[Guest Post] - Platform for Property Owners to Exchange Properties for Shares

Platform for Property Owners to Exchange Properties for Shares, Raises $26 Million in Series A Funding

Guest Author: Sana Ahmad (Click here for Real Estate Listings)

As a realtor in one of the hottest housing market, I keep a very close eye on the new trends. One of the most common question I usually get from my home buyers and investors alike is, how do I use my real estate assets for passive income? Reality shows have not made things any easier. If flipping houses was every ones cup of tea, all realtors would be at the forefront of this game. 

The other thing to consider are the regulations, which differ from state to state and type of property. A multi-family unit (such as apartments), are not the same investment model as a single family home. This is also very different from commercial investing. Some seasoned investors utilize real estate investment trust (REIT) and others use 721 Exchange to diversify their portfolio. 

With this level setting, I wanted to share a startup company that I recently came across (and I have no affiliation with them), but they seem to be addressing the complexities of investing in real estate. The company is called Flock Homes, which was founded by Ari Rubin in 2021. Ari's concept, which he tested in Colorado, was to give property owners the ability to own shares of a real-estate portfolio that is made up of multiple properties. In his own words;

“Flock buys the property from the landlord, who then gets shares in this partnership which owns a bunch of houses”. He continues to state, “They get to keep all the benefits of owning real estate without any of the burdens such as paying taxes or maintenance.”

Flock makes money by buying the properties and then also managing them. The management fee is round 1% of the value of the portfolio, somewhat similar to a managed fund. To ensure full transparency, Flock uses third-party valuation models to derive the fair-market-value (FMV) of the house. Process transparency is import to Rubin, “We’re focused on making sure the system is fair and transparent for every owner putting in their house,” he said.

Since, the company is a startup, venture capitalists have taken notice of both the hot real estate market and the business model used by Flock. These positive trends have led to Flock raising $26 Million in Series A funding from companies like Andreessen Horowitz (a16z), Human Capital, Susa Ventures and others.

Flock is not big right now, but has managed to get 110 homes in its portfolio across Denver, Austin and Kansas City. Next cities on their list are Seattle and few others this year. Flock also wants to use the latest investment to further build capabilities in their platform. I will continue to monitor their progress and provide updates, so please stay tuned here or through my social media channels.