Oaktree backs lender to house-flippers

Among those helping to finance the latest wave of house-flippers is Oaktree Capital (OAK -1.1%) which spotted opportunity as traditional lenders exited the business.

The P-E firm invested $100M in Genesis Capital in January to make loans to flippers, and Genesis has since opened a $125M credit line with Wells Fargo (so the banks are back in, but one step removed!). An auction house and lender, Genesis provides loans for up to 90% of purchase costs and 80% of renovation expenses. It auctioned 4.5K homes over the last 18 months and has a registry of over 5K qualified bidders - providing a steady source of potential borrowers.

“There are very, very few banks that provide this kind of financing and provide it in a way that would work with our business model,” says flipper Greg Hebner.

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