BrickX offers $126 entry into Mosman market for high net worth property investors

Currently available for high net worth investors, the Brick Exchange Pty Ltd (BrickX) is a newly established trading platform that offers investors easy access to an array of residential properties.

There is a minor required minimum investment, with the purchase of ‘Bricks’ sometimes starting from as little as $66. 

So far the trust has two properties including an apartment in Mosman, Sydney, where BrickX is brokering equity for as little as $126.

It bought the two bedroom 18/5 Parriwi Road, Mosman NSW for (pictured above and below) for $1.2 million with it recently available with an asking rent at $995 a week, but reduced to let at $950 a week.

Investors can also buy into their Enmore apartment at $66 per investment. The one bedroom 1/159 Enmore Road apartment cost $620,000 and was initially available for rent at $590 a week, adjusted to $575 a week.

CoreLogic RP Data put the Mosman apartment median currently at $800,000 and at $604,500 in Enmore.

After being ascribed a $1.26 million asset value, BrickX has suggested the Mosman fundamentals were: 

After being ascribed a $660,000 asset value, BrickX has suggested the Enmore fundamentals were: 

Around 120 Bricks have been sold for the Enmore property with 9879 remaining and 158 for the Mosman opportunity with 9,842 remaining.

BrickX is actively scouting the inner bayside suburbs of Melbourne, but yet to find its first there. The aim is to acquire around 20 residential properties over the next year. 

BrickX takes a flat 2% brokerage fee on each purchase of bricks.

The platform allows a customised online portfolio with individual digital wallet accounts providing monthly income distributions - all without the investor troubled by the time and worry of property management. 

Bricks are initially offered at acquisition price, plus stamp duty along with legal fees and advisory.

Each Brick attracts a monthly dividend yield from the rental of the property that is calculated after rent, less strata levies, water rates, council rates, maintenance, management fees, debt interest and principal repayments.

Once issued and sold out the price of Bricks will be based on investor demand and sentiment. 

The buying and selling of Bricks will be facilitated through The BrickX Platform with the liquidity or otherwise driven by the number of investors and how long they each intend to hold onto their Bricks. 

Once a year it will conduct an annual general meeting for every BrickX Trust, and allowing owners to visually inspect the property. 

Markus Kahlbetzer is the co-founder of BrickX with Darren Patterson, having devised what they envisage as an easy route into investing in residential property across Australia.

Darren Patterson said they are helping to make purchasing property more accessible by facilitating liquidity and "seeking to bring transparency to what has been a convoluted and expensive process for far too long.”

It presents an exposure to Australia’s residential market rather than through traditional investing in major banks or through residential mortgage-backed securities and real estate investment trusts (REITs), which have mostly catered for commercial, retail and industrial investors. 

While it has launched licensed to attract only the wholesale investor, the  ambition is to make BrickX property investing available to everyone possibly within a year or two.

On the debt front, BrickX intends treading lightly, with low or no gearing.

Each BrickX Trust has 10,000 Brickx for investors to buy and to ensure there is no major holder of Bricks, and to facilitate liquidity in Bricks, the maximum number of Bricks an investor may hold in any BrickX Trust is 5%, or 500 Bricks.

"We are focusing on wholesale investors with assets worth $2.5 million and/or who are earning $250,000 or more and have done so for two consecutive years," Darren Patterson said.

"We can also help self-managed super fund investors who meet the wholesale requirements."

BrickX is a wholly owned subsidiary of the BridgeLane Group, a private equity investment company. 

BrickX says its was carefully selecting properties based on a number of key strengths, which include: 

• Studio, one and two bedroom apartments
• Healthy strata budgets
• Blocks without features that typically increase the cost (such as pools)
• Sound structural health (i.e. no water issues, concrete cancer etc.)
• Floor area greater than 46 square metres
• Modern internal fit-out
• New or recently renovated or remodelled and requiring little additional maintenance or investment.