Briqchain (Briqs): A new approach to investing
There are lots of companies doing 'something with blockchain' that want to make use of this technology in one way or another. A clear example of that is Briqchain. You can buy and sell so-called 'Briqs' with the aid of a blockchain. Previously, the real estate trading sector, in particular real estate funds, was not open to everyone. To the typical investor a high minimum investment always shuts the door for them. That barrier is eliminated by Briqs.
Flexible real estate investing with Briqchain
The team behind Briqchain came up with an idea, more than two years ago, to look at the possibilities of making investing more accessible. And let's be honest: It has never been easier to invest in real estate. A tenner can get you started. A fixed interest rate is negotiated before you invest. And you know in advance what, when and how much you're going to get. The money you put into Briqs, for example, is being invested in rental property.
Briqs are bonds which are registered on a blockchain. You need network connectivity and you get in return transparency, simplicity and 24/7 care. The company concentrates on houses, and everyone can see what they can invest in.
The first round of sales will commence in October. As with many crowdsales, if you get there early, you'll get extra value for money. You can find on the Briqchain web site an indication of the possible returns from your investment. There's nothing guaranteed, but you can get a good idea of whether these types of investments are something for you.
We asked Jos van Alphen a few questions to explain the concept behind Briqchain even better. Van Alphen is responsible for the project's marketing and communication among other things:
What was the reason to get Briqchain started?
The reason for this was the fact that for years, the real estate market was dominated by large parties who had incredibly high entry fees. For 15,000 euros you might get access into a fund, and we simply didn't have this money. Additionally, we discovered many hidden costs that were input into the funds themselves. Fund managers get more in return each year than we'd ever get, which we thought was quite odd - promised high percentages but rarely achieved. Furthermore, the creditors had no right to anything in case a fund collapsed. The market has in fact always stood still, never adjusted to the needs of our times. When Briqchain's idea was born we thought it could and should be done differently. A transparent fund accessible to all, good monthly interest and security through the registration of a mortgage. Also in the Netherlands, Briqchain is one of the few funds that organized all processes online through a personal dashboard environment.
What is your real estate industry background?
Tom Verdel is in charge of locating the houses. Tom has worked in this field for 15 years and now understands the industry like no other. I (Jos) am in charge of promoting our goods and services and my focus is on enhancing investor processes and online experiences. Daan Ellens is our Operation & Finance guy, someone who can see what can be done at a glance and who can maintain peace of mind. Also important: He's a financial superhero. It seems as though there are three of us heading Briqchain, that's just on paper, since we've gathered an incredible team around us from IT to Finance to Legal. We have worked for over a year with a total of 15 staff. It sounds easy to start your own fund but you really need good people.
What blockchain will one find on the Briqs?
Earlier in the thought process came the decision for us to work with blockchain technology. We didn't want to use it just because it was a phenomenon. The choice was a little more pragmatic: it turned out that blockchain was much cheaper, both in time and money. We want to pay interest to our investors every month, and keep the entry amounts small as well. A bank transfer costs absolutely too much money to get the project funding. The solution for that was given by blockchain. In the end we opted for the Ethereum chain. When looking at smart contracts, peer-to-peer transfers, etc., Ethereum gives various freedoms. We think there will be a variety of bigger and better ones amid the hysteria of new blockchains, just as it happened after the internet bubble. Throughout my early research I was using AltaVista for my online searches. Today it's Google and it is used by everyone.
What do you think of the competition?
We are constantly aware of other real estate projects that are just like us trying to 'disrupt' the market. We welcome that very much, and endorse every project as long as they obey the rules. I am not sure, though, of any project that has linked bonds with real estate like us. Most prefer a structure to make each person part-owner of an immovable property. That feels good, in reality it means there is no escape. Because who is going to buy your property within 5, 10, 15 years? We focus on adding value, but when you just have 0.01 percent of the property on sale, I think selling is tricky. Furthermore, the real estate may have risen in value (fictitiously), but the rental income is not rising as quickly and is thus yielding poorly. My grandfather used to buy a share of a dividend, now everyone buys a share for a possible increase in value and they hardly look anymore to see whether it will yield anything in the meantime.
Which are the risks?
The (real estate) bonds do have risks, just like any property. Suppose the economy shifts entirely you can't sell the property because there's no competition? The creditors are then asked to extend the term of the bond by 2 years. So what if no one is paying rent? In that case, despite having a buffer for this, we can not afford to pay the interest in the longer term. Then we will have to postpone the interest payments before there is rental income again. I never consider it a hassle to call the risks, it's the way it is and everybody has to understand the risks well.
Within 5 years the Briqs will be bought back, how does that work exactly? And isn't that a lot of money in 5 years?
Briqs have a 5-year term, they will be repaid by us after 5 years. We will do so through the sale and refinancing of the underlying real estate in a new issue of Briqs. Every year we start a new fund and part of that cycle is part of partial refinancing. The downside of this is that the collateral will continue to grow and this way, we can give a higher return.
Anything else would you like to tell our readers?
The Briqchain fund is now on a private live launch. Although we don't have an ICO, we think it's really important to additionally reward our first supporters. We are also charging an additional year of interest on the first investments in October, so their input is very valuable for us. You can register through www.briqchain.com/sign-up, in which you will receive a personal invitation to be one of the first to access the short-term use of the app.
We'll also launch a short-term social contest where you can win extra Briqs by sharing Briqchain material with your family, friends and relationships.
So register quickly.
BriqChain main features and highlights
- Real Estate Investing
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