The Landlord Exit That Beats Selling

01 /The Concept

Flock offers a retirement plan for landlords who are tired of being landlords.

Rental income is often called "passive" income – but anyone who's owned rental property knows it requires real effort. At some point, collecting checks every month still sounds great while fixing toilets at midnight does not.

Flock's answer: contribute your properties to a dedicated real estate fund that handles everything. It's easier than continuing to self-manage, and more advantageous than a straight sale – because selling just gives you cash. And then you have to figure out what to do with that cash to keep it from eroding, which is its own full-time job. The original reason these owners bought rental property in the first place was to preserve wealth – so why abandon that strategy now?

There's also a meaningful tax angle. In the US, contributing property to a fund like Flock's can be structured to defer the capital gains tax that would otherwise hit at the moment of sale. The fund uses this mechanism specifically to shield contributing owners from that tax event.

The trade-off is that owners become fund partners rather than direct property owners. But this is actually the point: they continue receiving distributions – tied to the portfolio's rental income and potentially growing with inflation – while owning nothing that requires a repair call. Their savings stay protected more reliably than cash sitting in a bank account.

That said, the partner's distributions are now based on the performance of the entire portfolio, not just their former property. So Flock has to be extremely selective about what it accepts – which is why the fund approves only 5% of property applications, cherry-picking the most durable long-term assets.

The current portfolio holds 866 homes with a combined book value of $200 million, and former owners have already received nearly $5 million in genuinely passive income. The fund targets 8–12% IRR for its partners, combining cash distributions with asset appreciation. But the non-financial benefit – not having to do anything, combined with long-term security – may be equally valuable.

Partners can track the portfolio, rental pricing, fund revenue, and their own distributions through an app that feels as transparent and intuitive as a standard banking app.

Flock has been operating since 2020 but has so far brought in property from only 150 former owners, even if the total is $200 million. Despite relatively modest current scale, the company just raised $20 million in new funding, bringing total investment to $67.7 million. Andreessen Horowitz has participated in two rounds, and J.P. Morgan and KPMG provide legal and advisory support.

02 /Why It Matters

For most people in ordinary circumstances, becoming a real estate fund partner isn't the most compelling investment move – though it's relatively safe. But today's circumstances are far from ordinary.

What's underway is what observers are calling a "great wealth transfer" – with assets worth an estimated $84 trillion expected to change hands in the US alone through 2045. These are the accumulated savings and holdings of an aging generation.

As of 2022, 51% of US businesses were owned by people over 55, and 43% by those aged 35–54. A similar distribution likely holds for rental property owners, who are often the same people who parked business earnings into real estate decades ago.

This creates a genuinely unusual window – a large, specific audience of aging property owners who may find Flock's proposition to be the optimal combination of simplicity, return, and peace of mind.

The same dynamic is playing out in small business ownership, just under different branding.

Teamshares ([related review](/review/za-2-goda-do-400-millionov-dollarov-oborota)) argues that the future of small business is employee ownership. That framing is mostly relevant to aging owners who want to offload the hassle before retirement – because if the business is genuinely good, why would you hand it over? And nobody wants a bad one anyway.

The problem is that 70% of small businesses never sell, simply because there are no buyers. Young entrepreneurs want to build their own startups – including the heirs of current owners – and running a steady but unglamorous business holds little appeal.

Teamshares addresses this by facilitating transfers to employee ownership funds. The employee stake grows from 10% to 80% over 20 years while Teamshares' share declines from 90% to 20%. The company has raised more than $200 million to support this model, though the sizes of its two 2024 rounds remain undisclosed.

Common Trust ([related review](/review/3-iz-5-jeto-ochen-bolshie-dengi)) takes a different approach – it enables an immediate 100% transfer to an employee ownership fund, funded by credit from the startup's partners. Common Trust earns from a one-time deal structuring fee plus a share of the loan repayment flow. The company raised additional funding in late 2024, though the amount also remains undisclosed.

03 /Opportunities

Buying a quality asset at a buyer-friendly price is the stuff of fantasy – unless the seller is in a situation that makes a reasonable price in their interest too.

Approaching retirement is exactly that situation. And it's arriving at scale: the overwhelming majority of today's profitable businesses and income-generating assets were created or acquired in the previous century by people who are now aging into a transition.

The moment to capitalize on this is now – by building companies that specialize in acquiring these businesses and assets. That's the directional opportunity here.

Different asset types and deal structures open up different paths, as illustrated by the examples in this review. The underlying thesis is the same across all of them: aging owners need exits, buyers with the right structure can offer better terms than the open market, and the window is open right now. The most direct entry point is residential rental property – the market is fragmented, owners are numerous, and Flock has already proved the model works. Adjacent plays in small commercial property or owner-operated businesses follow the same logic.