Konfidis SFR Homes Portfolio Fund

Introducing a unique model for investing in a portfolio of Single Family Rental (SFR) homes.


Why is Brightspark presenting a real estate investment?

Our mission is to democratize access to unique investment products – such as Venture Capital – that are usually reserved for institutions, or that have high barriers to entry.

When we surveyed investors in our network about what they would like to see from us, Real Estate was at the top of the list of other alternative assets that were of interest.

We are presenting an innovative Real Estate fund from one of our trusted partners, Konfidis. The fund brings together Konfidis' real estate expertise and technology platform; together with Brightspark's fund management and oversight expertise. We believe the fund, structured in a manner similar to our VC funds, is a good complement to VC tech investments in a well-balanced portfolio. 

Just as Brightspark VC funds bring a unique approach to VC investing, this fund brings a unique approach to Real Estate investing.

Read more on the blog

Democratizing access to a portfolio of private real estate

The Konfidis Single Family Rental (SFR) Homes Portfolio Fund will invest in multiple single-family homes in mid-sized cities in Ontario. 

What's unique about investing in Real Estate through this fund?

  • Access a portfolio of the coveted Single Family Rental asset class (not accessible through Canadian REITs)
  • Focuses on 5-year capital appreciation and is incentivized for success
  • Fully managed: asset selection, tenant management, repairs, sales, and more
  • Access the asset class without impacting your credit or affecting your borrowing capabilities
  • Superior asset selection at scale made possible with Konfidis' proprietary technology 
  • Ontario’s mid-sized city housing market is a stable asset class, with compelling supply & demand fundamentals and growth trends.
  • Low investment minimum of C$50,000

Fund Strategy

The fund will buy Single-Family Rental homes, rent the homes to generate rental income as they appreciate in value, and sell them at the fund’s 5-year term maturity.

  • Target fund size: $3M to $8M
  • Assets: Single-Family Rental detached houses 
  • Geography: Southwestern Ontario secondary cities with high-growth potential
  • Return and maturity: 9-12%+ targeted net Annual Recurring Revenue 
  • Rental income from properties is expected to pay for all fund operations
  • Loan against the fund expected to match fund size allowing capital gains to be double growth


    The Experts Behind the Fund

    Konfidis Inc. is a leading property technology and real estate service firm focused on enabling investor access to the sought after Canadian Single Family Rental asset class. Konfidis’ technology platform has been developed and refined over a decade and supported by double-digit million dollars of investment. 

    Konfidis is proud to trailblaze investor access to Single Family Rental homes and support alternative and professionally managed housing solutions for Canadian families. Konfidis benefits from the active support and utilization of infrastructure and expertise of its strategic partner, FirePower Capital.

    Konfidis manages every step of the real estate operations.

    Acquisition

    Sourcing and buying properties, legals, inspection, and appraisals

    Maintenance

    Insurance, renovations, and repairs

    Rental

    Tenant sourcing, leasing agreement, and payment management

    Sale

    Sourcing buyers, negotiations, legals, and closing

    Big Data to Generate Alpha


    Konfidis's proprietary technology allows for efficient evaluation of the 40K+ active MLS listings, analyzing 100+ million data points in real-time to provide actionable financial projections.

    Combined with a human layer of local, experienced real estate professionals, this system enables the fund to pick cities, neighbourhoods and properties positioned for the best risk-adjusted return potential.

    FAQS

    This investment is only available to accredited investors, the minimum investment is C$50,000.

    Yes - the portfolio of homes is financed in part by a loan provided by a Canadian leader financial institution. The Senior Loan is structured as an interest-only instrument bearing an estimated annualized fixed interest rate of 3.95% (current market pricing; subject to change). The initial principal amount available under the loan facility shall be up to 50% of the value of the home portfolio, representing matching dollars from investors. The Fund’s equity is junior to this loan.

    The initial fund term is 5 years, with an option for two 12-month extension periods. Invested capital and associated net profits are expected to be returned to investors at the end of the term as the portfolio of homes is sold. Net proceeds from the sales of properties will be returned to investors after repayment of the senior debt.

    Investors in this fund should not expect to receive any dividends or distributions from the rental income. The rental income from the properties is expected to cover all of the fees and expenses of the fund (property operating expenses, debt interest expense, fund expenses, and capital expenditure reserves).

    Investors in this fund should not expect to receive any dividends or distributions from the rental income. The rental income from the properties is expected to cover all of the fees and expenses of the fund (property operating expenses, debt interest expense, fund expenses, and capital expenditure reserves). 

    This model means that as an investor, more of your initial capital is invested in properties rather than being used as management fees. 

    Total one-time setup fees and expenses paid by the Fund upon closing are anticipated to represent approximately $50K, taken from the Fund’s initial capital. Note that the Fund will also reserve approximately 2% of capital raised for initial working capital in advance of rental income collection. 

    As the houses are acquired and leased, the rental income is expected to cover all other fees and expenses of the Fund. 

    Carry (profit sharing): 

    • 5% investor preferred return (with a full General Partnership catch-up)

    • After investors are repaid their initial investment and preferred return, the General Partners shall earn a 20% carried interest (split 50/50 between Konfidis and Brightspark).

    Details of fees and expenses are available in the offering documents. 

    There are several risk factors, and as such this fund is only suitable for those investors who can afford to lose their entire investments. Such risk factors include:

    • Increased interest rates could affect buyer demand (although we are considering a fixed-interest lending solution to mitigate rising interest rate risk on the balance sheet)

    • Not enough supply (lack of resources development) to meet demand

    • Vacancy and turnover rate are subject to a high degree of uncertainty

    • Risks inherent in ownership of real estate; unexpected costs

    • Competitive environment (tenant, and buyers/sellers)

    • Local market conditions could change and affect portfolio performance

    A detailed risk disclosure is available in the full offering documents. 

      Target properties:

      • Primarily detached single-family homes with compelling rental characteristics located in neighbourhoods with strong supply and demand fundamentals
      • Selective detached multi-unit non-conforming properties (two-four units)
      • Average purchase price of ~$500,000-700,000; purchase price will vary by city
      • Geographic Focus: Fast-growing secondary cities surrounding the Greater Toronto Area

      Konfidis’s cutting-edge technology and comprehensive data management, combined with a network of experienced local realtors enables the managers to identify properties with attractive risk-adjusted return rental and price appreciation profiles, in top markets with the compelling supply and demand fundamentals to generate outperformance.

      We are here to help - you can reach our team at invest@brightspark.com

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