HomeBrik Profit Participation Method and Agreement

The HomeBrik Profit Participation Method allows passive investors to profit from an injection of capital into residential real estate at the same rate as the property owner. HomeBrik’s financial instrument, Profit Participation Agreement (PPA) enables property owners to sell a fractional interest in their properties to investors. The owner and investor(s) share future profits in the property, through price appreciation and rental income.

PPA Details

The PPA has two parts. The first part of the agreement assigns a fraction of future property profits, appreciation and rental income to investors. The second part works like a home loan and provides investors with earnings of 2% of the invested amount per year. There are no monthly payments, however, as all interest payments accrue through the term of the agreement and are paid at the termination of the agreement (property sale or end of the agreement term).

PPA gives investor rights to the profits to the percentage of the property value invested in and the same percentage of the rental income. The property owner does not have to perform property improvements to obtain investment. However, the investor receives a right of first refusal to purchase the property when the property owner decides to sell it or at the end of the PPA term.

To see examples go to the investors page.

More about the HomeBrik PPA

  • The primary purpose of the PPA investment is to pay off the existing mortgage and other liens, if any. The remaining money can be used for any purpose, including property improvements, creating additional income, education, or other personal reasons.
  • The minimum PPA amount is $50,000.
  • There is no limit on the maximum property value that can qualify for PPA investment.
  • There are no more than five investors per PPA, each with a minimum investment of $25,000. All investors share the profit rate of property owners.
  • The sum of the investment amount and other liens, if any, cannot exceed 75% of the appraised property value.
  • The length of PPA (the term) can be from 3 months to 35 years. Property owners might be required to put a percentage of the investment amount for future property repairs in escrow.
  • The PPA investors receive a percentage of the property rental income, if any, equal to the ratio of their investment to the property value. Rental income payment can be made monthly, annually, or it can accrue and be paid at the end of the agreement term or when the property is sold.
  • The use of PPA protects property owners from the change of their tax base that occurs if the investor becomes a co-owner of the property through equity sharing. Protection of the property owner’s tax base is an essential advantage of using the Property Participation Agreement. Investor acquires future profits to real estate, but not real estate itself.