We understand that by disrupting the existing real estate investment market and creating a whole new class of real estate investors, we have a responsibility to those clients. Especially to first-time investors that may not be aware of the risks involved in any investment. To this extent, we, at Bricksave, have always looked to offer the lowest risk profiles possible, on any investment projects, and have placed an emphasis on security as well as returns.
As a result, unless there is a compelling opportunity, we always follow four golden rules when assessing investment opportunities:
Whilst real estate developments will often offer higher returns than finished products they also come with significant risks that inexperienced real estate developers are often not aware of. In order to reduce the risk exposure to our crowdfunders we therefore look to source finished properties so that returns can be generated instantly and as much risk as possible is removed for the investor.
Whilst it can be wiser in real estate terms, when it is possible, to get leverage and mortgage a property, at Bricksave we take a different approach. Considering the nature of Crowdfunding and the profile of our clients, we realize that whilst mortgaging our properties could, in some cases, increase the yields it also can increase the risk. We believe that once our crowdfunders have invested into a property they should not be any need for them to put in additional capital and the best way to do this is to not leverage the properties. For example, if mortgage rates change then it is possible that crowdfunders would need to put in additional capital. By not leveraging our investment projects we are removing the risk of increased mortgage rates and the need for crowdfunders to put in additional capital after their first investments.
One of the key elements to our projects is that we do not finance our own properties as we feel that this would create significant conflicts of interest. Equally important however is that we always run our own due diligence on the properties and do not just trust other companies or agents to do this.
For this reason, both the properties and our suppliers must pass our audit process, this way we ensure that our customers receive the best quality / price ratio and the security required in this type of investment.
April 21, 2020
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