Denver has increasingly become a center for real estate innovation, with companies like Flock Homes leading the way. The company recently invested $2.2 million in five rental homes in Mesa and is working to expand its Phoenix portfolio, aiming to reach or exceed 1,000 homes, as stated by Flock Homes' founder, Ari Rubin, according to a recent Phoenix Business Journal report.
Flock Homes, with a nationwide presence of 855 homes valued at $187 million, is acquiring properties and providing retiring and accidental landlords with an exit strategy through the use of Section 721 of the U.S. Internal Revenue Code. Founded by Ari Rubin in 2020, the company allows homeowners to exchange real estate for ownership units in a residential real estate fund without incurring capital gains taxes. As noted by John Balitis, a partner at Radix Law, in a statement obtained by Phoenix Business Journal, this approach not only reduces taxes but also enables homeowners to retain an appreciating asset.
Meanwhile, Flock Homes has been expanding its operations and team in Phoenix. Following a recent multi-million-dollar purchase, the company now manages 10 homes in the metro area and has hired professionals from Opendoor and Progress Residential. Phoenix has been a key area for growth, and although large institutional buyers have recently slowed acquisitions, the local market continues to grow, Rubin explained to the Phoenix Business Journal.
Building on their real estate strategy, Rubin has shared that Flock Homes plans to acquire multifamily units. He emphasized that the company's mission is not solely financially motivated but focused on addressing the challenges landlords face, offering low-risk investments and peace of mind for clients. In an interview with The Denver Post, Rubin explained how they are providing solutions for capital preservation, tax deferral, and estate planning through their innovative model. With $22 million raised last month, bringing the total to nearly $50 million since the company’s founding, Flock Homes is positioned to further diversify within the real estate market.
Flock Homes has seen significant growth, collecting just over $1 million in monthly rent and generating around $10 million in revenue last year, primarily from onboarding fees. Rubin, a Harvard graduate, former investment manager, and one-time Stanford business school dropout, aims to transform the way real estate is owned and managed. He envisions a future where Flock's fund includes a wide variety of properties, from residential homes to commercial spaces, and even unique real estate such as gas stations and car washes, as he shared with The Denver Post.
