Started in 2020 and launched in 2021, Flock is a real estate technology company offering the retirement solution for landlords. We help owners retain all the benefits of real estate ownership without any of the burdens by offering a seamless exit to passively owning shares in a pool of houses.
No, you receive shares in an Operating Partnership which owns other rental properties. The value of the shares is tied to the appreciation and income generated from these assets.
Flock has raised more than $6 million in venture capital to date from leading investors. That being said, if the company goes bankrupt or shuts down, the pool of houses will be orderly sold off and the cash will simply be distributed out to the owners.
We launched in Denver earlier this year and plan to expand to other growth markets in Q4 2021. We’re selective with contributions to the fund, only taking houses that add value to all Flock owners. Submit your property information here and we’ll let you know if your house is currently a good fit!
Depending on how long you’ve owned your property, selling could lead to the loss of nearly 1/3 of your value to taxes, fees, and lost months’ rental income. Joining Flock allows you to avoid the taxes and hassles associated with a traditional sale.
Most owners come to Flock with a long-term vision to continue to receive income and ultimately pass their shares on to their heirs for a step-up in basis. Shares can also be redeemed for cash, either all at once or spread out over a number of years to potentially reduce tax liability. Just like a traditional sale, redeeming your shares for cash is a taxable event.
As long as you own your asset, there’s always something to worry about. While some property managers offer great service, there is no substitute for being the actual owner of the property. Flock holds title to the houses in the portfolio and operates like a long-term owner: we’re incentivized to generate the best returns for our owners, deliver our residents the best experience, and act in a way that is consistent with the long-term interests of the community and environment.
Joining Flock is similar to selling your house and buying shares of a REIT. One major difference is that when you join Flock, you avoid the tax consequences of a sale. Instead of buying shares with after-tax proceeds, you’ll preserve value through a tax-deferred exchange for shares in the diversified pool of houses.
No, you’ll own shares in a Partnership which owns every house in the Flock portfolio. You’ll no longer be tied to the performance of your individual asset or be responsible for any maintenance costs or tenant needs for the individual house.
Income is calculated based on the appreciation of all the houses and the rental income of the portfolio. As an owner with Flock, your shares will appreciate in value generally based on the appreciation of the portfolio, and your cash distributions will be based on the rental income collected (less operating expenses like insurance, property tax, maintenance reserves, etc.). For owners who contribute lower risk, historically greater appreciating assets, the cash flow from Flock typically exceeds what they were receiving prior. For owners who contribute higher risk, historically less appreciating assets, the cash flow from Flock is typically less than what they were receiving prior. Submit your property for an estimate or contact us directlyto find out more.
Flock distributes the pool’s net operating cash flow after accounting for factors such as expenses, debt service, management fees, and capital expenditures on a quarterly basis. Flock owners can elect to receive distributions or have distributions reinvested. Flock targets a 3.5% annual cash distribution yield.
Yes, if your contributed property had an unclaimed depreciation balance, you will continue to receive depreciation.
Flock charges a 1% asset management fee and an onboarding fee, comparable to the cost of a traditional sale.
Flock’s houses are valued on a quarterly basis using leading third-party appraisals, broker’s price opinions, and automated valuation models (AVMs). Flock never profits from the valuation of a house. We’ll never negotiate valuations–we created a system that is fair for everyone.
The sale of any shares will be treated like the sale of any property, meaning regular capital gains and depreciation recapture taxes apply. One of the benefits to joining Flock is the ability to spread out tax liabilities across years, which could result in lower costs over time.
Flock is excited to be a long-term owner of every property that comes into the pool. That being said, our fiduciary duty is to generate the best returns for the portfolio, and will strategically cull the portfolio if an attractive opportunity presents itself.
Your Flock stake is treated much the same as a typical rental property – your heirs will receive a step-up in basis upon inheritance. The flexibility afforded by owning shares in a pool of assets rather than one illiquid property makes Flock an attractive estate planning instrument. However, we recommend that you consult with your personal tax advisor and/or attorney to understand your own unique situation.
No. Once a property has been exchanged for partnership interest in Flock, the proceeds from its sale cannot be applied to another like-kind exchange.
Flock hopes to offer credit facilities in partnership with leading national lenders in the coming years.
Flock offers risk diversification, both from a geographic and tenant perspective. While it is impossible to predict how your Flock stake would fare compared to a traditional rental property, owning many rental properties instead of one eliminates the risk of a prolonged vacancy. This is an attractive feature to most owners.
Disclaimer: All content presented here is purely informational. It is intended information gathering only. The information presented here is not an offer to buy or sell securities or a solicitation of any offer to buy or sell securities. It is not personalized investment advice, nor should it be construed as financial, legal, or tax advice. A professional financial advisor, attorney, and/or tax professional should be consulted regarding your specific financial, legal, and/or tax situation.