The new era of investment
Brickken is born from the idea that it is legal to issue securities tokens offerings (STO), and they are a new form of investment. If you are not familiar with what is an STO, we highly recommend you to read this post. Security token offerings enhances liquidity in markets by attracting new capital, as new investors can now entry markets by lowering the ticket of entry.
Our goal is to democratize investing and become a bridge between assets and investors. On the road, we will reduce the interaction of middlemen used to participating in security offerings or financing processes. Through Brickken, it is able to connect the asset owners with investors around the world through a platform running 24/7 for people to engage in.
No worries! We will explain it through an example everyone is familiar with; real estate. In this example, there is a house worth €1.000.000,00. This house becomes digitized through Brickken and then split up in smaller pieces, concretely, in 1000 pieces all worth €1.000,00 each. These small pieces are called tokens, which can be purchased by anyone around the world.
Now anybody can purchase one token worth of a €1.000,00, becoming token holders. When the house becomes rented by tenant who pays a monthly fee, this rent becomes distributed back proportionally. to the token holders. Thanks to tokenisation, the token holders are now generating a monthly revenue stream on their initial investment of €1.000,00
Furhtermore, token holders can sell their tokens to recover their investment, or buy from others to increase their stake.
Let us look at the image below.
As you can see above, the process that looked complicated can be broken down in 4 simple steps. Keep in mind that the house is just an example, as this can done to with any kind of asset, from paintings to vintage cars!
The old era of investment
We make the taunting statement that Brickken is the new era of investment. Before jumping in defining what we mean with this statement, let us look at the old era of investment. One of the most traditional way of investing are saving accounts. Put your savings at your bank and you get a guaranteed interest’s rate. Sounds good right? So why don’t we just do this?
Let’s look at the trend of the interest rate in Spain Interest rate from the last 20 years on saving accounts:
Where we used to get 3% to 5% interest rate on our savings, nowadays the interest rate has dropped down to almost 0%! So, it obvious to say we do not like this at all. We want a positive return on our savings, so we start looking for other low risk investment opportunities.
Therefore, using our example of real estate, we should analyze what has happen regarding the price per square meter in Spain, since 2017.
This looks a lot better right? Real estate has historically always been a great and relatively safe investment. So why don’t we all invest all our savings in real estate?
The reason, is quite simple, because it presents a bunch of barriers of entry:
- You need a big amount of starting capital.
- It is a complicated and time consuming process.
- Managing the property is a hassle.
- Bureaucracy just adds more pain to the process.
- Once you have the house, all your current and future savings will be dedicated to it.
High start capital
To buy a house we need to have a high starting capital to get started, maybe even have a mortgage to pay part of it. In Spain, even with a mortgage, we usually still need to invest from our own money around 30% of the value the house. As an example, if we want to buy a house of €200.000,00 we need to invest €60.000,00 of our hard-earned savings!
This is without considering real estate agency fee’s, taxes, or remodeling costs!
Complicated and time consuming
Purchasing a house take as a lot of time. We first need to find suitable houses, then we have to visit them. Once we have chosen a few possibilities, you hire quantity surveyors to understand the value of the houses. After this process is done, now you can talk to the bank to get a mortage, and be able to submit an offer to the owner. This is not the end, as we have to hope that our offer is accepted or else we go back to the beginning!
After having invested a big chunk of our savings in a house we like and our offer accepted, we are still missing something very important: tenants. We can only generate an income stream out of our investment if we have tenants paying rent. This can be a complicated and stressful business. We can imagine many situations suchs tenants not paying rent, or causing damages to our house. What about those cases where they only fulfill part of the contract term, leaving us having to look for tenants, and possible with some months without this steady income. We could go on and on about these stressful situations.
In order to buy a house and rent it out in some case you need permits, in others you “only” must worry about paying taxes, and community costs. Bureaucracy is another very time consuming and frustrating process.
Once we finally jumped through all the hoops and obstacles, we now must think about our cash possibilities. We bought a nice property in a good neighborhood and everyone is happy. However, after 5 years we decide we want to sell our house because we want to travel around the world, so we need money. We do not need the whole value of the house for our trip around the world, as we only need 20% of it. Well unfortunately for us, the trip around the world will have to wait, because it’s impossible to sell just 20% of our house.
We have limited options, and since we really want this trip around the world, we sell the entire house. Problem is, we have tenants living in the place who (for good reasons) have rights. We cannot just wake up one day and sell the house. We might have to wait months or years before the tenants decide to move out or find a buyer who is willing to buy the house with tenants, which just adds complications to our dream of travelling the world
Opening new markets to the world
Once we have explained what the old era of investment looks like, it is time for us to live up to our taunting statement: “Brickken – the new era of investment”.
Investing in real estate through Brickken is super simple. The first thing we need to do is go to the homepage, create an account and enter the dashboard. We must first add the funds we want to invest with, then we can analyze the investment opportunities offered in the dashboard. All the investment opportunities have valuable information supplied, such as where the asset is allocated, what is the revenue prediction, etc.
Once we have selected the investment opportunity we want, we can purchase tokens representing a part of the asset. We simply select the amount tokens and make the purchase order.
Let us jump 5 years ahead in time. Remember we wanted to travel around the world? For our world trip we only needed 20% of the value of our house. Now through Brickken, our home becomes digitized and tokenized, and after a few clicks, we can sell 20% of our house, and we can start packing our bags!
Just as simply as it is to purchase your tokens it is as simple to sell them. That is it! Really this is how easy it is to invest through Brickken.
Brickken takes care of everything else. No more need for high start capital, bureaucracy, real estate agency fee’s, property management and on top of all our investment is liquid!
Therefore, we can proudly say we can live up to our taunting statement that Brickken is the new era of investment!