A New Breed of Cash Cow

Today’s featured startup is reinventing how asset-rich, time-poor owners cash out.

May 24, 2025

Flock is offering a retirement plan for people who currently make their living renting out properties they bought years ago.

While rental income is often described as “passive,” it still requires some effort — which becomes increasingly unappealing with age and financial security. But the desire to receive money every month? That never really goes away.

That’s where Flock steps in. The startup offers property owners a way to transfer their real estate into a specially created fund that handles all the management. It’s easier than continuing to self-manage and more financially sound than simply selling off the property.

Why more financially sound? Because selling only gives you cash — and figuring out how to preserve that cash from inflation is a whole new problem to solve. Many of these owners bought property in the first place to protect their earnings, not to liquidate them. So why would they suddenly switch strategies?

Plus, U.S. tax law allows property owners to contribute real estate to such funds without triggering capital gains tax on the appreciated value — and Flock takes full advantage of this, shielding contributors from an immediate tax hit.

Of course, in exchange, the property owner becomes a partner in the fund. But that’s actually the whole point! They continue to earn rental income — potentially indexed to inflation — meaning their savings are better protected than plain old cash in a bank account.

There’s a caveat though: payouts aren’t tied to the rental income from their specific property anymore. Instead, they receive returns from the entire portfolio’s profits, minus the fund’s fees. That means Flock has to be extremely selective with the properties it accepts — and it is, approving only 5% of submissions to ensure long-term stability.

Currently, the fund holds 866 homes with a combined value of $200 million and has already paid out nearly $5 million in truly passive income to its former owners.

The fund’s target return for partners is 8–12% IRR. That includes both direct cash payouts and the appreciation of the fund’s underlying assets. But just as important for these former property owners — now fund partners — is the peace of mind that comes from doing absolutely nothing.

They can track the portfolio, rent prices, fund revenues, and their own payouts through an app that’s just as intuitive and transparent as a typical banking app.

Flock has been operating since 2020, but so far has only accepted real estate from 150 former owners — albeit to the tune of $200 million in assets.

Despite these modest numbers, the startup recently raised another $20 million, bringing its total funding to $67.7 million. Notably, venture heavyweight Andreessen Horowitz has backed the company in two rounds, and legal and consulting support comes from none other than J.P. Morgan and KPMG.

What’s the Gist?

For the average person, becoming a partner in a real estate fund isn’t typically the most attractive investment — though it’s relatively safe. But the current moment? It’s far from typical.

We’re now entering what’s being dubbed a “Great Wealth Transfer,” during which assets worth $84 trillion are expected to change hands in the U.S. by 2045. That’s real money and real assets currently owned by people entering their twilight years.

As of 2022, 51% of American companies were owned by people over 55, and another 43% by those aged 35–54. Unsurprisingly, the rental property market shows a similar pattern — these were the same people who bought property as a safe haven for their business earnings.

That’s why this particular moment is so unusual — and why aging property owners might see Flock’s offer as the best combination of simplicity, security, and financial sense.

Naturally, something similar is happening in the world of small business — the quiet buying-out of profitable companies from their aging owners. It’s just marketed with slightly different slogans.

Take Teamshares, which claims that the future of small business lies in handing over ownership to employees. Of course, this only makes sense for aging business owners looking to offload the headache of management before retirement. After all, if the business is truly good, why sell it? And if it’s bad, nobody wants it anyway.

The problem? Around 70% of small businesses can’t be sold — because there’s simply no buyer. Young entrepreneurs would rather launch their own startups, including the heirs of aging owners, who typically want nothing to do with boring (even if profitable) operations.

So Teamshares helps owners transfer their business to employees by setting up a dedicated fund that takes over ownership. Employees become partners in this fund.

Ownership passes through Teamshares itself, which earns revenue from managing the transition. The employees’ stake grows from 10% to 80% over 20 years, while Teamshares’ share shrinks from 90% to 20%.

So far, Teamshares has raised more than $200 million — though the details of its 2024 rounds are still undisclosed.

There’s also Common Trust, which facilitates business transfers to employees via similar structures. The main difference? It enables full employee ownership right from the start.

To do that, the employee fund takes out a loan from Common Trust’s partners to immediately pay the original owner. The startup earns money through one-time deal setup fees and a share of loan repayments.

As of fall 2024 — post-review — Common Trust also raised a new funding round, though the amount remains undisclosed.

Key Takeaways

Scoring a high-quality asset at a buyer-friendly price is usually the stuff of fiction — unless the seller is in a unique position that forces them to let go at a fair valuation.

Aging into retirement is exactly that kind of situation. It’s now unfolding at full scale: most of today’s profitable businesses were built in the 20th century by people who also bought up solid assets.

And now is the time to take full advantage of this — by building companies that specialize in acquiring those assets and businesses. That’s the real opportunity on the table.

You can focus on different types of assets and adopt various deal structures — just like the ones featured in this review. The only question is: which kind of asset, and which structure, will you go after?

Company info:

Flock

Website: https://flockhomes.com/
Last funding round: $20 million, 13.05.2025
Total funds raised: $67.7 million after 6 rounds