July 24, 2024

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Brazilian creates fund to invest in house demolition and construction in US in 9 months

Brazilian creates fund to invest in house demolition and construction in US in 9 months

Anyone who has seen the show Irmãos à Obra is used to seeing the conditions of many houses in America: old and dangerous buildings, made of wood, usually in need of very expensive work. Brazilian businessman João Vianna saw this scenario as an opportunity to create Invisto, which buys old houses in the North American real estate market and invests in tearing them all down.

In a conversation with a reporter from It’s moneyViana, who already has experience in the real estate market by building a loft, explained that he saw 2022 as an opportunity to deliver a scalable business, such as demolishing old homes and building new ones.

“The average age of the inventory of homes available for sale in the United States is about 43 years. If you take a brick house here in Brazil, it’s a good age, but in the US 94% is made of wood, so this useful life is very short. “It ends up being faster and cheaper to build a new house than to renovate it,” he explains.

In addition to Vienna, the company’s partners are Victor Magalhas (former CEO and ex-CRO of Loft), and Rafael Repovas (founder of Joy Living).

Currently, around 55 homes are ready and 100 homes are expected to be sold by mid-2025.

Aiming for a 60% profit margin, it has a fund of USD 60 million to finance the construction of new homes in the US. The fund’s approximately 100 Brazilian and foreign investors should receive their first income by June 2025. The average annual return is 18% in dollars per year.

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A house takes an average of 9 months from foundation to 100% completion. Watch the video of building a house in a few months:

Constructions focus on primary areas

Once this market was identified, the company focused on mapping the areas with the greatest potential for property valuation. Research and data collection was undertaken to identify key areas such as nearby quality schools, parks and businesses. Taking all this into account, the cities of Orlando and Winter Park in Florida received the first investments.

By the end of this year, another fund is set to be launched, this time worth US$150 million. The difference is a study of a new market: the city of Tampa, Florida. Investment is for large investors and family offices, with private advisors looking after the high net worth. The process of attracting new investors is carried out by the fund.

Another market difference is the minimum investment allocation. In the first fund, this amount was US$500,000 per investor. The idea is to lower the entry value and increase the number of investors to reach USD 150 million.

Older customers and millennials

Although the North American real estate market will slow in 2024, two profiles are still keeping the market hot, especially in the Florida region: seniors and millennials. Another important factor for the region’s growth is the high tax incentives for companies establishing in Florida.

“They used to be looking for smaller homes after their kids left home, and the southern United States because it’s a warmer region. Millennials challenged the idea that they would be the generation that didn’t buy homes, and now they do,” he says.