Can Adam Neumann do for residential real estate what he did for office space with WeWork? That's the question investors and real estate professionals have been asking after the announcement of Neumann's new company, called Flow, dropped in August.
Deep Pocketed Investors
Flow, scheduled to launch sometime in 2023, has already secured a $350 million investment from Silicon Valley venture capital firm Andreessen Horowitz, an early investor in companies like Airbnb and Facebook. But it's not entirely clear what Flow will actually do. What we do know is that Neumann has already bought more than 3,000 apartment units in Miami, Fort Lauderdale, Atlanta, and Nashville.
In a blog post about his Flow investment, investor Marc Andreessen mentioned the negatives of owning and renting a home, namely that homeowners tend to take out lengthy mortgages and are stuck to that location, even if their circumstances change or they want to move. Meanwhile, renters have much more mobility, have no equity in their homes, and are less likely to be invested in their communities.
“You can pay rent for decades and still own zero equity — nothing,” Andreessen said. “In a world where limited access to homeownership continues to be a driving force behind inequality and anxiety, giving renters a sense of security, community, and genuine ownership has transformative power for our society.”
An Equity Stake for Renters?
Statements like these have led investors to speculate that Flow will offer people an equity stake in their apartments while maintaining the flexibility of renting. So, what will Flow be? Timeshares? Co-ops? Layaway financing? All with access to a luxury property with community features and lots of amenities? Probably some combination of all of these elements. Perhaps, Flow will offer short-term apartments with company-provided financing and an opportunity to grow your ownership stake the longer you live there.
Got Questions? We've Got Answers
Much about Flow remains to be seen, including how it will impact traditional property rentals and sales. Real estate is always in flux, and it's difficult for the average person to keep up with all the changes. For that, you need an experienced attorney on your side.
Attorney Melvin Monachan can answer your questions about how projects like Flow might impact you and any other questions about buying, selling, or renting property. Contact us online or at (347)389-1682 to learn how we can help.
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