Flock is a real estate company that offers rental property owners a tax-deferred transition to passive ownership in a pool of houses. Launched in 2019, Flock is focused on eliminating the hassle, reducing the risk, and lowering the cost of ownership.
Depending on how long you’ve owned your house and how much it has appreciated in value, selling your house could cost you nearly 1/3 of its listed value. Joining Flock allows you to avoid the depreciation recapture and capital gains taxes associated with a sale. You can hold on to your shares, redeem them over the years to spread out your tax liability, or pass them on to your heirs just like a typical rental property.
Flock offers fully passive, institutional-caliber ownership in a diversified pool of houses. You would never put a huge chunk of your savings in one stock, and we believe you shouldn’t do it with your house. You’ll never be reliant on one tenant or one market again.
No, you’ll own a piece of every house in Flock. When you join, you’ll exchange your house for shares in the Flock Investment Partnership, which owns the houses everyone contributed. You’ll no longer be responsible for any maintenance costs or tenant needs for the individual house, and will now receive the rental income from all the houses in the pool (minus expenses).
With Flock, you can spread out your risk and undergo a tax-free transition to passive ownership. While some property managers offer “full-service management,” as long as you own your asset, there’s always the risk of vacancy or something to worry about. Our professional asset management team takes care of everything, making Flock the first solution to offer entirely passive ownership, diversified income, and price appreciation.
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.
Rental property income is determined by the amount of income collected and an owner’s costs. With Flock, we achieve better operating margins than a typical “mom-and-pop owner” because we use our scale to drive down the cost of ownership. Your exact income from Flock may change depending on the risk-profile of your contributed property. Submit your property for an estimate or contact us directly to find out more.
Flock charges a 1% asset management fee and a liquidity fee, comparable to the cost of a traditional sale, when you want to exit.
Flock’s houses are valued on a monthly basis using leading third-party appraisals, broker’s price opinion, and automated valuation models (AVMs). Flock never profits from the valuation of a house. We’ll never negotiate valuations–we just created a system that is fair for everyone.
The sale of any shares will be treated like the sale of any rental 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 over a series of years, which could result in lower costs over time.
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 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 is building partnerships with leading national lenders to offer credit facilities starting in 2021.
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.