New real estate investment startup BrickX is enabling investors to partly purchase properties by trading “Bricks” which start from $66 each.
CEO Darren Patterson said the platform aims to make buying and selling property more fluid by giving wholesale investors the ability to acquire or dispose of assets whenever they want – without having the expense of purchasing a property directly, dealing with long lag times or the costs associated with the transaction.
“With BrickX, you can buy ‘Bricks’, without ever leaving your home,” Patterson said.
Co-founded by Tank Stream Labs investor Markus Kahlbetzer, BrickX is part of the BridgeLane Group. He said the platform is designed to take some of the pain out of property investing.
“Investors should have full control of their investment decisions, online, by using data-driven and transparent property profile information on blue chip properties,” he said.
While investments will begin conservatively, Patterson said: “as we scale the platform we can test where the demand is and start to go into more high growth.”
The platform will launch with at least two properties – a one bedder in the inner city Sydney suburb of Enmore and a two bedder with harbour views in Mosman which Patterson described as “a more conservative yield play”.
“We are focussing on studios, one beds and two beds, that’s where we’re starting,” he said. “That’s where we think the demand is across the country.”
Patterson said he was also keen to invest in Melbourne and a number of other Sydney suburbs, including Manly and Bondi because he saw it as lower risk.
“We know what the returns have been like in those suburbs,” he said.
Owning property has long been the Australian dream but with property prices climbing on the back of supply shortages and low interest rates, it remains largely inaccessible to many.
While the first phase of the platform launch will be to people who qualify as wholesale investors under the Corporations Act, the aim is to extend the offering to regular mum and dad type investors.
“We recognise that the affordability of property investment is beyond the reach of a large number of Australians, hence we are helping to make purchasing property more accessible by facilitating liquidity and seeking to bring transparency to what has been a convoluted and expensive process for far too long,” Patterson said.
Buying property to launch a startup isn’t a cheap setup requirement but Patterson said “the most expensive element has been the legal costs”.
Although BrickX wouldn’t go into the details of how the platform works, Patterson said: “We’ve structured it so that each individual property is in a trust and investors can buy or sell into that trust.”
The property is managed by BrickX on behalf of the investor on the platform, and the investor receives a dividend from the rent of the property that they own, in proportion to the units that they own in the trust. As the price of the “Bricks” move, so do the investor’s returns.
There is no minimum investment required to purchase Bricks and there is a flat 2% transaction fee on purchases.