Briqwise under the microscope
Financial journalist Hans Niewenhuis puts Briqwise under the microscope and discusses various topics that are discussed at Briqwise, with a critical eye based on his many years of experience in the financial markets.
What are the characteristics of an investment through Briqwise?
Briqwise can invest in secure real estate financing and receive a fixed, relatively high monthly interest payment for this.
Why does Briqwise exist?
It is increasingly difficult for SME entrepreneurs to turn to the bank for financing, and wealthy investors want to make a return. Via Briqwise, these parties can help each other.
What type of investors is Briqwise suitable for?
Investors who can put in $ 100,000 or more, who want more return than they get on a savings account or deposit, who want to receive a fixed interest rate, and who otherwise want to spend as little time as possible on their investment.
Three pillars: good return, low risk, no hassle
An investment through Briqwise therefore rests on three pillars: good return, low risk and little hassle, worry and involvement. This is an exciting combination, because return and risk in particular often work against each other: the more return, the more risk and, conversely, the less risk, the less return.
If you are afraid of any risk, you should not invest, it is that simple. But then there will be no return, because free money does not exist. In fact, money in the bank is also risky: the return is negative. We are suffering from inflation, tax pressure and extremely low interest rates, which are already negative at a number of banks. So for the feeling of security that a bank account offers, we have to make a loss on our capital.
Briqwise offers an interesting alternative: it keeps the risk as low as possible, but offers a relatively high return.
Return on investment
Via Briqwise an investor receives an interest of 7% per year. That is very high compared to the interest on savings or a mortgage. How is that possible? They are apples and pears and therefore cannot be compared well. Interest on money is very low because there is abundance, which is still being stimulated by the Central Bank. He wants money to be spent, not saved.
Investors through Briqwise, on the other hand, lend money that is needed: an entrepreneur who needs money to strengthen and grow his company. That is more risky, and therefore more interest is charged for it. The entrepreneur is willing to do this, because he thinks he can make more profit with his company.
Can such an investment still be called safe? After all, the investor is dependent on the entrepreneur and the value development of his real estate. That poses risks, doesn’t it? Like all investments, the results of which depend on the success of the underlying asset are risky, as is the case with equities or corporate bonds.
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Risk low due to collateral and entrepreneurs with “fat on the bones”
However, an investment through Briqwise is not that risky for the investor at all. There are a number of strong buffers between him and the ins and outs of the entrepreneur and the value of the real estate. The investor actually has nothing to do with the entrepreneur’s situation, and only in extreme situations with the value of his real estate. As long as the entrepreneur pays his monthly interest payment, there is nothing to worry about. Since Briqwise mainly finances entrepreneurs with fat on their bones, this is actually always the case. If he is unexpectedly unable to pay the interest and any repayment, Briqwise will take over these payments. In addition, the ultimate certainty is that when the business premises have to be sold by foreclosure, the investor always has the first right to a mortgage. The real estate therefore serves as collateral for the loan. To protect against depreciation, the loan is never more than 75% of the value of the property at the time the loan is taken out, usually less. Such a sharp drop in value is rare. (Only during the credit crisis from 2007, when the real estate bubble burst, the average difference between top and bottom in five years was 33%.) In the most extreme case, if the investor does not get all his investment back at foreclosure, the loss also diminishes. once again by the interest income received from the loan until foreclosure (6% per elapsed year).
Supply and demand come together through Briqwise
Via Briqwise, the demand from entrepreneurs and the supply from investors come together quickly and easily, without the intervention of a bank. Briqwise arranges the requested financing for entrepreneurs and is looking for money in the market for this. Briqwise itself is not a party in the transaction between entrepreneur and investor. The first right of mortgage is directly in the name of the investor. Should Briqwise for some reason fall away, the investor will simply receive his money.
As savings are loss-making, many savers are looking for more profitable alternatives. 7% interest per year appears to be a good balance between the supply of loans from investors and the demand for financing from entrepreneurs.
Briqwise prevents problems and hassle
Money should work for the investor, not the other way around! In the vast majority of cases, real estate financing runs smoothly and the investor does not have to worry about it. If the monthly interest payment (and repayment) does not work, Briqwise will take it over. If there is no more payment in sight, Briqwise will arrange the execution. Briqwise is also flexible: if an investor wants to get rid of his loan, Briqwise can look for a replacement.
How solid is Briqwise itself?
Briqwise also covers its own risks. It charges investors a 2% upfront fee and builds up an insurance fund through a 0.5% annual factor fee. This jar serves as a buffer and can accommodate incidents if necessary. The factor fee is encrypted in the entrepreneur’s interest. The more Briqwise’s portfolio grows, the larger the buffer. Briqwise now has almost 25 million euros in loans outstanding, which ensures sufficient solvency through the fees charged.
Transparency and carefulness, easily via the internet
Briqwise’s strengths are carefulness and transparency. Credit assessments are carried out very thoroughly, in a bank manner, which clearly limits payment arrears and defaults. Moreover, it is clear what Briqwise itself is left with from the transactions. Briqwise works via the internet, which reduces costs. There is no expensive canal house, for example. Simplicity is very pleasant for the investor and can significantly increase returns. This does not mean that Briqwise works impersonally: financing remains a human work and Briqwise is committed to working together in a good atmosphere with both its investors and its entrepreneurs. The team is fully committed to achieving the desired financing.
What about the spread?
Many investors are concerned about the diversification of real estate financing. Diversification makes an investment portfolio less volatile, while the return does not have to suffer. The classic spread between shares and bonds is well known. Real estate can also play a role in spreading. It is a matter of combining asset classes that respond differently to economic and political conditions, so that price movements have as little correlation as possible. Spreading also prevents the influence of a “rotten apple in the basket” from becoming too great. On the other hand, of course, the influence of a “stunner” is also limited. In general, the less safe the investment products, the greater the importance of diversification.
At Briqwise, spreading is not really an issue. The investor invests in one object. But because the risk is so low, that’s not such a problem. A saver does not have to worry about diversification (unless the deposit guarantee is exceeded, of course). The return at Briqwise is exactly predictable. There is no involvement in the value development of the underlying real estate because that is only a security, although an increase in value makes the investment safer of course.
By the way, the investors of Briqwise usually not only invest in Briqwise, but they also have a portfolio of stocks, bonds and real estate. Then Briqwise makes an excellent contribution to the spread of their investments!
Personality and situation of the investor
The profile of an investment product is not only objectively measurable. An important part is determined by the investor himself. How much risk does he want to bear, how confident does he want to be in his return? How much bond does he have with his investments? His personality and personal situation play an important role in this. In any case, Briqwise saves him a lot of time and energy. Most of Briqwise’s investors have been entrepreneurs themselves and enjoy helping other entrepreneurs. This gives an extra, personal dimension to their real estate investment.
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