Risk Disclosure
What can go wrong when you buy a real estate bond.
Please read this before you invest.
The short version
You can lose money, including everything you put in. Interest is not guaranteed. You may not be able to sell early. Only invest money you can afford to lose.
What you are buying
You are buying a bond — a loan to the company that owns a property. You are not buying the property, and you do not own a share of it. In return for the loan, the bond pays interest on a set schedule and repays its face value when it matures.
Because it is a loan and not ownership, you do not gain when the property rises in value. Your best case is that you receive every interest payment and get your money back at the end.
The main risks
You can lose your money
If the borrower cannot repay and the property is worth less than the debt against it, you may get back only part of your money, or none of it. These bonds are not bank deposits. They are not insured by the FDIC or any government guarantee scheme.
Interest payments can stop
Interest comes from the property's income. If tenants leave, stop paying, or the property runs at a loss, payments can be reduced, delayed, or stopped entirely. A stated interest rate is what the bond promises to pay, not a guarantee that it will.
Your money may be locked up
These bonds are not traded on a public exchange. Selling before maturity depends on finding a buyer, which may take a long time or may not be possible at all. Plan on holding the bond for its full term.
Other companies are involved
Bonds are issued by licensed partner institutions, and investor funds are held by independent regulated trustees. If any of those companies — or BondBricks itself — runs into financial trouble, your investment can be affected.
Everything rides on one property
Each bond is backed by a specific property. Damage, empty units, a legal dispute, or a downturn in that one location affects you directly. Spreading money across several bonds reduces this, but does not remove it.
Rates, taxes, and rules change
When interest rates rise, a fixed-rate bond becomes less attractive and harder to sell. Tax treatment depends on your situation and can change. Changes to property or securities rules can also affect your investment.
Before you invest
- Read the offering documents for the specific bond.
- Ask yourself whether you could still meet your everyday costs if this money did not come back.
- Consider talking to a licensed financial adviser, accountant, or attorney. Nothing on this site is personal financial advice.
- Only invest money you can afford to lose.