Everything You Need to Know About Flock, All in One Place

721 exchange refers to Section 721 of the US Internal Revenue Code, the same tax code that stipulates the commonly utilized Section 1031 (also known as the 1031 exchange). Section 721 was established in 1954 and has been used for decades by institutional investors to minimize taxes on real estate. Flock Homes has pioneered a platform that empowers individual landlords to access the same benefits of the 721 exchange. See our 721 exchange page for more details.

No. Once you join Flock, title of your properties is transferred over to the Fund and you now own equity in Flock’s diversified Fund. As a result, you retain all of the benefits of real estate ownership, including access to cash flow and appreciation potential. However, you do not hold liability for managing any singular property.

Flock’s Fund accepts single-family and multifamily rental properties. All rental properties that join Flock’s Fund must meet our financial return requirements. Properties with lower mortgage balances (generally, less than 50% of the property’s value) are more likely to be accepted into the Fund. To see if yours qualifies, click here to submit valuation for an evaluation and our team will connect with you to discuss your valuation.

With your ownership in Flock’s Fund, you have the ability to access cash flow from the rental income collected from the Fund's portfolio of properties, and you continue benefitting from potential real estate appreciation based on the price performance of the properties in Flock's Fund. You also transition into a fully passive approach to real estate investing, which has given Flock clients back countless hours of time and invaluable peace of mind. All operations of the properties in Flock’s fund, including leasing, repairs, HOA dues, property management fees, and operating expenses are fully managed by our team of professionals.

The 721 exchange allows you to defer substantial capital gains and depreciation recapture taxes you might otherwise trigger in a traditional sale of property. Following the minimum hold period, you can also access greater cash flow quarterly and better control your tax liability by liquidating Flock equity over time. Finally, Flock equity also benefits from a step-up in tax basis upon inheritance which can provide your heirs significant tax savings when they choose to liquidate their equity. We recommend you consult with your tax advisor, attorney, and/or the IRS website to understand how Flock can complement your personalized tax planning.

The Flock Homes team encompasses decades of investment and management experience from the largest real estate institutions in the world, including State Street Global Advisors, and Progress Residential, and has used their expertise to help many clients retire from real estate through Flock Homes. Learn more about the team here.

View our Performance page to understand more about how Flock's Fund has performed.

Yes. While Flock's Fund is not currently subject to full SEC registration requirements due to an applicable exemption, Flock is nevertheless regulated by the SEC and subject to the rules for private Fund advisors. Flock also files a Form D annually. You can find our filings on the SEC’s website.

A good property manager can offer some relief from your rentals, but as long as you hold title, you are financially and legally liable. This includes small items like vacancies, repairs, and evictions, but also big items like large renovations and disasters. By having ownership in Flock's Fund, your risk is diversified across hundreds of institutionally managed properties, you’re not liable for any single property. Our team manages everything, including leasing, repairs, and HOA dues, for every property in the Fund. Because we are accountable to the long-term performance of the Fund’s properties, our incentives are also closely aligned with yours.

Depending on your ownership history, you could trigger thousands in capital gains and depreciation recapture taxes when you sell your rental properties. Instead of buying shares of a REIT and investing with significantly reduced after-tax proceeds, Flock Homes allows you to earn from a Fund with tax-advantaged proceeds. The difference in returns can be substantial. Furthermore, Flock's Fund is purpose-built for long-term-oriented, retiring investors. Our platform also provides unparalleled reporting transparency. If you’d like an assessment of your estimated Flock returns, submit a rental address, and one of Flock's Exchange Directors can provide you with a complimentary evaluation and a demo.

Flock Homes operates all properties in the Fund as long-term rentals. We have a local team in every market where we own properties, complemented by in-house and third party property managers that we actively manage. We believe local, responsive, and knowledgeable property management delivers the best experience for residents, the community, and ultimately, the Fund clients.

The Fund’s value is refreshed every quarter using a combination of automated valuation models (AVMs) and third-party appraisers. Every property in the Fund is required to be appraised by a third party appraiser once every 24 months.

Flock's goal is to own and operate properties on a long-term basis as rentals. That being said, our fiduciary duty is to generate the best returns for the Fund and its investors, and from time to time, we will strategically reposition individual assets to optimize Fund performance. In these situations, Flock Homes has historically utilized 1031 exchanges where possible to preserve tax efficiency for clients.

Yes. Flock Homes can accept properties that are occupied or vacant. If the property is occupied, we will honor the existing lease and work with the resident to renew once the lease expires.

Yes. Flock Homes can acquire properties with outstanding mortgages, however, properties with lower mortgage balances (generally, less than 50% of the property’s value) are more likely to surpass Flock's acquisition criteria for the Fund. At close, Flock Homes pays off your existing mortgage with your lender, and the value of Flock equity you receive will be tied to the remaining value of your equity.

While we are not a cash buyer, we do offer limited cash at close on a case-by-case basis. Cash at close, however, has tax considerations that clients should discuss with their tax advisor. Submit a rental address for an evaluation and a Flock Exchange Director will connect with you to discuss available options.

Flock Homes charges investors two simple fees: a one-time onboarding fee of 6% and an ongoing annual management fee of 1%. The onboarding fee is deducted from the value of your received equity in Flock's Fund, and the ongoing management fee is collected from the net operating income of the Fund. Investors typically do not need to separately provide cash to transact or own with Flock. Unlike many other Funds, Flock does not charge a performance fee. Read our Fee Document for more information on our fees.

The title of each rental property is transferred to Flock's Fund, of which you are now an investor. After closing, we will perform necessary value-add renovations, repairs, or maintenance to maximize long-term earning potential. We continue to lease them out as long-term rental properties.

Cash flow is paid quarterly. You can receive it as cash or equity in the Fund. Historically, cash received by investors in Flock has also benefitted from favorable tax advantages.

Upon joining Flock's Fund, you will gain access to your personalized online Client Portal, where you will have full detailed reporting on your financial performance. You also gain full visibility into the Fund’s financials and real-time asset-level activity, such as individual leasing, renovations, and more. To preview the portal, click here to submit your rental address for an evaluation and one of Flock's Exchange Directors can provide you with a complimentary demo.

Yes. If your exchanged property had an unclaimed depreciation balance, you will continue to receive an allocation of depreciation consistent with Fund practices and tax guidance.

After a minimum hold period, your equity can be redeemed for cash directly with Flock, subject to the terms and conditions of the Fund documents. Your equity can be redeemed all at once or spread out over a number of years to reduce potential tax liability. Just like selling investment properties, redeeming your equity for cash can be a taxable event.

Yes, with significant tax advantages. Like a traditional rental property, Flock equity ownership benefits from a step-up in tax basis upon inheritance, which can grant your heirs substantial tax savings when they eventually liquidate. Additionally, the flexibility afforded by owning equity in Flock's Fund rather than one illiquid property makes Flock an attractive estate planning instrument. However, we recommend you consult with your tax advisor, attorney, and/or the IRS website for personalized advice on your situation.