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Guv Kang – CEO and Founder of BrickTrade – has 20 years of experience acquiring high-end properties in London and Hong Kong. He set up a company called Waterfronts, based in London’s Docklands, to manage the property from there to Chelsea, as well as opening an office in Hong Kong.
He is also experienced in housing finance and was aware of the difficulty for private developers and housing associations to obtain credit. With a keen interest in technology added to this mix, he was persuaded to try to streamline some of the bottlenecks of traditional construction by using modern technology, especially blockchain technology.
“Even buying a single property is a laborious process and can take up to six months. These bottlenecks and delays seemed so important in the last century, and reinventing real estate investing has become my passion.
Normally real estate investing requires large deposits and is only for the very wealthy – but with Bricktrade, Kang has reduced the minimum investment unit to €500, and the actual transaction can be completed in a minute.
“This is the first construction finance platform in the UK. It’s disruptive and it accepts fiat and cryptocurrency payments.
Kang has many plans, and the entry-level, fast-paced transaction process behind BrickTrade is just the beginning. It recognizes the difficulty for ordinary people to get into real estate investing, often the most lucrative and stable of investments, but by splitting ownership it takes people on a journey while capitalizing on the available crypto capital that seeks a good house, actually looking for asset backed investment.
“We put a lot of security at all levels of this process to assure investors that risks are minimized at all times. We are a very experienced team and have been working on this since 2018. 80% of the platform is now built and we are just waiting to complete the remaining 20% under FCA and UK regulatory advice and guidelines.
Another problem fueling the parallel global housing crisis is the reluctance of banks to offer the credit that developers need. Then there are people with savings or cryptos earning very little or no interest.
“I could see the potential connection, using blockchain as a transformative technology, and started BrickTrade using my own money.”
Kang streamlined the process; he and his team contact the developers. With their combined experience, they do a full developer vetting, from business status (must be a limited liability company) to planning (must already be in place) and review track record (successful constructions in the past). Together with the Accredited Developer, they then turn their attention to the current project. Professional cost consultants and QCs assess costs, attorneys corroborate all legal documents, must pass FCA approval and
when all is well, then BrickTrade and bring development to the platform.
Taking inspiration from other blockchain platforms, BrickTrade will have its own governance token that will allow token holders to quickly access offers.
“This will be important because from our research we see these deals being funded up to £1m in minutes. There is an appetite in the market for secure asset-backed investments.
Kang is building more than a funding platform; it builds a community. In addition to access to all training data, Kang plans to have live camera fees at each job site, with regular webinars and developer updates.
“Token holders can ask questions directly to the developer team.”
However, it doesn’t stop there. Kang and his team have extensive experience in selling properties, so once the project is funded, they move from fundraising to selling – again in fractional amounts and also giving the BrickTrade community the first dibs.
“So the developer comes to us for funding in phase one, but in phase two we are now helping them sell the units – while reducing the cost of funds and the cost of sales on both sides. co-owners can then decide if they want to sell the units once completed or if they want to rent them out.
This is phase three, bringing together all of Kang’s real estate experience – this time in property management.
“We can find the tenant, get all the required certificates, make sure the legal paperwork is in place as well as the insurance. We still do it for our other properties.
Investors have the opportunity to make money in each phase. The first phase would return a fixed return over a period of 18 months or similar. At the end of the investment period, principal and interest would be paid – but investors are encouraged to invest in the finished property, which can be sold or rented out. If sold they get a return on profits, if rented out then the full rent becomes a return (because there is no mortgage in place.)
While investing in real estate is considered a low risk, high return activity, it is also relatively illiquid in traditional investing. Thus, Kang has built-in exit points where the community can vote to sell the property during its life cycle. The sale may go back to the community first, so new investors will take over from the original, who may need to withdraw funds for different reasons.
“At this point BrickTrade will have a proven track record of raising money, building and then selling or letting a development. Using the blockchain, we record all the details down to the fact that unit 7 needed a new washing machine, and it cost €254 to replace.
“In fact, the beauty of this system is that a property could live in the ecosystem forever – a property that we helped build and then maintain. It’s now a known quantity.
The use of blockchain, smart contracts and tokens has been key in streamlining the process. Additionally, having a fully closed and proven development system, from finance to sale, will allow BrickTrade to obtain higher discounts from developers.
“If we had tried this ten or even five years ago, it would not have been possible. But now the timing is perfect with market demand for asset-backed investments.
In 2022, BrickTrade is planning an IDO and the token will be listed on the exchange. In addition to providing early access to projects, Kang creates many other rewards and features related to token ownership. Early investments from Logical Labs, Techstars and Alphabit also boosted their credibility. There are a few final points for the FCA to clear after which the payment gateways can be activated and two applications are nearing completion.
Note: The author is a long-time BrickTrade advocate and advisor
Also posted here.
Disclaimer: Nothing in this article constitutes professional investment advice. Please do your own thorough research before making any investment decisions.