I’m thinking about buying my first Bricklet, does anyone have one or has anyone heard good/bad reviews about them?
I like that guy can or can’t get involved and you can own a small portion of property around Australia.
Purchasing My First Bricklet
bobwokeup on 12/10/2021 - 13:12
Last edited 12/10/2021 - 13:13
Last edited 12/10/2021 - 13:13
Related Stores
Comments
"Backed by….NewsCorp…".
They have a scarily low amount of information available about how it functions and the specifics, considering they want you to fork over $20,000+ this is a big red flag.
There's so many "what if" questions that come to mind, that you can't find the answer to on their basic website which is just a brochure.
What if bricklet goes belly up, do you actually own any of the property or is it just an agreement with them, and they own it? in effect you'd lose your money.
If you want to sell your bricklet, a buyer needs to buy it. So it's in essence another market for real estate, if there's no buyers for bricklets then how does that work for your valuation? What if everyone else sells their bricklet except you and it starts to lose money?
It seems like they're sticking 40 people on each property title. So it's technically above board, but imagine the reality of dealing with 39 other owners.
So say $25k buys you a 1/40 share in a $1M unit. Say it rents at $1k/week (seems unlikely, but ok). Assuming no fees, that's $1300/year, or just over 5%. Nothing particularly special. Oh, and they take 6% of your purchase, so you're negative in the first year already.
So you can go for capital growth, but they're all units in towers that typically won't gain value as fast as houses. Lets pretend that it goes up $10k/year - that's $250/year for your share, which is negligible. Even double or triple that is chump change for your $25k high risk input.
Say you hold onto it for a few years - it's a rental, so at some point it's going to need repairs or be renovated. Who pays for that? Where does that money come from? What happens when one of the 39 other owners doesn't want to fork out?
Then you have to sell it to get out. You're assuming that someone wants to buy 1/40th of a property in the first place. Then, you're assuming that Bricklet still exists at that time. If they pull up stumps, good luck selling your 1/40th share on the open market.
And it's associated with Newscorp. Nothing good comes from that.
Add in the risk they will overpay for the $1m unit, which anybody else might buy for, say $800k, because they will get paid more if they get 6% of the inflated figure so have nothing to gain by haggling.
A perverse incentive.Also I forgot rates and body corp fees (and probably sinking fund too) - you're an actual owner, so you're on the hook for that too.
THIS was my initial thought - Mirvac builds it, then "sells" it at a premium to it's subsidiary "Bricklet".
I don't understand how it exactly works by directly reading their website.
Doesn't seem like a finished product?
I personally view housing as liabilities and I am vary of any re-packaged abstract financial instruments / securities especially with housing that supposedly always appreciates in value - like what happened with subprime packaging leading to GFC.
My opinion is that housing is overly appreciated and it is not sustainable but I belong to a minority with this mindset.
People think you can blend the risk and create abstractions but it will just feed into systemic risk.
Also as others mentioned there isn't much information to dig in..
It seems pretty dumbed down and seemingly (?) aimed to dumb lazy money retail investors with the seemingly associated dumbing down and hard sales that may follow (?)
This is where I would expect to see way more details / legal documentation / T&Cs than I can briefly see from their website?
If one has to connect and talk to someone before getting the basics that just suggests to me that one would face the hard sell aimed for targeting the less sophisticated investors who are used to read prospectuses, financial statements etc.
https://www.afr.com/property/crazy-about-property-the-danger…
Enron was infamous of telling people how supposedly they had some trading secret sauce and they never released their balance sheets (just look at the CEO reaction and what the hubris did with it) whilst being enabled by bankers, analysts, lawyers and accountants everyone assuming everyone else was doing their jobs including Arthur Andersen with their audits.
"don't kill the golden goose" was the saying.. resulting to Sarbanes-Oxley.. if interested Enron: The Smartest Guys In a Room is a good doco.
This is not to say it's going to be the next Enron or GFC event but I personally dislike abstract investment vehicles and especially any seemingly dumbed down ones peppered with a lot of hype terms and short termism.
Lakeba 1* reviews can tell something but they can be just disgruntled employees venting out - I never read the 5* ones.
You would be surprised how many during due diligence read the glassdoor reviews.
I would also do a bit due diligence on the management and board which seems to be absent on the website?
https://www.afr.com/street-talk/oliver-trajcevski-turns-up-a…
"Lakeba, which was founded in 2013, has created 15 different business, including AirCrypto, Deals4Sport and Paid By Coins, which it has already exited."
https://australianfintech.com.au/lakeba-achieves-20m-startup…
"“Lakeba built, deployed and exited the Paid By Coins business in less than seven months, achieving what few startups have before them. This accelerated acquisition"
In my personal opinion they seem to be attempting to be perceived as the ones who are "breaking things" and "going fast" but who bears the consequences of these seeming exit-to-acquired blitzgriegs?
I mean.. if you transfer 20k$ cash in under unknown conditions as a professional (?) investor, the investment vehicle business gets acquired by some private equity biz and loads it with debt .. what happens to your 20k$ cash? there and after?
ASIC is supposed to regulate some of this stuff - just look at the gargantuan size of Corporations Act and the inaction from ASIC.
Great comment.
If I wanted exposure to an investment unit and had $20k+ I would save a little more and buy one with a low deposit.
There are plenty of units for sale in Australia under $500k, and quite a few under $300k.
This just looks like a bad deal.
No leverage, limited capital growth, not even a tax deduction if you wanted to negative gear.It is tax deductible I checked with my accountant but you can’t even do a tax depreciation schedule on all the new belongings. The goal is to have any property positively geared anyway.
TBH, probably better investing a lot less $ in this and help support a wildlife area:
https://www.highlandtitles.com/?utm_term&utm_campaign=DSA%20…
Lmao this is an amazing idea for fleecing money off the ill advised.
Avoid.
they say only the super wealthy throw away their money on potential unicorn projects and start ups
well now, for the low price of 20k, now everyone can throw their money away at dubious investments
LOTS of scams going at the moment. From tradies to white collar. Economy and income in down. More peeps crossing the line to maintain their "quality of life". Important to be vigilant at the moment.
better off buying 20k of property ETF or shares
Thanks everyone for the well thought out replies much appreciated. Not one comment saying it could be a good option. I did create an account so I could see the properties and it was easy to do. However as most pointed out you shouldn’t have to sign up to see more information. It should be available on the main page. I can answer a lot of the questions as I’ve been asking them questions for a few weeks now but definitely sounds like now is not the time to invest until they are more transparent.
I'd look at BrickX instead if you're interested in the concept, been running for a fair few years and much higher liquidity
"Interesting" news article about Bricklet https://michaelwest.com.au/ocean-view-property-with-carpark-…
Is it like buying 1 brick in the Opal Towers?