How are properties financed?

Buying a property is much more than covering the purchase price. We also need to consider the property’s tax burden, notary and broker fees, possible renovations, and setting aside cash reserves for the unexpected.

What is the total investment needed to buy a property:

Property price: The price we agreed with the seller to buy the property for
Renovations: The cost of any renovations we estimate will be needed to make to property ready for rental. In some cases, this can be zero if the property is already in very good condition.
Closing Costs: All costs incurred in purchasing a property such as real estate transfer tax and notary fees.
BRXS Fees: A one-time fee for BRXS for all efforts related to sourcing, acquiring & preparing the property.
Cash reserves: Cash reserves function as a buffer for any unexpected events like emergency repairs or vacancy. When a property is sold the remaining cash reserves are also distributed to all investors.

How do we finance the total investment:

Mortgage: A loan received from the bank to purchase the property. The mortgage amount can vary from property to property and is usually between 50% to 70% on the value of the property. All mortgages are interest-only mortgages so there is no repayment of principal.
Notes: Investments raised from investors from selling the brxs notes. These notes give investors the right on their share of the rental income and their share of the property appreciation on the long term.
BRXS financing: In cases, where a property would not yet have received a mortgage or have been fully subscribed by investors, BRXS also uses its own capital or its own credit line to finance part of the property at the closing date.

You can find a detailed overview of the total investment amount and financing on each specific property page and the property documents.
Updated on:
October 28, 2022
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