Flock Homes | Exchange your rental property for shares in a portfolio

Investing in real estate digitally is on the rise, and it’s giving investors (and would-be investors) more options than ever. Crowdfunded deals (also known as real estate syndication) reached an all-time high after the pandemic, representing $15 billion in 2020 (up from $7 billion in 2019). Notably, this was for online syndications — not necessarily traditional, offline syndications. Offline syndications dropped by 15% in 2020, while online syndications increased. And it doesn’t show signs of slowing down. The real estate crowdfunding market is estimated to increase at a compound annual growth rate (CAGR) of 58.3% from 2020 to 2027.

What is Flock Homes?

Flock Homes converts individual rental properties into fully-passive, diversified shares in a pool of houses. It helps rental property owners retire from being landlords. The company offers a low-cost, tax-advantaged, hassle-free way to get and keep all the benefits of owning rental properties without any of the burdens. The company was founded in 2020 and is headquartered in Denver, Colorado. They are currently active in Colorado, Kansas, Missouri, North Carolina, Texas, and Washington.

They are on the mission to create a long-running way to possess homes aiming to provide better financial freedom to the owner, preferred living for inhabitants, and better value to the community. The company is backed by Andreessen Horowitz, Human Capital, 1Sharpe, Redwood Trust, Primary Ventures, and Susa Ventures. They currently accept Single Family Rentals (including duplexes, triplexes, and fourplexes) in Colorado, Kansas, Missouri, North Carolina, Texas, and Washington.

Flock distributes the portfolio’s net operating cash flow after accounting for factors such as expenses, debt service, management fees, and capital expenditures every quarter. Flock owners can elect to receive distributions or have distributions reinvested. It targets a 3.0% annual cash distribution yield. Also, it charges a 1% asset management fee and an onboarding fee, comparable to the cost of a traditional sale. The sale of any shares will be treated as the sale of any property, meaning regular capital gains and depreciation recapture taxes apply. One of the benefits of joining Flock is the ability to spread out tax liabilities across years, which could result in lower costs over time.

Generate best returns

Let the company know about the property and they sought to give one a final offer in 24 hours. If one accepts the offer then flockhomes will take ownership of the property and will receive the shares in their managed portfolios without triggering taxes. One can get a chance to relax and enjoy the benefits of passive income, diversification, and deferred taxes. Depending on how long one has owned the property, selling could lead to the loss of nearly 1/3 of the value to taxes, fees, and lost months’ rental income.

Joining Flock allows one to avoid the taxes and hassles associated with a traditional sale. It holds title to the houses in the portfolio and operates like a long-term owner: they've incentivized to generate the best returns for their owners, deliver their residents the best experience, and act in a way that is consistent with the long-term interests of the community and environment. Flock is excited to be a long-term owner of every property that joins the portfolio. That being said, their fiduciary duty is to generate the best returns for the portfolio, and they will strategically cull the portfolio if an attractive opportunity presents itself.

Fisher investments and FlockHomes have Unlike many money managers who sell cookie-cutter portfolios, they tailor portfolios according to everybody's needs and demands by a deep understanding of one's situation, goals, and needs. Both the companies don’t sell high-commission investment products and earn no commissions on trades. They charge one simple, straightforward fee. 

Visit their website here.