“They also get their share of all the rental income, which we collect and hold back a portion for maintenance, property taxes and insurance,” Rubin said. As the portfolio appreciates in value, so do the shares. So, someone who owns a $500,000 house can sell it to Flock and get back $500,000 worth of shares in the fund. Meanwhile, the landlords then get shares in a diversified portfolio similar to a REIT, Rubin said. Once the properties come into Flock, the company owns and operates the assets. “They get to keep all the benefits of owning real estate without any of the burdens such as paying taxes or maintenance.” “Flock buys the property from the landlord, who then gets shares in this partnership which owns a bunch of houses,” Rubin explained to TechCrunch. Its typical user is a landlord of single-family homes with one to four units that doesn’t necessarily want to be rid of their investment but also doesn’t want to deal with managing it anymore.
#Flock of four series#
Historically, only institutions have been able to be part of REITs (real estate investment trust), which are made up of companies that own or finance income-producing real estate across a range of property sectors.Ī startup called Flock Homes wants to give landlords a similar ability to own shares of a portfolio that is made up of multiple properties, and it’s just raised a $26 million Series A funding round toward that effort.Īndreessen Horowitz (a16z) led the financing, which also included participation from 1Sharpe Ventures (which is led by Roofstock co-founder and chairman Gregor Watson) and Human Capital as well as existing backers Susa Ventures, Primary Venture Partners and BoxGroup.įounder Ari Rubin dropped out of business school to pursue his concept behind the startup, which went live in May 2021 with four homes in Denver, Colorado.
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