Following the demise of Zillow Offers in November, Offerpad sought more than $600 million in credit from an unnamed lender in December, according to an SEC filing reviewed by Inman.
Months after Zillow’s highly publicized exit from iBuying in November, Offerpad is seeking several lines of credit as it looks to expand its homebuying prowess.
According to the filing, Offerpad received $500 million in a revolving credit facility from the lender, which gives them the choice to borrow money repeatedly while repaying a portion of their current balance due in regular payments. It also took out $112.5 million in a mezzanine secured credit facility, of which it has committed to spend $67.5 million, the filing shows.
In a statement shared with Inman, a spokesperson for Offerpad said they saw the borrowing as a tool to increase their iBuying prowess heading into the new year as they plan on expanding into new markets.
“The new facilities are revolving and we borrow only what we use to add inventory, where we continue to apply our disciplined approach to underwriting homes,” said the spokesperson, David Stephan. “In fact, these credit facilities expand our borrowing capacity, lower our overall borrowing costs, and further expand and diversify our lender relationships.”
After going public last fall with a $2.7 billion valuation, Offerpad increased its revenue by 190 percent to $540.3 million in the third quarter of 2021, while increasing its gross profit 169 percent to $53.1 million, selling a record of 1,673 homes and reporting a net loss of $15.3 million.
Following Zillow’s pullout from the iBuying sphere, Offerpad CEO and founder Brian Bair has worked to assure shareholders of their solid footing.
After expanding into Midwest markets over the fall, the iBuyer plans on putting down stakes in three additional California markets this year, with a goal of entering approximately 15 new markets in 2021 and 2022 combined, according to Stephan.
“In 2021 and 2022 combined, we expect to enter approximately 15 new markets,” he said. “Our future expectations include continued growth through increasing our number of markets, increasing penetration in existing markets, and expanding our ancillary service offerings.”