Real estate crowdfunding is one of the new tools for real estate investments that has been gaining more strength over recent years. This trend has grown in the heat of all the collaborative initiatives that the Internet has led.
Within this paradigm, the BrickFunding platform has carved a niche in Spain. And so is the vision of Juancho Arregui, CEO and founder of BrickFunding, on this sector:
Question: Can we say that the real estate crisis has ended in Spain?
Answer: In the big cities, yes of course. On quality land, that is to say, in the center of the cities, recuperation is evident. Of course, no one expects the two figures of growth and madness that there were a few years ago. The crisis has ended, and growth is back to a normal rhythm. Additionally, now new alternatives are rising inside of the real estate market that are causing it to renew itself.
Q: How are technology startups taking advantage of the ‘resurface’ of real estate business in Spain?
A: In the end, companies like BrickFunding and many others in real estate crowdfunding have seen an opportunity. The immersion of new technologies has also arrived in a business as traditional as brick and mortar is, and they are seeing that there are new ways to invest, especially in the collaborative economy.
Real estate crowdfunding democratizes investments. Before, investments in the real estate market were only within reach of people who had 100,000 or 200,000 euros and now people with 50 euros can invest in brick and put some of their lifetime savings there. Even brick has incorporated the technological revolution, and we take care to put the entire offer of this market in expansion on only one website so that the investor can find his best opportunity.
Q: Is there more reluctance in Spain when investing in this type of company compared to other countries?
A: Yes, unfortunately in Spain we have little financial culture. There is no culture of investing in the stock market and, in general, the people have always invested in a flat or that which their bank advises them to. And many times, the recommended movements generated benefits to the entity and not to the client, linked to scams like Afinsa or the stamps scam, which often caused people to be distrustful.
We put publicly available information on BrickFunding so that the people can understand what real estate crowdfunding consists of. Also, many were hurt by timeshares and they confuse that with Crowdfunding.
In Crowdfunding, you do buy property – not of the apartment because you do not go to the property registry, but you do buy a percentage of a company. The sector is also working to regulate itself. AEFI recently met with the CNMV to search for and work towards all the Platforms operating under the same regulation.
In summary, yes, there is a lot of reluctance, but we say in our newsletter “read, think, invest,” because we believe that informing yourself is fundamental. For that we recommend to everyone that thinks about investing that they look at our website and others to inform themselves and to make good decisions.
Q: Is there only space for companies like BrickFunding in large cities or will the capitals of smaller provinces join with real estate crowdfunding?
A: BrickFunding is not a real estate crowdfunding Platform, it is an aggregator of Platforms. We bring together, on one website, the offers of all the investment Platforms. And yes, there is space for the Platforms in smaller cities.
It is true that the recuperation of the real estate market is not as dormant in this type of city because in the larger cities there are more possibilities for revaluation and to rent, sell, etc. Even so, real estate crowdfunding is open to local developers that know their sector very well and are sure to know how to find investment opportunities in their city.
Q: What are the short and medium-term expectations for the growth of BrickFunding?
A: To create a network of trust with clients and users. At BrickFunding we believe in sustained growth based on trust. We are with modest figures, but we are very satisfied with the constant growth. Also, in the short-term we want to be present in all of Europe, and in the medium-term in United States and Asia. Our vision is to be the reference portal for real estate crowdfunding worldwide.
Q: Are investors really protected in this type of crowdfunding?
A: All investments have risk, but in this case, there is less risk because the good thing about brick is that the risk/profitability ratio is good, and additionally, you have a real asset backing your investment.
Interview originally published in spanish on cursos.com.