When you think of investing in real estate, there are several more or less simple and affordable options that come to mind. The most classic is the purchase of real estate directly, in old or new, in order to take advantage of tax rebates (Pinel in particular). Those who want to avoid all the restrictions associated with finding real estate and managing its rentals can turn to platforms that offer support for all formalities for turnkey real investments. Another solution is to bet on SKPI, which most often invest in non-residential premises (offices, shops, logistics warehouses). Crowdfunding is the third completely dematerialized form of extracting interest by providing funds to real estate promoters or dealers through specialized platforms.
brick by brick
Now there is a fourth one that borrows elements from the other three. Startup Bricks.co selects investment properties with high rental potential to offer for investment on an online platform in the form of shares of 10 euros, called “bricks”. Depending on the number of bricks purchased, investors are entitled to a portion of the rent received from renting out the building. This rental income is returned to them every month in the form of royalties directly into their Bricks portfolio. For each building to be financed, the purchase price consists of a part financed by a bank loan and another part divided into bricks (shares of 10 euros). So with his bricks, the investor benefits from the leveraged effect of debt.
While gathering, you can invest in buildings of your choice by purchasing one or more bricks. At any time, of course, you have the option to transfer money from your Bricks wallet to your bank account. The big advantage of this offer is that you can resell your bricks at any time on the marketplace, which ensures perfect liquidity. Bricks.co guarantees that the resale of shares takes only a few minutes. Reselling bricks also allows investors to take advantage of any increase in property value by generating capital gains from the property. To this end, the value of each building is reassessed every 6 months by a sworn independent expert to reflect market reality as accurately as possible.
Bricks.co remains the owner of the platform-funded assets and is therefore responsible for all tax and administrative procedures, building maintenance, tenant management or rent collection. Thus, investors are only the owners of the right to receive rental income, but this is what allows them to resell their bricks so easily. The investment is subject to the same tax as real estate crowdfunding (30% flat tax), which is a big advantage as you are only taxed at 30% on both rental income and capital gains. If you are in the low-tax category, you can even opt for massive taxation.
Gross profit that can exceed 10%
In terms of performance, the average return seen on the platform is around 10% before taxes and can even go up to 15%. According to Cedric O’Neill, founder of Bricks.co, this very high rate is made up of approximately 4% rent, 4.5% leverage associated with debt, and a few additional points associated with real estate price repricing. Repricing can be very quick because Bricks.co often manages to purchase items below their market value.
Cedric O’Neill cites, in particular, this large townhouse next to Lyon’s Part-Dieu station, which was paid for around 4,000 euros per m², about 20% lower than prices in Lyon, and was immediately rented to a coliving actor with 10 year commercial lease. Thus, the investors who took part in this operation saw the value of their bricks rise in record time.
In just 10 months of existence, Bricks.co has already funded around twenty buildings in France and boasts a community of over 100,000 investors. Cedric O’Neill explains that he is now targeting properties between 1 and 5 million euros, still in the residential segment, but also in commercial buildings or offices. In this price range, which is usually too high for individuals and not enough for property management companies like SCPI, this allows for less competitive opportunities. At the next stage, it is planned to open investments at the international level, in particular, in Portugal.