MIRIS does things differently
We need to start at the very beginning and tell you how construction projects usually work. Spoiler alert: They’re pretty inefficient.
How the construction process has changed over time
Traditionally, real estate development has been a very expensive and inefficient process, where the planning process often overlooked crucial steps, which would cause expensive delays and errors down the line. That’s why only the very experienced would succeed.
Since the rise of technology and computer-aided designs (CAD), the construction landscape has benefited greatly. Project managers can spot potential challenges ahead of time and plan accordingly to avoid problems later. This was just the beginning though, in recent years with the rise of BIM, VR and digital twin technologies, managing construction has become even more accurate.
Today, Miris starts each of their projects with a building information model (BIM). A BIM is a type of 3D architectural model that encompasses every last detail of the finished building, down to the individual make of lightbulbs that go into the building as well as the handles on the cupboard doors and each screw and nail that will be used to hold parts of the building together. These models are extremely complicated and can take months or even years to complete.
You must be thinking “Isn’t this a waste of time seeing as the majority of existing buildings were made with people in construction hats holding up pieces of paper?” The “measure twice, cut once” concept applies just as much to a multimillion-dollar construction site as it does to your DIY picture framing job. Back in the days of people with hardhats and paper plans, millions of dollars were wasted due to unforeseen underestimations or lack of planning.
In today’s construction projects, we simply can’t afford to lose money to lack of planning, so the magic of BIM is that we can simulate many more factors ahead of time to make sure they don’t become costly mistakes down the line.
Planning can minimise Co2 production
We’re also able to simulate the entire supply chain requirement for the building, like how many trucks can arrive at the same time without causing traffic on the construction site, how much Co2 the trucks create while hanging around on the site unnecessarily. These are all factors that weren’t that important in the past but have become the priority in the current world.
Each sustainable project is built with a specific CO2 budget, for the building to become carbon neutral we must keep within that budget, this even impacts the sort of materials that can be used on the project, as the manufacturing process behind certain materials generates a lot of CO2 that we can't afford.
What does this all mean for my investment?
Thanks to the excruciating detail that goes into creating the BIM to help mitigate unforeseen problems down the line, it also makes it much easier to measure progress on the project.
For example, every single piece of work that needs to take place to get the project from a concept to reality can be mapped out ahead of time and turned into bite-sized tasks. These tasks are given to contractors to complete.
The interesting thing is that because the construction is managed with MIRIS X, the same platform used to raise the funding for the project, the contractors can be paid for each task they complete, instantly. The benefit for the suppliers is they don’t have to wait till the end of the month to be paid, they are paid as soon as they mark off a task as complete and it’s verified by the project manager. The benefit for MIRIS is when tasks are completed, it means progress is taking place and we can track progress as it happens and report this to the investor on their dashboard.
Then there’s the loan to value ratio
The other benefit is all projects are developed with a specific loan to value ratio, this means a project can't raise infinite funding if it is not progressing.
For example, if a construction project has just kicked off and the land it’s being built on is worth €1m if the loan to value ratio MIRIS needs to stick to is 75%, this means MIRIS can only raise €750k worth of funding upfront.
With this money, construction can be kicked off and work can be paid for. After a week, an independent evaluator will visit the site and estimate the liquidation value of the work completed, let’s say in the first week of construction the contractors were able to lay the foundation, the entire project is worth more than just the land alone, it will now be worth the value of the land + the value of the foundation, the entire project is now evaluated at €1.5m, this then allows MIRIS to raise €1.125m to keep within the 75% loan to value ratio.
This is for protection of investors’ funds, knowing that if something goes wrong the project can be liquidated with enough money to repay the investors.
How often is progress tracked?
The project will be audited and revalued every week by an independent third party.
All of this information will be visible to investors via the MIRIS X platform, keeping things transparent and keeping the investors updated through the entire construction lifecycle.
Although this is by no means the easiest way to build projects, it’s currently the most efficient and sustainable way to do it. And we think that’s worth the effort.