In this Brickowner review, we will provide an overview of the platforms mission and objectives along with the pro’s and cons from a real users perspective.
I have been investing in Brickowner for more than 5 years now, so know a thing or two about the process from beginning to end.
Read on for my full review of Brickowner.
About Brickowner
Brickowner was originally formed in 2015 from a need to make property investment much less clunky and more inclusive for retail investors.
Fred Bristol and Tobias Stone, the founders of Brickowner, come from a property asset management and investment background.
They learned first-hand that the administrative and legal processes for onboarding individual investors was too lengthy and far too complex for property managers and developers to accept.
This meant developers were missing out on great sources of funding, whilst retail investors were being locked out of potential opportunities to invest in high yielding products.
“Our goal is to help property asset managers and developers onboard and manage their investors, whilst giving individuals access to UK property investment opportunities.” Frederick Bristol, Co-Founder and CEO
Brickowners Technology
A key USP is Brickowner’s technology that cuts the time to onboard and invest in property from many weeks to just a few minutes. They provide access to historically inaccessible investment opportunities by opening up investment to experienced and high-net-worth investors.
Since Brickowner’s official launch in 2017, investments have been funded with a GDV in excess of £55m. Over £17.5 million has been raised through the platform for property projects across the UK.
How Brickowner Property Development Works
The due diligence process is essential for everyone's success.
At the selection stage, they carry out detailed research on the previous track record of the property developers and asset managers behind the projects.
Brickowners investment committee conducts a 360 due diligence analysis into the property assets, including the local market, security, diversification potential realistic projected returns.
They focus on establishing commercial viability, identify key risks, and are not afraid to turn projects down if they don't meet funding requirements .
For projects that do pass the due diligence stage, Brickowner will put legal and security agreements in place that are in line with the proposed opportunity, to help protect the investment, whilst aiming to provide a balanced return.
The Brickowner Platform
Brickowner have designed their platform to make the timely, expensive but necessary processes required for property investment as straightforward as possible.
They aim to deliver a transparent and user-friendly investment experience, whereby self-certified investors can set up an account in minutes.
Once registered, you can view the investment opportunities, sign relevant legal investment documentation, invest in and track your portfolio.
Brickowner also aim to keep investors informed through updates and milestones on the dashboard and investors can utilise the secondary market.
See example summary update of one of my own investments below.
Who Can Invest In Brickowner
Due to the risks inherent in property investments, these investments are only available to what’s called ‘qualified’ investors, who meet set criteria.
Therefore, investors will need to self-certify as either high net worth, a sophisticated investor, or a company investor before using the platform.
The Brickowner Model Summary
Investors get the opportunity to build their own property portfolio of developments.
This allows small retail investors to invest in high-return property deals (usually only offered to larger organisations.
You buy shares in a property SPV for a minimum retail investment of just £500.
Brickowner only collaborates with credible UK property asset developers.
The projected returns start from approx. 8% and rise to around 20% per annum or 30-40% per project. The investment term can be from 1 year up to 5 years.
Only qualified investors can invest in Brickowners developments.
There is now a secondary market to provide liquidity for those seeking to exit investments early. This was added in 2021.
Brickowner Fees
Fees are variable and are outlined within the property term sheet for each specific investment. However, Brickowner typically charges three fees:
An administration fee on investment into a given project, typically this is between 3-5%.
An ongoing management fee of 1%
An exit fee specific to the property investment.
Brickowner Pro's
You can invest as little as £500 and partake in some multi million £ deals.
There’s no exit fee to pay when the investment term ends.
The new platform is slick and easy to use
Plenty of properties coming to market to choose from
Good monthly update summaries on properties invested in with forecasts
There is now a secondary market for early exist if required
Brickowner Cons
The main negative (lack a liquidity) has now been resolved with the secondary market opening in late 2021.
Property developments can run over time and over budget, so you may not get your money back when you expect to, and you may not get back the original projected margin if costs rise.
Brickowner Review Summary
There are a number of Brickowner reviews currently available on the web, and by far the majority of them appear to provide a thumbs up for Brickowner.
As a long term user and investor on the Brickowner platform, I am also happy to report a positive and profitable outcome for my investments over the years.
I have used a number of other property crowdfunding platforms, but none provide the level of information and detail that comes with Brickowner, I especially like the monthly update summary I get for each of my investments which sets out the latest build position (both positive & negative) and the financial projections.
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Is Your Investment Protected If Brickowner Falls Into Financial Difficulty?
Brickowner mitigates any impact that may cause financial difficulties with your investments if they ceased trading in the following ways:
1. Each property investment is made through a dedicated share class or specific LLP fund. The Brickowner property investment platform restricts its ability to incur liabilities. Costs of each property investment are attributed only to that share class or specific LLP fund.
2. Costs that are not directly related to a specific property investment are the responsibility of other companies in the Brickowner group. Investors in Brickowner Investments Limited or LLP funds managed by Brickowner IM Ltd should not be affected by these companies.
3. All money which is not invested is held in a Mangopay e-money wallet. These funds are completely separate and ring-fenced from any funds of Brickowner.
As such they would not be affected by anything that might happen to Brickowner IM Ltd it’s managed LLPs or Brickowner Investments Ltd.
The money would simply be returned to investors if Brickowner fell into financial difficulty.
2024 Update of Failed Brickowner investment
Dear Brickowner Investor
We are writing to you as investors in our Regent House development project.
Firstly, we'd like to acknowledge the huge frustration that this project will have caused through severe programme delays and the extremely disappointing financial performance.
By way of reminder, the scheme comprises 31 residential units and 3 commercial units. To date, 26 residential units and all 3 commercial units have been sold. All sales proceeds have been applied to the repayment of the senior loan.
We have now agreed a sale of the remaining six units to a single buyer which will see the scheme fully sold. Whilst this is positive in that the scheme is fully sold, unfortunately, all sales proceeds will be applied to the repayment of the balance of the senior debt, and part repaying the junior debt.
As above, the junior lender will only be part repaid from the final sales and as such will crystallise a loss on this loan. Regrettably, this means that you, as the equity investors, will suffer a 100% loss of capital on completion of the final sales.
We appreciate that this is a very frustrating outcome for the investment.
As per previous updates, this project has been blighted by delays and cost overruns from the outset. These problems have been exacerbated by a sharp fall in values in this area. To put this into context, the senior finance costs were originally projected to be £0.323m. As it stands, the total senior debt interest and fee cost is c. £0.850m.
In terms of values, the original GDV projection was £5.788m - on completion of the final sales, the achieved sales value will be £4.772m.
After the sale of the last flats, there is still the freehold which is owned by the Company - this will be sold but we do not expect to be able to sell this for more than c. £10,000 - any proceeds from this sale will be applied to the repayment of the junior debt.
We appreciate this is hugely disappointing for everyone and will confirm when the sale of the last six units has completed.
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