I haven’t written anything about my real estate crowdfunding portfolio since July. Enough changes happened in between, so I’m ready to provide new updates.
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Brickowner is a relatively new property crowd-investing platform in the UK. With just 100 GBP, it lets you own a portion of property investment in the UK.
The interesting thing about Brickowner is that they invest in institutional-grade real estate projects small investors wouldn’t have access to under normal conditions. They act as an aggregator of investors funds, and with these funds, it invests in parts of large property development projects.
The investments are structured either as bonds or as equity shares, depending on the property.
The projected returns on the investments start from around 8% and go up to 20% per year. Typical investment periods range from 1 to 5 years. So far, they managed to fund investments worth around 12 million EUR.
I’ve invested so far in 4 development projects in London and Liverpool. One of them exited earlier than expected, and also with a bit lower returns.
I receive my payments on the other loans only once a year, so there weren’t too many changes in 2019 on this platform.
Anyone in the world (except US residents) can sign up on Brickowner. At the time you actually want to do an investment, they’ll ask you for a proof of identity (passport or ID card copy).
You’ll need to fund your account either by bank transfer or debit card. Credit cards, like the cards from Revolut, don’t work.
Brickowner is not authorized by the Financial Conduct Authority (FCA) from the UK, but it runs under Sharein Limited‘s FCA license.
Invested funds are kept separate from Brickowner in a UK limited company (Special Purpose Vehicle), that’s created for each individual investment. This means that if Brickowner goes bankrupt, your investment will be managed by a different entity and your investments won’t be tied to Brickowner.
Until they’re invested, investor funds are kept in a separate online wallet by MangoPay, an electronic money institution from Luxembourg.
So, the main risk is the actual investment you make in the real estate project. In the investment documents, each property is ranked at a risk level from 1 to 7, based on how illiquid your investment is and how much your capital might be affected by market fluctuations.
Brickowner says it charges investors different fees on each listed property. The first property I’ve invested in had a 3.5% funding fee and a 0.75% yearly management fee. The other properties didn’t have any fee listed and I didn’t pay any fee on them.
There’s no fee applied when you exit your investment.
Brickowner makes money by charging property developers a 0.75% fee per year, plus a 2-5% fee when the project is funded. Maybe they decided that also charging investors a fee might prevent them from joining and investing on the platform.
You can only exit your investment at the end of the investment term. There’s no secondary market or the option to sell your shares to Brickowner.
There’s no secondary market or auto-invest tool, so in this matter, the platform is rather simple. You can view the current and previously funded investments, pick the ones you’re interested in, and dive deeper.
Each investment has details about how the funds are going to be used, what’s the expected return, how the investment is going to be structured and full details about the property.
The user dashboard feels a bit lacking, showing just the invested amount, available funds and current investments. No statistics, no payment schedules, no notifications.
Brickowner feels like a great platform to invest in. Their funding targets on each property range between 500.000 GBP and 2 million GBP and some of the properties available look very interesting.
There are currently over 2000 investors on the platform. However, the projects get funded very slowly. While they managed to fund investments worth 10 million GBP until April 2019, since then they went through a slow down and only managed to fund another 2 million worth of investments. Of course, one big reason for this is the property market deeply affected by the current Brexit situation.
For now, I’ll continue to be invested with them. The Brickowner team just did some new design updates on the website, and they recently ran a crowdfunding campaign on Seedrs. As the platform grows, things will start happening faster.