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Redwood Trust (RWT) Invests in Rental Ownership Platform Flock

Redwood Trust (RWT) invests in a real estate technology start-up, Flock, in order to bank on disruptive real estate technology for its target audience.

This story originally appeared on Zacks

In a bid to align its positive long-term view on disruptive real estate technology, Redwood Trust, Inc. RWT recently announced an investment in Flock Homes, a real estate technology start-up, which enhances rental ownership experience for individuals. The optimization will be done via Flock integrated platform that smoothly and tax-efficiently turns owners into passive investors.

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The investment was successfully made through Redwood's RWT Horizons venture arm.

Through Flock’s technology-induced platform, individual rental property owners will be able to exchange property for shares in a professionally-managed portfolio of homes, without incurring any taxable events. By owning the portfolio handled by Flock, owners will be able to obtain a steady income, diversify risks as well as muster liquidity without inconveniences surrounding the conventional ownership of properties. Flock utilizes the 721 Exchange, formalized by the Internal Revenue Code, and is the first company offering this solution to the owners of individual rental properties.

Ryan McBride, chief investment officer of RWT Horizons, remarked that Flock “have developed a highly innovative business model that directly applies to a massive subset of the multi-trillion-dollar single family rental market — Flock has the potential to revolutionize the way rental properties are owned by small and mid-size landlords.  We are impressed at Flock's initial success in the greater Denver market and look forward to their expansion into other markets across the U.S. in 2022."

Ari Rubin, founder and CEO of Flock said, "We're thrilled to partner with Redwood. Our investment philosophies and industry views are aligned, and we're equally as passionate about transforming the rental ownership landscape. Their investment is of meaningful strategic value to Flock's growth. Being able to leverage Redwood's BPL marketing infrastructure and vast network of relationships will help support and expand our future product development. Redwood's deep expertise is a tailwind to our platform's development and greater mission — to create more value and better experiences for owners, renters, and communities alike."

Shares of this Zacks Rank #1 (Strong Buy) company have gained 26.2% in the past six months, as against 0.3% decline recorded by the industry.

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