Why Home Depot Loves Real Estate Investors

by 26 Feb 2013

One of my clients, who has flipped over 400 homes, never has to think about what carpet or paint to put into his rehab houses. His contractor has the SKU numbers conveniently filed at Home Depot for easy ordering, pickup, and payment. Using one home improvement supplier like Home Depot has helped this real estate investor to quickly and efficiently flip many rehab houses over the years.

Real estate investors have certainly fueled Home Depot’s profits, and it’s no wonder that the Home Depot just “pulled up the Dow,” as reported today by the Wall Street Journal. Home improvement has been on the rise over the last 18 months as real estate rehabbers furiously work to fix up and resell all of their REO purchases. And don’t forget about all of the first time homebuyers that are eagerly spending on their biggest purchases ever.

Because banks aren’t throwing money at investment properties these days, real estate investors have been scrambling for financing to fix up these properties. Real estate lenders, including hard money and private money lenders have played a huge role in this home improvement frenzy.

Real estate flippers have taken advantage of private money rehab loans which will cover up to one hundred percent of the purchase price of an REO. The real estate investor is then responsible for the cost of the repairs to the property. With the availability of Home Depot financing, the cost of the materials can be deferred for payment until after a property sells, allowing many real estate investors to bring very little cash down on a REO flip. It’s no wonder Home Depot’s profits are up and it has the rising real estate market to thank.



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