the process, which also depends on home valuation algorithms and networks of renovation contractors.
It uses senior debt to pay for 80% to 90% of a given home, and mezzanine debt for the balance, according to an August filing. The company’s new $3 billion mezzanine facility gives it room to acquire more than 40,000 homes, based on an average home price of $350,000. The company would need more senior debt to reach that figure.
Read more: Opendoor Seeks $2 Billion Credit Facility to Boost Homebuying
Opendoor’s main competitor, Zillow Group Inc., has also tapped Wall Street for debt, seeking more than $1 billion in two unrated bond offerings.
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