Magazine

A New Business Model

Nowadays, the needs of buyers and tenants are not the same as they were one or two decades ago. Modern lifestyles have led to an increasing demand for properties that offer flexibility and can adapt to multiple uses or situations, while being more economically accessible.

In this regard, at Brickstarter, we have always been attentive to market needs and dynamics, and we started by promoting vacation projects focused on maximizing benefits for our investors. These projects offered high returns thanks to the growing demand for tourist rental properties in key destinations. However, in our commitment to adapt to market dynamics and diversify our offering, we evolved and moved towards coliving projects, an innovative model that, although it generates slightly lower returns, offers the advantage of providing stable and consistent benefits over time. More recently, we have taken a new step in our evolution by incorporating use-change projects, taking into account the constant need to innovate in the real estate market.

These challenges also open the door to innovative opportunities that can be capitalized on. For this reason, we would like to promote a series of projects under a new type and investment model: Real Estate Flipping.

What is Real Estate Flipping?

Real estate flipping involves buying a property at a reduced price, improving its condition through renovations or upgrades, and then selling it at a higher price in a short period of time. The goal of this new model is to generate profits by leveraging the property’s increased value after improvements. Although we are going to put our own “spin” on it! 

The key to flipping lies in speed and value creation. It’s not just about buying low and selling high, but identifying properties with improvement potential and latent demand, performing renovations that make a difference in quality and functionality, and bringing the product to market precisely when the demand is ready to absorb it. 

This strategy shortens the investment cycle, provides higher capital turnover, and increases the IRR (Internal Rate of Return), as the profit is achieved in a shorter period of time. 

It is worth noting that we have already completed some flipping operations (although we didn’t label them as such), like the cases of San Telmo 1 or Cronista Viravens, projects that delivered the highest historical returns from Brickstarter (we’d rather not remember them, as we always prefer to remain conservative).

It is important to note that we are not going to publish opportunities with such high IRRs. We will continue publishing medium-term projects, with the difference that the IRR will multiply if we manage to sell the property in a shorter period of time. This will be our top priority!

The difference is that now we are advertising them as such, and our short-term objective will be to sell them from the very beginning. To achieve this, we must change the approach to our projects and the assumptions of our business plan.

We invite you to read our blog about the New Project Calle Lucena, it is a very ambitious flipping project, as well as visit the first opportunity of this New Project CalleLucena Estudio-A.