The BRIKCOIN token growth model is based on a revolutionary financing and operational model devised by the creators of the company.
In essence, each project will go through 2 phases.
Acquisition & Development Phase
A BRIKCOIN-controlled special purpose vehicle (“SPV”) will, at its own cost and in partnership with the relevant local authority, acquire or develop new rental housing.
This housing will be available for occupation by tenants at the full discretion of the local authority.
Planning consent will be sought for 100% affordable housing, available to rent at discounted levels to the open market, and levels lower to currently defined ‘affordable’ rents.
100% of BRIKCOIN’s housing will be genuinely affordable rented housing and 100% will remain in long-term ownership at all times.
Because BRIKCOIN is private, right-to-buy legislation does not apply, and every home built can remain in long term ownership. Right-to-buy is viewed negatively by local authorities as it is seen as a transfer of an asset out of the ‘affordable’ market into the open market.
BRIKCOIN will grant the local authority a 45 year right to occupy the land plot and BRIKCOIN will develop housing that meets the planning qualifying criteria of ‘affordable’, under a legal agreement (“Concession Contract”).
On Day 1, and for the full 45 year term of this agreement, the local authority will guarantee a monthly fixed rent (“Guarantee”) to BRIKCOIN, in exchange for BRIKCOIN giving it the right to house tenants in the housing it has developed. The Guarantee will be fixed on Day 1 subject only to CPI-linked movements. It is based on an amount that will enable sufficient funds to develop the project and provide BRIKCOIN’s development profit.
The Guarantee will be set at a discount to all potentially competing rental categories, including the local housing allowances (“LHA”), or what used to be called housing benefit, set out by the Department of Work and Pensions.
During the operational phase, BRIKCOIN, in conjunction with the local authority, will manage, let and maintain the units, letting to a mix of tenants at the full discretion of the local authority, at the discounted rental levels that were agreed at the planning stage. The rent collected from tenants by the BRIKCOIN/ RP/Local authority partnership (which could in theory be charged at up to currently defined ‘affordable’/ Intermediate levels, but in any event which would have been consented during the planning process) will always significantly exceed the level of the Guarantee, such that the Guarantee is unlikely to be called upon.
This is significant in that this contingent liability Guarantee will not appear on the local authority balance sheet as a liability. In effect the BRIKCOIN housing is ‘self’-financing’ as the income derives from tenants themselves, and not the Guarantee. The Guarantee is merely additional security for BRIKCOIN’s funders. Any surplus rents collected will be passed to the local authority as sustainable income generation and/or to cover management and maintenance costs.
The cost of management services will be met by the local authority, either via sustainable income generation collected over and above the Guarantee payments, or from its own cash resources
Since demand for affordable housing vastly outstrips supply, BRIKCOIN properties operate in a very low risk segment of the market which means that investors can be confident that the properties managed by BRIKCOIN will operate at close to maximum capacity at all times.
To learn more about BRIKCOIN and to become part of the BRIKCOIN revolution, head over to account.brikcoin.net to create your own account and start investing and earning rewards.