HoneyBricks
0 USD
Strengths
- Invests in multifamily real estate
- Investment minimums as low as $1,000
- Blockchain technology in real estate can streamline the investment process
- Multiple investment strategies
Weaknesses
- New platform with a short track record
- Accredited investors only
- Must receive distributions as a stablecoin
- Individual offerings only
There are several ways to invest in crowdfunded real estate with $1,000 and get exposure to properties previously exclusive to wealthy investors. But a new platform adds transparency and simplicity to the investment process through multifamily real estate.
Eligible accredited investors can utilize HoneyBricks to invest in real estate using digital securities, which are shares that are run on blockchain technology. But how do digital securities work, and is HoneyBricks, which only launched in 2022, a trustworthy place to invest?
This HoneyBricks review fills in the essential details about this platform and lets you know how it might enhance your investment portfolio.
Table of Contents
What Is HoneyBricks?
HoneyBricks is a real estate investment platform for accredited investors. Unlike competing platforms which typically require investing at least $10,000 into private real estate deals, the minimum investment can be as low as $1,000.
In addition, unlike your run-of-the-mill crowdfunded real estate platform, you use digital securities to invest in real estate instead of paper shares. Sometimes known as ‘Tokenized real estate’, it appears to be the next investing trend, and this platform is an early adopter.
Unfortunately, HoneyBricks is a new platform currently recruiting its first investors (as of August 2022). Its first investment offerings will launch in October 2022. As a result, some will be apprehensive about investing too much until the platform can establish a track record of credible performance.
What Is Tokenized Real Estate?
Through a real estate tokenization process, HoneyBricks turns real estate value into digital securities stored on the blockchain, dividing them up into fractional values, enabling investors to own real estate digitally.
Blockchain technology is more secure than holding real estate shares in fiat currency and on paper.
It can also reduce the paperwork process to open a position and sell when that time comes. You purchase shares in the traditional way, which are then converted to digital shares that allow easier and more efficient fractional ownership through the LLC.
HoneyBricks uses the Ethereum-based Polygon network to settle transactions using digital securities and stablecoins.
Unlike first-generation cryptocurrencies like Bitcoin and Ethereum, with extremely volatile trading prices, real estate digital securities are a “second layer technology” with a consistent value tied to the property’s value and investment performance.
Additionally, tokenized ownership is regulated and authorized by the US Securities and Exchange Commission (SEC), similar to stock brokerages.
A security token provides transparency for the deal sponsor and investor. Sponsors can easily update investment values and minimize paperwork. Investors have an easier time validating their investment stake and can quickly sell their tokens to others.
Tokenized real estate can offer more opportunities to international investors who can exchange stablecoins instead of converting their funds into the local currency.
For example, when selling HoneyBricks tokens, all investors receive their distribution as the USDC stablecoin (USD Coin).
Minimum Investment Period
Two benefits of tokenized real estate are its short minimum investment period and extra liquidity. Current federal regulations require holding your tokens for at least 12 months.
After the 12-month holding period ends, you can instantly sell your tokens to other investors on a secondary market.
Not many crowdfunding platforms offer secondary trading. If they do, you may only be able to request redemptions quarterly, meaning it can take months to receive payment for your sold shares.
Like most platforms, holding for 3-5 years can provide superior returns as real estate is an alternative asset and isn’t a get-rich-quick investment idea.
Track Record
HoneyBricks started publishing their investment track record in 2023. To date, they have done seven investments with an average target IRR of 16.6% and generated a current cash yield to investors of 5.0%.
Account Options
Currently, only taxable accounts are supported. However, self-directed IRAs may be able to participate in the future.
HoneyBricks Tax Treatment
You will invest in properties through an LLC, similar to crowdfunded investments. Therefore, you will receive a year-end K-1 tax form for each investment.
Who Can Invest?
Due to current federal laws, only US and non-US-accredited investors can invest through Honeybricks. Therefore, all deals are considered private placements.
You must satisfy one of these basic requirements:
- Have an annual income exceeding $200,000 ($300,000 for joint investors) for the previous two years
- Possess a liquid net worth exceeding $1,000,000, excluding your primary residence
The platform will verify your accreditation status during the onboarding process. If you don’t meet the requirements, here are several real estate crowdfunding platforms open to non-accredited investors.
HoneyBricks Fees
Investors don’t pay any fees on the HoneyBricks platform as the company makes its money by charging fees to sponsors to use their technology and administrate investors.
How HoneyBricks Works
Here is an overview of what the HoneyBricks investment process looks like for investors.
Investment Offerings
You can expect to invest in multifamily properties across US cities that satisfy preset investment criteria such as neighborhood scores, income history, and schooling data. Specifically in the nation’s 15 biggest.
This is a popular asset class for real estate crowdfunding platforms as they have multiple tenants to provide consistent income.
This type of property is an ideal offering for large numbers of investors with low minimum investments.
Four different deal structures will determine your potential portfolio yields.
| Investment Strategy | Risk Level | Potential Yield | Key Traits |
| Core | Conservative | 5-10% | Focuses on rental income, with limited growth from property appreciation |
| Core Plus | Moderate | 8-12% | Balances income with property appreciation |
| Value Add | Moderate Aggressive | 10-14% | Emphasizes capital growth but also earns rental income |
| Opportunistic | Aggressive | 12-16% | Mainly relies on property appreciation and earns minimal income. |
These investment strategies are similar to the debt-structured (Core) and equity-structured deals (Opportunistic) that most platforms offer.
Most of the investment offerings will fall under the Core Plus and Value Add strategies, according to HoneyBricks.
Member Dashboard
After establishing an account, your member dashboard will provide the following details:
- The total value of your real estate holdings
- Number of your current property positions
- Number of shares for each investment property
- Year-to-date distributions to your custody wallet
Additional member-only features may also develop as the platform expands.
Receive Distributions
As you hold real estate securities, you will receive your dividends and sold share proceeds as either ACH or through stablecoin.
For investors using USDC, the distribution process may seem redundant if you plan to exchange your stablecoins for fiat immediately. However, this extra step is part of the digitization process to maintain financial integrity.
Secondary Trading Market
HoneyBricks offers a secondary market where investors can post sale offers for their digital securities directly with other members. Of course, all investors must observe the federally-mandated 12-month holding period.
Learning Center
You can learn more about this investment method and general real estate investing through the learning center. Much of the content can help experienced real estate investors learn how to weave tokenization into their investment process.
HoneyBricks Pros and Cons
Below is a summary of the positives and negatives of investing with HoneyBricks.
Pros
- Invests in multifamily real estate
- Investment minimums as low as $1,000
- Blockchain technology in real estate can streamline the investment process.
- Multiple investment strategies
Cons
- New platform with a short track record
- Accredited investors only
- Individual offerings only
Alternatives to HoneyBricks
Here are some other investments platforms that offer similar real estate exposure as HoneyBricks. In the case of RealtyMogul and Fundrise, you don’t have to be an accredited investor to participate.
RealtyMogul
RealtyMogul offers individual offers with a minimum investment of $10,000 or higher.
Non-accredited investors (and accredited investors) are welcome to invest in two REITs, each with a $5,000 minimum investment. One strategy focuses on growth and income (similar to Honeybricks Opportunistic and Core strategies, respectively). For more details, check out our RealtyMogul review.
Fundrise
You can dabble as little as $10 into Fundrise, which means this platform has one of the lowest investment minimums. Additionally, this platform is open to all investors, and you can begin getting exposure to specialized portfolio strategies with a $5,000 initial balance.
Accredited investors may enjoy the Premium investor service. With a minimum $100,000 initial investment, you can be invited to invest in exclusive funds and hands-on priority support.
Other platforms can be better if you invest in individual offerings instead of REITs. Get all the details in our Fundrise review.
We earn a commission from Fundrise partner links on WalletHacks.com. We are not a client of Fundrise. All opinions are my own.
HoneyBricks FAQs
Yes, HoneyBricks is a real way to invest in multifamily real estate for accredited investors. This investment method is regulated and approved by the SEC. The exchange platform allows investors to buy investment interests directly from real estate sponsors.
Blockchain-based real estate investing is a new concept but can be more transparent than traditional crowdfunding. The platform also makes it easy to trade and transfer your digital shares after the minimum 12-month holding period.
Despite just launching and opening to investors, its leadership team has invested a combined $5 billion in over 100 deals. In addition, the real estate advisors have worked with investment firms, including Blackstone and GE Capital.
HoneyBricks seeks to invest in multifamily apartments in the 15 largest cities across the United States. An investor can make money from monthly rental income and appreciating property values.
The platform offers live chat and has an online help center with short articles.
HoneyBricks Review: Summary
HoneyBricks is an intriguing new platform that uses the latest smart contract technology to make real estate investing more transparent and affordable. It is one of the first services to offer tokenized real estate to eligible investors, which can help provide attractive investment options.
While this platform is only available to accredited investors, you can invest as little as $1,000 into individual properties when similar platforms require at least $10,000 per offering. But while HoneyBricks sounds promising, the big drawback is that they are entirely unproven, having just launched in 2022.
If HoneyBricks interests you but you’re reluctant to invest because of its brief history, I recommend you start by investing small amounts of money and comparing the platform’s performance to the established competition. Or, wait on the sidelines a little longer to see how things play out.
