Brick X on Lateline, own Property for $100

Discussion in 'Innovative Property Investment Techniques' started by Gonx, 1st May, 2017.

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  1. Gonx

    Gonx Well-Known Member

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    I just caught the end of ABC lateline segment on brick X (it is also on later this even again too). I did not get to see much of the program but it looked an interesting concept. I have no interest in it besides been curious to know more about it. Does anyone know about it? I will go read their website soon which is here: https://www.brickx.com/
     
  2. Gonx

    Gonx Well-Known Member

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  3. larrylarry

    larrylarry Well-Known Member

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    I don't think any PCer has bought into this.
     
  4. Bonz

    Bonz Well-Known Member

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    Nothing terrifically exciting from a perusal of the website. Not much different to having a company buy a property, paying the directors a handsome directors fee to manage the same, and the shareholders picking up the left overs in the form of a dividend at the end of the year.

    I guess if your into property you are buying a brick rather than a share, which is terrifically exciting. However I would be asking what the property managers can deliver that's better than any other listed property company. Are they managing better for a lesser fee, do I get my name on a title, can I charge or borrow against my brick, can I use it as collateral, can it be willed or gifted, what are the tax implications?
     
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  5. Gonx

    Gonx Well-Known Member

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    just a note, tune into ABC channel 20 Lateline repeat if you are interested as the documentary is about to start about BrickX
     
  6. Gonx

    Gonx Well-Known Member

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    yes some good questions. One benefit I could see is that you can become a shareholder (max 5%) in properties with high CG that you might not be able to afford normally like the one they have at Bondi etc.
     
  7. Bonz

    Bonz Well-Known Member

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    Agreed but you would want to be all over the risk involved. What is the ownership structure, who ultimately calls the shots on an issue, is there a sinking fund for maintenance, can the property raise loans to fund maintenance, redevelopment etc if they do who carries ultimate liability.

    Brick X maybe all over these issues like hair on a gorilla, but if they are it did not seem readily evident on their website.
     
  8. kierank

    kierank Well-Known Member

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    Sounds like one becomes a unit holder in a property unit trust.

    If the value of the property goes up, the price of one's unit goes up.

    And if the value of the property goes down, then the price of one's unit goes down.

    I didn't hear where Lateline disclosed how much the unit trust manager takes out of the buy/sell transaction nor the rental revenue.

    The CEO did state that there was a maximum of 5% of the units that any one unit holder could buy but the lady they interviewed said that one day she could see how the Bondi apartment could be hers. WTF

    From memory, each property is owned by a separate trust and each trust is comprised of 10,000 units. Unit prices range from $57 to $157.

    So I am guessing each property ranges from $500,000 to $1.5M
     
    Last edited: 1st May, 2017
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  9. Gonx

    Gonx Well-Known Member

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    most of those questions can be answered on their website. I had a little look earlier. I might consider investing $1,000 in one property if I find time to research the whole concept enough and I think it's worth it. Although maybe it's too late now since it could go viral after been n TV and many people hike up the brick cost over the coming weeks. I would love to hear from investors who have owned shares for 6 months or more and what their thoughts are and some numbers.
     
  10. kierank

    kierank Well-Known Member

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    I haven't studied the website but, if it is a unit trust, then the price of a unit should NOT increase due to demand. It should only go up when the property is valued, every 6 months I understand.

    I can't see how this is going to solve our so-called "housing affordability problem" as stated by the ABC or is a "game changer" as stated by the lady from REA.
     
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  11. Gonx

    Gonx Well-Known Member

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    I have no idea if it would be profitable and like you I have not studied it or can I be bothered at the moment besides a little 10 minute glance of the website. I have too many other more important things to do but it would be interesting to hear from anyone who has used it. I guess the reason for me starting the thread was to open up a discussion so we could determine how good or bad of an idea it is.
     
  12. zed_kid

    zed_kid Well-Known Member

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    Selling dreams to idiots is one of the tenets of capitalism.
     
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  13. abbyfresh

    abbyfresh Well-Known Member

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    This is more like managed fund investing.

    Best to compare it to a like commercial property trust shares.

    You have no control over you property which is worse than a bad body corporate situation.
     
  14. kierank

    kierank Well-Known Member

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    Yeah. One thing I noticed from the FAQ is that, if owners of 50% of the units vote to sell, then the property is sold.

    I can understand the logic but, if the property had CG, one wouldn't be happy if this happened in a high tax year.

    I spent a lot of time legally optimising (some might call it manipulating) my financial situation to minimise the amount of tax I have to pay each year. Any educated tax payer would be doing the same thing.

    This investment takes that control out of one's hands, not that I would be in their target market :) :).
     
  15. splatters

    splatters Well-Known Member

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    Exactly my thoughts - put a bit of cash is a couple of blue chip suburbs that I couldn't afford to buy in. I've bought a handful of bricks to see how they go while deciding my next property purchase. A few of the properties have gone crazy with all the publicity - bricks selling 25% above value which is madness.
     
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  16. Gonx

    Gonx Well-Known Member

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    that is what I thought might be the case in my earlier post
    it is OK to scoff at it but I have not seen anyone produce some numbers to back up their claims at how bad of an idea it is to invest in it. That is what the thread is for to discuss the benefit or pitfalls, all I have seen is people mocking it but no one has shown any real numbers or facts to backup the claims. I'm not saying it's a good or bad idea, I would just like to see something better than snobs mocking it without any facts.
     
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  17. splatters

    splatters Well-Known Member

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    it's quite similar to investing in shares really. there will be ups and downs, but hopefully the CG will mean it is a decent investment in the medium to long term. the distributions are tiny - as would be expected when sharing the net rental yield across 10,000 bricks. but these are all blue chip suburbs so it's a CG play.

    the website gives a very detailed breakdown of costs for each property.
     
  18. Gonx

    Gonx Well-Known Member

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    yeah that sounds about right Pat. The thing is no one is saying it replaces or compares to normal property investing (except maybe the women on tv) but just looking at it for what it is. I don't think it's ever wise to snub something without knowing about it properly and understanding the benefits and pitfalls so one can make an informed non emotional decision, not based on peer pressure or keeping up with the Jones family.

    I learned not to ever judge something until you know more about it. For example in 2008 just before I purchased my first properties a music classmate told me he was thinking about buying a home in Surry Hills for around 600k. I said you have to be kidding, that is just crazy. I decided he was crazy but I had no real facts or knowledge to back up my claims. I just hope he never listened to me.
     
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  19. Gockie

    Gockie Life is good ☺️ Premium Member

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    My thought is like it will be like tulip mania in Holland.... I wouldn't touch it.
     
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  20. The Y-man

    The Y-man Moderator Staff Member

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