How Real Bricks Makes Real Estate Investment Simple and Accessible - Episode 99
In today's episode, I talk with Chris Gerardi, the founder of Real Bricks. Chris created Real Bricks to make real estate investing easy for everyone, even if you don’t have tons of money to start with. We chat about how you can own part of a property with just $100 and earn money from renting it out—without all the work of being a landlord. Chris explains how Real Bricks is different from other real estate deals and why it's perfect for beginners who want to start investing. If you’ve ever wanted to get into real estate but didn’t know where to start, this episode is for you!
About our guest
Chris Gerardi is an entrepreneur and the visionary founder of Realbricks, an innovative platform designed to make real estate investing accessible to everyone. With 17 years of operational experience at multiple public companies, Chris has honed his expertise in building teams and executing high-level operations.
His mission with Realbricks stems from a desire to empower individuals, especially young adults, to overcome traditional barriers to real estate investment. By championing fractional ownership, Chris aims to equip aspiring investors with the tools they need to navigate the evolving landscape of personal finance, unlocking their potential to build lasting wealth.
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TRANSCRIPT:
Naseema: [00:00:00] Chris Gerardi is an entrepreneur and the visionary founder of Real Bricks, an innovative platform, an innovative platform designed to make real estate investing accessible to everyone with 17 years of operational experience at multiple public companies. Chris has honed his expertise in building teams and executing high level operations.
His mission with Real Bricks stems from a desire to empower individuals, especially young adults to overcome traditional barriers to real estate investment.
By promoting fractional ownership, Chris aims to equip aspiring investors with the tools they need to navigate the evolving landscape of personal finance. unlocking their potential to build lasting wealth.
What's up, my financially intentional people. I'm super excited to be joined by Chris Girardi, and we're going to talk about one of your favorite subjects, real estate, but from a different lens and a different approach [00:01:00] to real estate. And I'll let Chris explain it. But, you know, I think the, the real estate space can be a scary place or one of those places that a lot of people jump into blindly because they think that they need to own a house.
Um, but I want people to know that there are different avenues to, um, home ownership or using real estate as an investment class. So welcome Chris to the financially intentional podcast. So happy to have you.
Chris Gerardi: Hey, I appreciate you having me on. Thank you. Thank you for taking the time.
Naseema: Cool. So let's, let's just hop into it. What is real bricks and, um, you know, what is your approach to real estate investing or is it real estate investing?
Chris Gerardi: Yeah. Yeah. So, you know, it, it started off, uh, about four years ago for me. It was kind of lead in from, from, uh, you know, I've always been into, uh, you know, stocks, stuff like that from a very young [00:02:00] age. I think I, I did my, you know, I mean, obviously I wasn't 13 years old when I did my first stock trade, but I was 19,
Naseema: You know what? I've had people on here as young as 9 and 12 that have had bought into
Chris Gerardi: my, my son is nine years old or just turned 10 and I let him help pick, uh, my stock picks on my Robinhood app. and so, you know, it was always interesting from, from an early age, the, the kind of the way these things work markets and such, but basically what happened was, uh, you know, the alternative asset class of, of crypto and stuff came out.
We started, I started doing a lot more research in probably late 2014. And, and that's kind of when I got involved there and I, and I looked at it and I said, man, wouldn't it be amazing if you could have a digital portfolio, that's super simple to use accessibility, um, with low barriers that is connected to a tangible asset.
Because one of the things that always kind of was in the back of my mind was like, [00:03:00] um, you know, I know that I'm not, not to hit on, uh, you know, too hard of punches on, on alternative asset classes, but, um, You know, things that can be easily controlled can be easily manipulated. And so I knew that. I've known that for a long time.
And so I was like, well, maybe there's a way to do this with real estate. So that way, um, you know, people can have, be connected to a tangible asset that's legal, that's compliant through the SEC. Obviously there's a lot of regulation to get there. Um, but also at the same time be, uh, able to, um, you know, Invest in and sell out when when they fill the need most of the funds that you get involved in that maybe you can do online.
There's a few of them. Uh, you're getting into a fund, so you don't necessarily know exactly what every aspect is, but. Also, your path, if you want to sell later. Is a manual [00:04:00] process like it. Most of it's going to take time, and there's certain terms you've got to follow. There may be, uh, early exit fees, stuff like that, right?
And that doesn't really work for the average everyday person. Um, I think it's very different for the average everyday person because the average everyday person doesn't have necessarily a very, very heavy, large income. nest egg, right? So they can't, you know, it's once again, I do believe that, um, you have to be disciplined to invest.
And the first step is always to take action, no matter what, whether it's 10 or a million, 10 million point being is not everybody has that ability. So it's very easy when you, when you hear people get on TV, you know, CNBC and they go, well, you know, I invested in this and I'm in it for the next 10 years or seven years.
And. Great, that sounds great. It sounds great when you're, if you're selling it on a roadshow, like, but that's not reality. [00:05:00] Uh, you know, most people don't have, you know, can't wrap up their money into assets and sit on them for 10 years. It's just not the reality that we live in. And it's not a reality because we have a government that loves to print money and the cost of inflation, you know, at the end of the day, um, in 5 and 10 year spans, a lot of stuff happens.
And some of those things can be positive and some of those things can be very negative, depending on what your Fed decides to do. And so I, so with that, I, I created real bricks and it's been, it's been, it's been a long haul. We just launched. It's taken, take a lot of time to get through regulation. It took an immense amount of time to create the platform and the tech to where it's compliant.
and follows the, the protocols that are needed. And, and also with that, it has a secondary trading or a system in it. So that way people can sell their assets to one another in a marketplace, [00:06:00] which is not been done before, as far as the real estate piece goes like this. And so that was really a big piece of it for me was I looked at it and I was like, okay, how do we do this and do it right for our consumers, for the customer?
Because once again, You get lost in all the mumbo jumbo stuff and you forget about the customer and that, that happens in companies all the time. Um, and if you can remember the customer, then you'll, you'll, you'll probably do well. So I was like, okay, we need to have an easy enter, right? Swipe. You pick your asset.
Single family homes to start with. They're simpler to understand. We got to get mass adoption. We need people to understand. And so there's a, there's a pathway to that understanding. That pathway is not some super complex asset that they can't figure out, right? It needs to be very simple. Homes that they see in the neighborhoods that they live in.
Okay, I see this home. I pick it. I look at the, the APY or the return, the estimated return, and I swipe [00:07:00] up and I'm an investor. Literally that simple. It literally takes that long. And then, um, when it's fully funded, so when it, when it meets the minimum threshold of funding, then it will be placed on the marketplace and then people can.
Sell and transact with it. Maybe they hold on to it for 3 years. Maybe they sell it. But with that said, as long as they hold on to it, they're going to get a percentage of the net revenues from the renters back.
Naseema: so to break that down into a little bit more simple terms. So say there's a house on my block for sale. As a matter of fact, the house across the street just sold. Right? So we would go into it. Me, Chris. A couple other people, um, will go into buying the property together and then, um, we would rent out the property and share in the return from the rental and then maybe later on down the line, be able to sell the property for a profit.
Chris Gerardi: Yeah, but it would be you [00:08:00] and maybe a thousand other people.
Naseema: okay.
Chris Gerardi: And, and you don't have to worry about any of the renting or any of it. So how it works, so yes, you broke it down. It works just like that. Um, but the key component is, is. You are a legal owner in the interest of that asset, but you don't have to manage that asset because we have a management team that manages it for you.
And then what happens is those net returns get distributed right into your account. Your your your uh, I want to say profile. Sorry not profile portfolio your portfolio And so every quarter your return shows up in your portfolio. You can you can transfer to your bank account You can reinvest it. You can let it sit there you decide
Naseema: So, what is the minimum buy in for your projects?
Chris Gerardi: 100 bucks
Naseema: Love it. I love it.
Chris Gerardi: 100 dollars is a [00:09:00] minimum buy in for the for the primary markets When the assets start to go to the secondary market You You can those minimum buy ins could be three dollars. They could be twenty dollars It could be nineteen and you can buy one or you can buy ten or you can buy a hundred whatever you want to
Naseema: you explain the difference between primary and secondary market? Uh huh. Uh
Chris Gerardi: why there is
Naseema: Uh huh.
Chris Gerardi: reason why you should get in the primary markets is So say we let's just say we bought home one two, three, four real bricks avenue, then we paid 300 and this actually is happened Um, we bought a property we paid 380 5, 000 for that property. Um, obviously there's some fees and stuff that go into that when we, when we bring it to, to our consumers.
But essentially that property just was valued at between 425 and 400. Well, the comps were 425 to 430, [00:10:00] 000 bucks. That's, uh, you know, a little over a year later. And so you, you get to get in. Basically early it's it's like it's similar to like a company if it ipos, right? You get to get in you get to hold on to it If the when the when the shares appreciate you can sell them or you can hold on to them I mean, there's always you know, once again, it's not I don't give investment advice, but And it's not you know, you can always lose money in anything But I inherently believe that it's less likely when it's attached to a real estate asset And so you'll be able to see that.
So you buy in and so say that the asset. Um, is 400, 000 dollars and we are going to allow 40, 000 shares. At 10 dollars a share,
Naseema: hmm.
Chris Gerardi: so you can buy up to 9. 8 percent of the shares. And and so you can buy, you know, if that's 10 shares for 100 bucks. 100 shares for 1000, [00:11:00] whatever you. get to decide and then when it's fully
Naseema: are you saying is the 0. 2 percent like, accounting for fees or.
Chris Gerardi: 9. 8. No 9. 8 is just a legal You know, it's it's as far as as far as being compliant with the sec They don't allow any owner to own more than 9. 8 percent
Naseema: Okay. Okay. 9. 8%. But that's not 9.
Chris Gerardi: Yeah, so so in other words if if you were to go into Say a home that's four hundred thousand dollars that has forty thousand shares available You can buy 9.
8 of those shares available You can buy 9. 8 of those shares available
Naseema: Got you. Mm-Hmm.
Chris Gerardi: And so, um, but, you know, most people are looking, you know, that are that are getting into this or looking at this and they're going, I'm going to put in, you know, 3, 500 bucks, maybe 1000, 1500 in each 1 or whatever. And they, and they just add to them.
Right? So, once again. That's where kind of the discipline comes in. It's just you, you buy into them and then once they're fully funded, they'll [00:12:00] go to the secondary market and you can, you know, make your decision what you want to do there.
Naseema: But I'm, I'm still confused on what the secondary market is.
Chris Gerardi: So the secondary market just says, Hey, this house was fully funded and now you can transact in it.
Naseema: What does
Chris Gerardi: it basically, so it basically says, um, it's full of, you know, everybody who bought into it, they sold all 40, 000 shares, all 40, 000 shares are, are sold. And now it's still the same app, right? You just hit marketplace.
And then the home shows up there instead of on the primary. And, and then it says, Hey, you know, in your thing, you can say, uh, you know, I own a hundred shares. I want to sell, you know, 15 of them
Naseema: Got you, got you, got you, got you. I got
Chris Gerardi: or someone else has one that you that you missed out on and maybe you're like man I'd like to own that home.
There's there's 100 shares for sale. I'm gonna go buy them.
Naseema: Got you. Okay.
Chris Gerardi: It's just a transfer of Ownership into your portfolios.
Naseema: I got it. Okay. That makes a lot of sense. Thank you for [00:13:00] clarifying
Chris Gerardi: Yeah I wish you know, once again, you know, it's it all comes down to you You know the adoption happens as people become more, uh, they understand it more And, and, and, you know, the complexity of the stock market is, is, is just that, right? Like, you can buy, sell, you can do all these different things. These are complex, that's why a lot of people don't do it.
Um, but with, with Real Bricks, it's, it's pretty simple. It's, it's very simple. It's like, you buy in, and when it's, you know, when all the shares are gone, now you have the ability to do what you want.
Naseema: Why would this be an attractive investment for your everyday, like, nurse like me?
Chris Gerardi: Because I think really what people have to realize is like, look, you know, you, you're, you're, you make an income, you know, what do you, you have a lot of things against you, right? You're number 1, most people are on like a salary or hourly. They're, they're stuck at it. They're stuck at it. It's a threshold.
You're, you can, you [00:14:00] can basically determine your trajectory of income.
Naseema: Mm hmm.
Chris Gerardi: But what you can't, what you cannot
Naseema: hmm.
Chris Gerardi: predict is the trajectory of inflation. I mean, you can put predictions out there, but we don't know for sure where that all goes. So I always tell people, I'm like, it's like an escalator. You know, if you want to go to the next level, you've got to get on the escalator. And, and how do you get on the escalator? Well, you've got to put, you've got to, you have to be disciplined to some degree, but you put some money into an asset. Well, not everybody has 000 extra dollars as a down payment for a rental. And then you go and get the rental and then you got to fix everything that needs fixed.
And then you've got to like rent it out. And then what if somebody like misses a payment or what, you know, these,
Naseema: You got to
Chris Gerardi: you have to hire an attorney. You have to hire an attorney and then you have to go through that and then they could and there's all these different things Right. So when you look at it from that [00:15:00] perspective, it's like, you know, we look at each property Um it for various reasons and we pick the ones that we think are in stable areas that we think are going to have Continued growth that are going to have low eviction rates, you know, uh high Uh job rates, you know cost of living makes sense all these different things You And then we go, okay, let's offer this to people because we think it's a safe, safer bet.
Um, but you know, not everybody has the money to do that, that, that, that way. So, and not only that, I mean, what about your time? Your time is important. Like, time is money. If you're spending all your time trying to manage multiple assets every day, like, I know people think that it sounds fun to like, own a, you're like, oh, I got a portfolio of 100 homes.
You're like, wow, you know, think how much money they're worth and all it's like how much money like think about the headache. Like, there's a lot that goes on taxes, all these different things that happen insurance. All these different things that [00:16:00] continually go on and continually change. What doesn't change for most people is their income.
What does change is all the external factors around them. Taxes go up, inflation goes up, cost of living goes up, on and on and on. So how are you going to hedge that? You need to get on the escalator. You need to put your money in something that has a trajectory to go up because the asset is going to increase as long as the money printer is going.
The asset is going to increase now. I know like, you know, we had an incident Everyone goes. Oh, well the stock, you know, the housing market collapsed in 08 and everybody's calling for this
Naseema: how do you deal with that?
Chris Gerardi: You, you know, you could go, you could go online and go to YouTube and find these people that talk about how the world's cut.
They've been, but if they've been talking about how the economy is going to collapse for 10 years, right? Like, like, we, it's going to happen. This is the year. And it's like, what people got to realize is. Things have changed since 2008, right? Like the Fed put a [00:17:00] lot of guidelines in to whether you like it or not, to stop that type of stuff from happening.
Like, you know what I mean? Um, and you know, we were also at a time where adjustable rate mortgages were becoming massively over utilized. And then, of course, what, you know, adjustment in, in, in mortgage rates and boom, there's your trigger. We don't, we have what we have today is we've had a very long path of low interest or no interest.
Right?
Naseema: mm hmm
Chris Gerardi: most people have gotten themselves in low interest. Mortgages, and so they're not necessarily going to hop up and be like, hey, I'm gonna sell my house tomorrow. Because I want to take on this six and a half percent mortgage interest rate when I'm at a three and a half But it doesn't make any sense, right?
So most people are gonna so a lot of people are gonna are gonna sit on those And and even though people will still buy and stuff that you know that it's not [00:18:00] I don't see this This massive shift that that a lot of people call for I do believe we will see shifts more localized Right,
Naseema: hmm.
Chris Gerardi: but, but I don't think we're going to see it on a national level like we did then.
I mean, is anything possible if anything's possible? I think, I think Rockefeller may have said that anything is possible. So it may be possible, but, you know, I think, I think the biggest thing for us is like, we're like, hey, like, you don't have to have tons of money if you, if you start with 100 bucks and put 50, 100, 200 a paycheck, whatever works for you.
Right. on that escalator so you have it in something that is of value and that is tangible.
Naseema: So, I think I thank you for addressing that because I am 1 of those people who were traumatized by the housing market crash. And so, um, have been very hesitant to get back into real [00:19:00] estate. Um, into home ownership and. Except for, you know, my primary residence, but like, um, like real estate, like, as a, an investment class has been like, a scary thing for me, um, after losing so much.
Um, but I understand what you're saying, it's a different environment and I like this platform because, um, I like the way you guys put it, it democratizes, it democratizes home ownership. It makes it more accessible, um, that. To to be able to start with just a 100 dollars, even if you don't fully understand it as an asset class is 1 of the things that, um, I like to, um, encourage my people to do who are like, new to investing, you know, are just.
Not, um, very clear on investing are very hesitant about investing. You start slow, but you act, you get started and you learn along the way. I'm not going to tell you to take out a second mortgage and dump your money into, you know, a Bitcoin [00:20:00] or something like that. Like you were hearing a lot of people do a couple of years ago.
Um, but yeah, a hundred dollars is something that most people can afford. Start there. Learn the platform, get familiar with what you're buying, how to transact, do the education along the way. But like you said, get on that escalator going up, because the only way to truly build wealth is to invest and there are several forms of investing.
I love I'm a big index fund girly, but I also believe that, you know, at least. 5 percent of your portfolio should be dedicated to other kind of asset classes. And so I'm always looking for something new.
Chris Gerardi: Yeah, no, I think it's, I think it's, it's great what you're doing because you're, you're, you're getting, you're, you're trying to, you're, you're, you're educating people and getting them to, to realize that they have to get on. And I just use this as a, you know, I use escalator because it's, you know, it's [00:21:00] simple to, to, to build out in your mind.
But, but I think what people have to realize is you have two options. You can be on the escalator down. Or you can be on the escalator up and inherently everything does have risk. But 1 of the biggest risks is the willingness to not take. Risk, and I, you know, it, this, this, this is cuts more at the core of me because, um, I watched.
The crisis go down. And it was ugly. At the time, I think I was 26, if I'm not mistaken, I had a business. Um, I literally helped, I let people run up pretty large bills in my business at the time because they lost their jobs. They literally did not have an income. And I was young [00:22:00] and I was like, man, this is, I just, you know, 26 years old.
I was like, still very young to the, to the world, the economy. Um, and you know, I watched that all play out. So I do understand people's fears of that, but what we got to remember is
Naseema: to do everything
Chris Gerardi: optimism is key in the willingness to take small steps, which are small risks. You don't have to, you don't have to put everything into one thing.
Naseema: not
Chris Gerardi: But you have to be willing to do it. And what I, what I have realized is people who are willing to do it, whether they start off with a hundred or a thousand or two thousand or whatever it is, it, it, it, it, it, man, it, I think the biggest, most beneficial piece is what it does is their confidence. I mean, just to, for them to do it, take the steps and they look back and they're like, man, I started off with a hundred and I've got three thousand dollars in this portfolio now.
Naseema: Mm hmm. Mm
Chris Gerardi: Or whatever it is, I, I'm feeling like. I'm [00:23:00] actually on the escalator up instead of going down. And I know that's hard for a lot of people, that first step is difficult. But man, the, the, the greatest first step that I ever took in my, in my life looking back was risk. It truly was. And when I, you know, when I started taking risk, I was, I was younger, I guess maybe I'm more risk adverse than many, but that's okay.
But, you know, not everything that I've done has panned out perfectly. But you've, you've got to be willing to try and sometimes. What you'll realize is in trying you will learn so much. And you, and you probably know this, right?
Naseema: Definitely.
Chris Gerardi: Starting this podcast was a risk.
Naseema: Yeah, I remember like delaying so long because I thought I needed to know, like all of these things. And if it wasn't for like a really good friend saying just like, just do it. I'll be your first guest. We'll figure it out along the way. And I just stumbled through it. And now it's just like push a button.
It's easy. Have all these things in place. Automated. Boom. It's done. Right. But it [00:24:00] is, is that, like I said, that, that learning, Taking that first step to actually commit to doing it and just getting it done and learning along the way. Yes, you're going to make mistakes inevitably, right? But you learn in the process.
And so, you know, that's what I just tell people. That's my biggest, my biggest like lesson for people are the biggest thing I tell people is just take that first step. Um, So, yeah, I've, I've, I've learned a lot just in creating this platform in general, learned a lot and, but the lessons have been crazy, exponential, the things that, the things that I've learned that I never would have thought, um, I could have learned the world I've been exposed to, I never could have imagined.
So super grateful for just putting myself out there. Um. But yeah, people live in fear and they, and they don't, um, but I just choose to do things scared.
Chris Gerardi: You know, [00:25:00] it's, I think, I think that's the way to, to, to growth and optimism is through is through the fearful challenges that lay ahead. Uh, you know, but once again, you know, I mean. I've, I've, I've had three businesses and, and when I, and when I just started, when I decided to do this one, it was very much like, how can I impact on a, on a greater scale and help others?
Um, you know, it's easy to do things for dollars. It's harder to do them. Um, Well, I guess it's easy to do things for dollars and for if you're passionate, the dollars will come. But the idea is, is that you're, you're willing to to create things that benefit a larger group of people. And I think that's really what I've learned through through my journey of taking risk.
Right? I know that this isn't talking about real bricks of platform, but it is a journey, right? It's a journey of risk. It's a, it's a journey of trying something new. [00:26:00] And that's what real bricks is offering. It's, it's saying, hey, like, this is a journey for something new. You know, we're there's not there's not really any companies that are really doing this to this degree.
So this is this is a journey for us. It's a journey for me. Like, I'm taking a minute for us to do this, you know, but that's that's part of it. Right? You know, before prior, you know, it was like, you know, I was, I was looking at all these involved in. All these different asset classes and stuff that I thought were cool and unique and different But you know at the time, you know I was I also had a full fledged apparel business that I started from the ground up and it was an idea Back, I started that back in 2016 in 2020 hit And I was already kind of formalizing how I was going to create this idea before that happened And then 2020 hit and it was like a trigger event the car everything Nose dive, but then after that short nose dive I manufactured everything in the US, the price for, [00:27:00] for the fabric, the price for the late.
I mean, it went so sky high. It was insane. And I said to my wife, I said, Jen, I, I've got to transition. I've got to look, I've got to transition because now's the time. Now's the time to look at what I was thinking about 7 months ago, and I need to follow again. I need to make a move because I do believe in years ahead.
People are going to need this ability to quote unquote, get on the escalator and start to go up because I felt at the time things might be going in the reverse. Now, not what we're talking about the cost of living the homes and all that stuff, but people's quality of life. Might be going in reverse and I knew it was going to be a very long trajectory to get there, but, but, you know, now it's like, it's like, real.
It's like, holy cow. I mean, it's. Seem like a blink of an eye. That's the crazy part. You know what I'm talking about
Naseema: Oh, definitely.
Chris Gerardi: You probably look back for when you started you're like, where did all the time go?
Naseema: Exactly.
Chris Gerardi: But but that's that's when you know, you're on the [00:28:00] escalator up
Naseema: Yeah. Yeah. Mm hmm. Yeah, definitely. So, can you explain the difference between real BRICS and say, for example, a syndication deal?
Chris Gerardi: Yeah so like so, you know syndication deals are more like where people come in and they they come together on on an asset in the end I think syndication deals are hard to put together for a lot of people because everybody I mean think about the most basic way is You When you do a deal like that, it's like everybody has a different intent.
Naseema: Mm
Chris Gerardi: maybe, maybe their intent is to make money, right? Like, we can all agree that their intent is to make money, is to make value. But when they go into it, they all have intents that don't necessarily, or not necessarily always shown in the beginning.
Naseema: as a
Chris Gerardi: And I think it's hard to put those together because you have to come together and pull that money together to create that deal to happen. And then, and then, hey, what about, what if, uh, [00:29:00] Johnny decides early, he's, he doesn't want to deal with this. Or, you know, Tim's like, I want this, I want to hold on to this deal. You know, there, there's like all these different things. And, and, and when you, when you bring deals together like that, there's things that can go wrong.
And when things go wrong, in partnerships of any sort, or business deals, they become expensive deals. And they become potentially dangerous financially
Naseema: Um, Mm, Mm,
Chris Gerardi: whether it's a hundred dollars or a hundred thousand Or you know, we'll say forty thousand dollars or whatever if you if you hit that threshold You're on the same level playing field that person who has more shares than you is not making the decision Over you the managing partner, which is our company makes a [00:30:00] decision and that's all disclosed Hey, we're going to collect this.
We're shooting for this trajectory of rent. We're shooting for this This is it's all in the disclosures and that's easily accessible On our platform like if you go in and you pick the asset like one, two, three, you know real bricks avenue You you click on it. You go down you look at it. It'll have all these disclosures.
You can look at all of it It'll tell you exactly what we're going to do You
Naseema: Yeah, I'm like, okay.
Chris Gerardi: It's super simple. I mean, obviously disclosure disclosures, right? There's a lot of stuff in there, but it'll tell you. Hey, we're looking to hold on to the home for 5 to 7 years. We may sell it sooner. If we feel the markets favorable, something that degree.
And if we do, everybody gets paid based off their ownership.
Naseema: hmm.
Chris Gerardi: But the key piece is you're not going to have somebody who has. You're not going to have these situations where people are battling over, you know, the deal, the house, what's going to happen all these things. It's just, it's just the nature of the beast.
How how it's done. [00:31:00] And I think that's part of, you know, with the regulatory aspect of it. How. The FCC wanted it done where they've created these guidelines for a reason because of that exact situation where it's like, hey, you're buying into this asset, you're going to own an interest in this asset, and, but you are not going to be the controlling member of this asset, and you're not going to have voting rights and those things, and that's not, you know, to be honest with you, it would be impossible to create something that is this frictionless, If we did it that way,
Naseema: Yeah. Yeah.
Chris Gerardi: so, you know, maybe the other piece of it is, is you're not going in with potentially a large amount of money to write.
Like,
Naseema: Yeah. I
Chris Gerardi: a reason why we've made it
Naseema: the minimums are like 500, I mean, 50,000, a hundred thousand dollars.
Chris Gerardi: so I, I have. A very close friend of mine who, who his wife and him got involved in in in 1 of those deals. And it was for, um, nursing [00:32:00] home properties and, um, you know, once again, it's not investment advice. It's just reality. They put in a little over a million dollars four years ago. They were, they, they are in legal battles up the wazoo right now. And they, they, if I, you know, he actually, I talked to him about a month ago about he's like, Chris, if we recover. Four to five hundred thousand dollars of our money out of this deal when everything's done. It'll be a miracle
Naseema: Well, I could have told you that wasn't a good investment, but who? Nobody
Chris Gerardi: But you but but people do this, right? Because what happens is somebody knows somebody who has some money who knows somebody and they're like, hey, you want to get on this? This is the greatest thing that's ever happened. Right? But those those deals are so complex And there, and there's so much more that can, to me, that can go wrong because it's like, with what we do, it's very simple.
It's like, hey, these are, this is the house, this is it. There, there's no, we're not going to let someone come in [00:33:00] and cause a chaos in this deal. We're all going into this deal with the same understanding. That's it. It's, it's very simple we can exit the great, the great thing about it is we can execute on that because we're the managing technically the managing partner.
So as a company, so we were like, Hey, we know the market's a good time to sell. We're going to sell. Um, but on the, on the other flip side of it, it doesn't really matter because you're going to have the ability to be in the secondary market anyway. So maybe you're like, Hey, I want out of this now. Okay.
Well, great. You, you don't need to, you don't need anyone's approval. You just go swipe your phone.
Naseema: yeah,
Chris Gerardi: know what I mean? It's not like you're going to show up and I need to get my attorney and I need to get my money out and I need to do all these things. It's like you show up and you're like, hey, I owned 1000 shares and I'm selling 500 of them today.
Swipe. No, you're not going to. It's not going to come back and say, sorry, you're not allowed to do this. It's it's
Naseema: So, like, when you when you do want to sell your shares, you just sell them. You [00:34:00] don't have to wait for another person to buy them. You just
Chris Gerardi: in in the beginning. It'll be a little bit slower and it'll be mostly looking for other buyers. So, I mean, I would tell people, you know, once again, right? Like, look, you don't want to get on on on the on the escalator and then just hop off. Right? Right?
Naseema: Mm hmm.
Chris Gerardi: You know, I think it's a, I think it's a wise decision.
Once again, not, I'm not giving advice here, but my thoughts are it's a wise decision to, to hold for a little while and, and, and let it grow. And, but, but
Naseema: not day trading. This is
Chris Gerardi: yeah, we're no, no, no, you're not going to see, you're not going to see like massive day trading going on with this stuff, you know, um, but, but I do believe, you know, there's going to be enough, you know, demand as we go that people are going to want to buy these.
And if someone's offering them, people are going to want to buy them.
Naseema: So I'm looking through a deal right now for a house in Nebraska, Omaha, which I know nothing about, and the, um, [00:35:00] the, uh, offering amount is. Like, I'm just looking through, like, how the deal is structured. So, the deal is totally funded, um, by the shares that are that are sold. Right? Because there's
Chris Gerardi: we, we
Naseema: take out a
Chris Gerardi: yeah, we buy the, we buy the properties first. So there's no, there's no leverage on them, right? We buy them outright cash.
Naseema: but do you wait until it's fully funded to buy a cash?
Chris Gerardi: No,
Naseema: Okay, so you have so you already have the money sitting
Chris Gerardi: they're, they're ours. They're the company, the company owns them. The deeds are in the company's name. They're insured all that. It's all done
Naseema: Okay. See, that's that's great because I see the mortgage amount here in the interest rate. The mortgage amount is 0. the interest rate is 0. so why is that there?
Chris Gerardi: because that's just letting, you know, there's no leverage that
Naseema: Okay, it's not it's not leveraged
Chris Gerardi: not a leverage property. The reason that's there is because maybe down the road, you know, you might look at like a multi, you know, this is it's, it's, it's tech build out for the future, right? Like, we don't know what will change and won't change.
[00:36:00] But as of now, no, there's no leverage on any of them.
Naseema: Okay. Cool. So here you have the purchase price, which is 3036, I mean, 360, 000 dollars. You didn't put any money in improvements. You have the closing costs here, your sourcing fees, and then it. Chose a total property cost and then the thing I love to talk about is fees because, like I said, I'm an index fund girly and always look at, like, low fee investments.
Um, but can you break down, like, what these fees represent, like, your asset under management fees and then your monthly management fees and are the all the all is that all encompassing of the fees or is there more.
Chris Gerardi: that's it. Every fee has to be listed. So in our, our, our AUM fee is, is 0. 75 of 1%.
Naseema: Okay.
Chris Gerardi: it's it's very small. Um, and that's just an asset under management fee, right? There's costs involved with these assets, right? Because we got it We have to [00:37:00] put our time and effort into making sure that they're taking care of all these different things But generally speaking the fees are broken down.
It's like we collect, you know an eight percent fee of of the rent structure Um, if if we just if we do if we sell the property we collect that fee Um, I don't foresee that happening too often because of the marketplace. It would make more sense for us to keep it And so, um, we have that and then there's some, there's a couple of things like, there's a holding amount that we have in there.
That's just like, hey, look, like, the roof goes. We got, you know, we got to cover the cost of the deductible for the roof, but like, and it breaks down like what we've put in there, which is like insurance has been paid for stuff like that. But for the most, and then, and then, um, the. Property management fee is in there, but we, you know, part of that is well, I mean, obviously that fee, I think is is 8 percent total, but, you know, [00:38:00] we have to manage the, the property in every aspect, right?
Like, it's, it's, it's a lot of effort. I think overall, you know, like, when you get down to it, our fees are not really that high. Um, because we're basically more of like, hey, we're taking a little bit from the rent and we're taking a little bit from the management of the property. So that way, we can maintain and keep the property because it's a value.
To the investor that the that the that the house. It stays a value,
Naseema: Yeah.
Chris Gerardi: And so that's that's really the way we, we look at it. Um, I mean, you could look at other other assets, you know, like funds and stuff. And you get into some of those fees. Um, you know, they take large amounts of profits. There's all these different things.
We don't have anything like that in there. Um, it's, it's pretty simple structured, right? Like, we, we, we look at it. We, we make some money off of that stuff. I, a lot, but I think our
Naseema: you see, you see, [00:39:00] um, stock accounts like, uh, you, you know, that's like, what are they called? Uh, I'm
Chris Gerardi: like a, like an advisor.
Naseema: Yeah, like, well, that by statistics could charge up to 2 percent of assets under management and that's not even like a physical property that they are maintaining is basically to pay for their intellectual property or their platform that they're using.
Right? Or whatever have their pockets, but like, so in terms of fees, especially when it comes to a physical, like, structure, I don't think that, um, it's really a lot. Uh,
Chris Gerardi: But if you think about like, so we'll take that for one of those, you know, those, the majority of those properties have gone up between four and a half and six and a half percent since purchase. Already in appreciation, um, and then we have, you know, kind of the estimated, uh, uh, return is 6%. So, if you do the math, you know, if you combine both of them, you're, you know, you're up over 10%, [00:40:00] right?
But if you think about the property is from a standpoint of, you know, you're holding on to the property for, say.
Naseema: huh. Uh huh. Uh
Chris Gerardi: So on the marketplace, we'll have on the secondary market. So when they go to the secondary, the place where you can buy and sell them, um, it, it, the live feed data will show the value of the most current property.
So, like, we can get that, we know by comps, we can get that information and it feeds in and, and you may have bought those shares at 10 when the house was 360, 000 bucks. years from now maybe that that data feed is showing that that house is worth 440,000, 450,000. It will auto adjust the estimated value per share.
So it's, it would make sense. Then it's like, okay, well I can, my shares were, I paid $10 for an now worth $18 or 16. I'm just throwing numbers out there. So [00:41:00] not only were you collecting some of the rent money from it along the way. Now you have an opportunity where of regardless the, the, the, if the value of the home went up, the value of the home went up. That is what's so insanely crazy about this because that is really the piece that like solidifies the value through traditional markets. But in a way. That can be utilized digitally and in, in real time, which is crazy, really.
Naseema: Yeah. And while we're like doing like comparisons, how would this, um, how does this platform differ from like a fun rise?
Chris Gerardi: So like a Fundrise is, you know, generally speaking a lot. So Fundrise, I believe offers a couple of different things. So they offer maybe some, some regulation A [00:42:00] funds, and then they, and then, and then what we would call like Reg D funds. So Reg D is going to be like your accredited investor. So you've got to have a minimum net wealth.
You've got to have a, you know, all these things, right? And actually, we have that built into our system now, so we can offer reg D's and we can verify people's accreditation literally in seconds. It's crazy, but we can do it. And, um, and and so we just haven't offered those assets yet. But we've built out the tech to it.
So, so fundraisers can be more like, but, but you're going to have individual assets when we do that. It's not going to be like, hey, you're putting your money into a fund. Um, we're going to, we're, we're, we're going to buy gas stations with this fund. We have 25 gas stations and. Yeah, this is just a lot. It's almost like the idea of co mingling.
Right you're like, co mingling a bunch of assets into. A bowl, [00:43:00] right? And some assets are doing well in that bowl. Some aren't, you don't know for sure exactly which one, which one's a problem, which one's a good one, which one's this, and you don't get to individually pick. And I think that's, that's the thing, like people, when we created this, we were like, okay, well, we don't only want to offer them value set because you have to create a value set for people to want it.
Right, but we also wanted to create it to where it's visual Usable and frankly, maybe you're like bored at home and instead of surfing like facebook you you're like Oh, i'm gonna check out these properties and then swipe up. I mean you literally swipe. It's like done. I'm an investor I'm done shows up in your portfolio all of it.
It's it's it's wild the technology That we've created to do this.
Naseema: Does your, um, management com, is it just one singular management company that manages all the properties?
Chris Gerardi: No. So, you know, we, [00:44:00] we, like, these 1st, 1s, we've tied in with it with the management company locally.
Naseema: Mm-Hmm?
Chris Gerardi: And the reason we've done that is so, so we pay them a percent, right? So, out of that management fee, like. Really, what we end up paying most management companies is probably gonna be in the, in the realm of 5 to 6%, right?
So we might, we might take 2%. Um, at the end of the day, you know, we do it that way is, is, is we, you know, pick the, what we think is the most preferred management team to deal with it because we want to make sure that number 1, like, The rentals are taken care of. Um, they're not being, you know, we get the right renters, all these different things, right?
Because that stuff is important. We have to preserve the value of the property. That's a key fundamental piece. Um, so we have that, but whoever's managing it is in contact with one of our team members. Monthly, we know what's going on with them. We know, you know, and then that's connected to the rental fees.
We know by looking in our plat in the back [00:45:00] end. If rents are on time, we know all of that stuff.
Naseema: Do you have any rules when it comes to acquiring a property? Does it have to meet like the 2 percent rule? You know what I'm saying?
Chris Gerardi: You know, I think that I think that the biggest key is is like, so we have a team that of real estate experts that, I mean, there's like. If you look on our, uh, on our, our team page, I mean, these are people have been in this stuff for so long. Um, and really, you know, I, I, I give it to them where it's like, hey, they go and find kind of more or less.
Markets that they see are going to have value. In the future, right? Um, that doesn't necessarily mean like a market, like, maybe there's markets out there that have skyrocketed, right? They've just. They've just gone through the roof and, you know, once again. It's like, the elevator ride up is great, unless maybe the elevator ride, like, goes haywire, then, like, [00:46:00] things fly.
And when they go up real, real fast, they can have a tendency to come down super fast as well. But we're so they're already looking at, like. The different areas that we're going to be moving into currently. And, and so we'll have that stuff. Like we send out a blog, we send out emails, we keep people informed.
And, and as we go down that road, obviously we just launched a couple months ago. This has been a, a long road to get launched. Um, we will be giving people a lot more insight in those areas. And and what areas those are going to be but they will be it'll be national They'll be all over and I think that's what people ultimately are going to want in the long term
Naseema: so for a regular smegular person, labor and delivery nurse like me that wants to get invested, what would that look like? I download the Real Bricks app and then what do I do?
Chris Gerardi: Download the real bricks app just have your idea because once [00:47:00] again, we're you know, just like a bank
Naseema: Mm hmm. Mm
Chris Gerardi: Okay. That's a good thing for the users because we're audited, right? Like that's important. Um, so you download the app, you put your information in, you upload your, your ID. It literally, I'm not exaggerating is, is less than 5 minute process.
Pick a property swipe up, you connect your bank account through plaid. Everyone knows how to use plaid bank connect. Um, and you can literally invest right then and there. Within five minutes in in it'll show in your portfolio. It'll show everything. It'll keep track of everything And, and, and your dividends will go in and you'll just get a notice.
Hey, you got a dividend and it'll be there.
Naseema: So, can you automate, um, funding to this account? Can you automate your investments into this account yet? Okay,
Chris Gerardi: a lot of people are like, well, I want to put in every [00:48:00] two weeks. We are working on that. And I think we'll have that fully complete and operational Q2 2025.
Naseema: Okay. Okay. Yeah, because, you know, like, like you said, like, a lot of people, like, think like their paychecks, like, I want to just put make sure I put a 100 dollars every 2 weeks into this so that I have money available for whatever projects I want to buy. So, right now, it's just currently. You just buy, you just spend money out of your bank account.
Like, there's no, like, holding fund in there. Okay. But where did the dividends go?
Chris Gerardi: right into your, right into your, into your portfolio, and then you can, you can, you can transfer them to your, to your bank account the
Naseema: but can you hold money into your portfolio
Chris Gerardi: you can, you can leave, you can leave it all in there, and you can, you can use that to invest into other properties if you want to.
Naseema: So, you can okay, so you can put money directly.
Chris Gerardi: Oh, yeah, yep, you could do it. You could, you could put, you could put 1, 000 in it today and be like, okay, I'm going to buy 400 today and, and wait a little. Yep, absolutely.
Naseema: okay. [00:49:00] Perfect. I was a little confused about
Chris Gerardi: And if you don't want to do that, you can link your bank account. Just do it directly. Uh, I want to buy this. It'll ask you how much, uh, 500 swipe done. It pulls it directly out of your bank.
Naseema: Nice, nice, nice, but if I say, okay, yeah, I want to I want to look around. I'm a drop a 1000 dollars into my portfolio and then I'll, I'll spend that 1000 dollars across a couple of
Chris Gerardi: Yeah, exactly. And I think that's what people should do really. It's like, when you think about it, it's like just, you know, you're buying into different properties. I mean, they're all going to be a little bit different and, you know, spread it out, right? Like once again, be disciplined, invest, but diversify into different ones.
Naseema: then, like, my final questions, because. I've been in the FinTech space and, you know, um, a lot of times, you know, especially for startups, like people are hesitant to get into startups because, you know, they don't often make it. So what [00:50:00] happens with your funds in these projects, if, if, you know, real brick
Chris Gerardi: yep. Yep. So so part of regulatory compliance for us is, is we, we, anytime we put up a property, the money goes into escrow,
Naseema: Mm-Hmm.
Chris Gerardi: right? So, escrow holds the money until the thresholds met. And then it's released to our company done, right? Everyone's invested. It's all done. Yada. Yada. But if worse came to worse.
Which I don't foresee happening. Um, we, we sell the assets
Naseema: Mm-Hmm.
Chris Gerardi: that money is still going to get returned back through to the investor. And that's why when you think about this. So I don't want to go. I'll use like FTX. I mean, does everyone remember that situation? Uh, where, where people were investing in, in that platform, if they were what we call co mingling funds,
Naseema: Mm hmm.
Chris Gerardi: So [00:51:00] escrows are set up so there's no co mingling of funds. Escrows are set up through a third party company, which is regulated also. But you don't ever see that because it's just very fluid. But there's all these things that happen in the background that it's like boom, boom, boom. And that is how we stay regulated.
But essentially, they were co mingling. They were spending money in all these different places. They were borrowing money from here and doing all these things. And at the end of the day, what assets were they investing in that had tangibility? That's the key component. Right? You, you're, it takes a second to, to create, or if you build a home, that home is tangible value.
Naseema: Mm hmm.
Chris Gerardi: everything goes south, that home can still be sold. That ownership is still legally yours as interest. You legally have to be paid out on that interest. That's how it works. I mean, at the end of the day, that's why there's all these, these regulations exist because all these things have happened and unfortunately have created the need for [00:52:00] all this regulation,
Naseema: yeah, I mean, you know, that's why we have FDIC insurance and all of those kind of things just for the money in our bank accounts. So, you know, I just wanted to give people a little bit of reassurance because when navigating a different kind of investment, people don't know what protections they have, you know, um.
So I think that's important. Okay, so Chris People want to learn more about real brigs and start buying their first buying into their first property What are the steps that they take again? That's
Chris Gerardi: account. It takes five minutes and just have the discipline to follow through and do it. And you're going to be amazed. You're going to be like, this is, this is so easy, easier than ordering a frappuccino at Starbucks or some other place. I mean, literally, it is literally that easy.
People are going to be amazed at how easy this is to use. Um, and a lot of people, you know, I want to tell people too, you know You [00:53:00] don't the future is a lot of people are going to own real estate like in this fashion, right? Um, you don't have to own a physical Physically own all of it for you to be an investor, right?
Great investors invest all over in different things and that's what creates wealth And so you just have to have the discipline to take the first step But once you take the first step you get on the escalator every step after it just becomes You It just multiplies. So, um, if anyone has any questions, they can always reach out to support at real bricks.
Um, we've got a chat bot that answers most questions. If it can't, it goes directly to one of our people and, you know, we're here to, we're here to help people whatever they need.
Naseema: And I can attest to how easy the platform is to use. I haven't even signed in, but just in downloading the app, it took a couple seconds and I'm still able to without even signing in, like, browse through the properties. Look at all the things that [00:54:00] we talked about in this podcast. So, um. Check it out, it takes a couple seconds.
Just go check it out. See if it's for you ask the questions learn along the way. Like I said, if you're interested, get started with, you know, 100, a couple hundred dollars and just see if it's something that works for you. And, um, like I said, it's about. taking those first steps and learning along the way.
So I really appreciate what you're doing. I really appreciate you making real estate investing more accessible because accessibility is everything when it comes to building wealth. Yeah, of course, Chris.
Hey there I’m Naseema
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