By Michael Kanaabi Dollar
Bit Bricks Limited a subsidiary of Four One Financial Services Limited founded by celebrated financial Czar and Entrepreneur Livingstone Mukasa is a new first in the local market aimed at enabling retail investors tap into the real estate investment market.
Having successfully delivered the voluntary retirement savings scheme Mazima Retirement fund and the short term savings product Mlamu, Livingstone Mukasa took off time during the Covid 19 lock down to create the concept of what is turning out to be a multi billion real estate investment scheme built on a crowd funding model.
“ According to the world bank and IMF reports, up to 70% of Ugandans invest in the real estate sector either to create retirement homes for themselves or invest in rental property however most Ugandans are limited by capital constraints at various stages of their plans and projects. This is why I came up with this model together with my team to democratise real estate investment brick by brick and bit by bit” he says.
With as low as 2 million shillings I figured out one can acquire shares in our project and if we have 100 such people 200 million in capital is raised and can then be invested in a property while individually you can not do anything substantial with 2 million in real estate.
Investing in available financial products on the market will earn you on average 10% per annum while in real estate you will earn 20% on the growth in property value and 10% in rent annually giving you a total 30% return which is much higher therefore making it more attractive although it does come with some risk that we have under control.
Starting Out
Starting out 3 months ago with their concept properly refined, a call for capital put out with in Mukasa circle of friends and acquaintances, the response was quite good as they acquired over 30 share holders and at a minimum investment by of 1.5 million shillings with each share going for 3000 shillings, over 100 million has been raised to start preliminary work on the site. This first phase closed on January 31st 2021.
Breaking Ground
With an established payment platform in mayicard and a growing network of financially inquisitive and savvy friends and followers, Mukasa said they have started moving and will be launching another call for investors come Monday the 15th of February.
“The price of each share will be up from 3000 shillings to 4000 shillings given the project has moved from concept level when we did our first capital call to now ground breaking and site preparation meaning value already has been added pushing the company’s valuation to about 4 billion shillings.
In this round we shall be offering 600,000 shares with a minimum amount of 2 million shillings for those who want to buy in” he says.
This he notes can be paid starting with 100,000 shillings to book your slot and the rest paid in monthly over 2 years. This call for capital will last 60 days and they are targeting about 70 investors by the time it closes with the next one to be announced on a later date.
Before the end of this year they project to have collected about 1 billion shillings that is enough to deliver the first phase of the project to completion which Mukasa says will be completed next year 2022.
However Mukasa notes that they are looking at a span of 4 years maximum to have completed the entire project if all goes according to schedule. The entire apartment complex will sit on half an acre with a total of 24 two bedroom apartments to be delivered on completion.
Benefits of the project
While there is accumulation of value with the share price moving from 3000 to 4000 shillings as they move into the second call for capital, the property gaining 20% in value every year and a mark up on sales of the apartments all of which is shared with the investor ensures the returns are quite good.
On the buyer’s side, apart from acquiring a home in a serene environment that will appreciate in value given its pristine location just 12 kilometres outside the city centre, the site is also ideal for people buying to let which is an added source of income through rent to the buyer.
Going Forward
Mukasa says they are already looking at other sites they can develop too with emphasis on low cost housing as they aim to democratise real estate investment and home acquisition for low income earners.
“We want to engage deeper into the low cost housing segment being able to deliver homes for the common man on the market going for prices less than 100 million in the coming years” he emphasizes.
Investors interested in buying into the project or prospective home buyers considering booking a home in this estate can contact bit Bricks Limited at their Nankulabye office, on email through bitbrickslimited@gmail.com and through their parent company Four One Financial Services Limited.
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