Initial BRICK Offering (IBO)

Originally posted by ChippyDude ↑

For property Development Investment Sourcing of Capital to do Building Developments

Ive been mapping out a new Investment product Idea, so this is all my ideas so far,...

Initial Brick offering, for eg) A new Block of Units to be Built, so for this example, lets say $1 Million is required to be raised to build these Units. Total cost of Land and Units to build = $1 Million, as an example.

The Assumed profit for the Investors is 20%, so aiming for 20%, with a Project timeline to design, build and sell is 2 years or less.

This is Purely an example of the projected cost, time and return %.

NOW TO THE FUN PART,

These BRICKS in the IBO Initial Brick Offering could be divided into Units of measure, but cant really use the Term UNITS because that can be confused with a Villa-Unit.

So one Brick of Investment = $10,000 Investment. There will be Other denominations.

One Chip = $1,000 Investment

One Brick = $10,000 Investment

One Block = $100,000 Investment

One Slab = $1,000,000 Investment.

So as you can see above, one Brick = ten Chips. And ten Bricks = One Block of Investment.

This Concept is something I am fair Dinkum about, I am a Licenced House Builder, so my licence allows me to build Units and Town Houses, Villa Units etc.

But sourcing Capital from banks has limitations due to that bank being able to bankrupt a Builder any day they see fit.

So a Development is better to be done without any overhead Financing Costs of ongoing Interest expense.

This Idea allows all people to invest in Property from one Chip size of $1000, or even a Slab of Investment that is 1 million.

Right now there is parts of the World where Banks offer a negative return for term deposits. So there is Buckets of Cash around the World looking for any kind of return.

The Objective of this Concept is to use a similar Model to an ICO, Initial Coin Offering like Crypto Currency. But this would be Called Bricks, or an IBO Initial Brick Offering.

If a Building Project was half completed and all going to plan, assuming 20% return was on track. If during half way point of the Project, some Investors may want to SELL their Bricks for a 10% gain.

So Other Investors could Buy those bricks, with a Bid and ask price. So now you can see how this could become very big, very fast. It could attract alot of Investment, and generate alot of development projects.

The Bricks bought at the start of the IBO for $10,000 per brick, could be re-sold and traded during the Project to other Investors at $11,000 per brick, or whatever the market is floating at.

So it allows Investors to freely Invest in Property Development, Buy and sell, Bricks, Chips, Blocks, and Slabs.

Each development would have its own Tradable Code, The bricks would expire and be Paid out at the completion and sale of the project.

Or Brick holders could roll-over their bricks into the next project, like say a 20% return per brick = 1 Brick and 2 Chips rolled over into the next Development Project.

Let me know what you think

Cheers Chippy

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You would require an AFSL IMO and PDS
There would be potential CGT issues
The investor would be solely reliant on you not falling over (the entire project), inherent risk.
Are you talking 1 house at a time or a development?

The bricks would expire and be Paid out at the completion and sale of the project.

But the project would be sold off I assume in chunks or units etc, so why would one need to wait until the whole project has sold?
Maybe need to pay down the return on a sliding scale as properties settle?

If you are spruiking to non sophisticated investors would need to be a MIS IMO, unless listing in which case issue shares (bricks).

Rolling over into the next dev also bad idea, you won't get every dev right IMO.

Good luck, don't hate the concept, im cynical by nature, it has merit but prob requires some good legal advice.