What We Know So Far About Flow, Adam Neumann’s Real Estate Startup

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Real property investing has absolutely caught up with the wheeling and dealing usually linked to the tech world — a degree confirmed by the current nine-figure funding of a brand new actual property startup headed by a infamous bad-boy entrepreneur by a well known enterprise capitalist.

Adam Neumann is the previous WeWork CEO who stepped down in 2019 attributable to inside stress after a failed IPO launch. While he nonetheless owns 10% of the corporate he c-founded, he’s on to completely different ventures nowadays: Flow.

The exact particulars of Flow stay a thriller to most, however the individuals concerned have launched some clues and reporters have been busy digging up particulars. The most important goal appears clear. The firm will doubtlessly give renters the flexibility to do one thing beforehand reserved for owners: earn fairness.

Here’s what we learn about Flow to date.

The Short Version

  • Flow is an actual property startup based by Adam Neumann seeking to provide group residing to lots of of 1000’s of renters throughout the nation.
  • Flow remains to be shrouded in secrecy, however renters could get the prospect to spend money on their very own leases, rising their fairness.
  • Neumann has a historical past within the startup market, and whereas it’s a profitable historical past, it’s additionally a controversial one.
  • Neumann has acquired $350 million in funding to date for Flow, which at the moment has a $1 billion valuation.

Flow’s Founder Has a Checkered Past

In order to totally perceive the potential behind Flow, buyers want to know its creator: Adam Neumann. Neumann is an eccentric entrepreneur — many could know him from his interview with The Washington Post the place he declared he would change into the “world’s first trillionaire.”

Aside from his exuberant character, Neumann is finest often known as the creator and CEO of WeWork, a startup that provides customers entry to coworking areas everywhere in the nation for a month-to-month subscription price. WeWork was set to go public and had an implied worth of $47 billion. However, amidst allegations of a poisonous work tradition and Neumann’s private spending, WeWork’s IPO launch was delayed and Neumann stepped down.

WeWork’s location in Tokyo/Shutterstock

It was later reported by WeWork staff that Neumann usually used firm funds to check out private aspect tasks. He was famous to have a lavish life-style together with non-public jets and a number of luxurious houses. Neumann additionally confronted criticism when he purchased the trademark “We” after which bought it again to the corporate for $5.9 million.

Unfortunately, Neumann’s famous points don’t cease on the entrepreneurial degree. Back In 2018, WeWork was concerned in a sexual harassment lawsuit with a former worker. She claimed that in her preliminary firm interview, Neumann repeatedly “plied” her with tequila photographs. Once she bought the job, she reported that the corporate was dwelling to an “entitled, frat-boy tradition” that in the end led to her sexual assault.

Neumann’s unstable fame and antics are what in the end led to his ousting at WeWork. In reality, Neumann’s fall from WeWork impressed an Apple TV present, aptly referred to as WeCrashed, starring Jared Leto.

Since then, Neumann and his spouse, Rebekah, have spent their time ramping up for his or her subsequent massive enterprise: Flow. While the precise particulars of Flow are principally being saved beneath lock and key till the corporate’s official launch, there are just a few particulars that potential buyers ought to know.

 

Flow Is Already Stocked And Funded

Adam and Rebekah Neumann

After leaving WeWork, Neumann and his spouse acquired a $1.7 billion payout and have spent nearly all of their time touring with their household.

He has additionally picked up actual property properties across the U.S. From New York to California to Florida, his nearly 4,000 properties are reported to be price a complete of $1 billion. These properties are prone to be the premise for Flow.

Since saying the thought for Flow in August 2022, the corporate has secured $350 million in funding from main enterprise capitalist agency, Andreessen Horowitz. Additionally, Flow already has a valuation of $1 billion.

Neumann’s actual property empire might be huge. Flow plans to function 1000’s of residences comprised of Neumann’s actual property holdings. These properties might be in main cities like Atlanta, Nashville, Miami, and Fort Lauderdale.

Flow’s Aim Is to Address the National Housing Crisis

Flow has an formidable aim: To be a “direct strike” in opposition to the housing disaster within the U.S, in line with Marc Andreessen, co-founder of Andreessen Horowitz, in a publish saying the funding.

He writes:

“In a world the place restricted entry to homeownership continues to be a driving power behind inequality and anxiousness, giving renters a way of safety, group, and real possession has transformative energy for our society.”

The aim, at the very least partially, is to place extra energy into the arms of renters and allow them to spend money on their very own rental items.

In the assertion, Flow is described as a “community-driven, experience-centric service with the most recent know-how…the place renters obtain the advantages of householders.” It’s nonetheless unclear what precisely this implies, however Neumann clearly has distant employees as a goal demo, simply as he did when creating WeWork.

Read extra >>> Rent to Own – A Home Buying Option With No Down Payment Required

Crypto Might Be Involved

There’s additionally one other facet to Flow that hasn’t been absolutely uncovered but. There’s hypothesis that crypto might make an look. A Bloomberg report hinted, with the assistance of nameless sources, that Flow could incorporate crypto into some type of rewards program. Additionally, the report signifies that Flow could embrace a digital pockets that may deal with this crypto.

Still, there are not any definitive statements from Neumann or Andressen Horowitz on what precisely Flow’s marketing strategy is. What is obvious to most, nevertheless, is the truth that Flow gained’t be the primary firm with this community-based construction. In reality, Neumann himself invested in one other firm that has eerily comparable objectives.

Flow Keeps Close Company With Its Potential Competitors

WeWork and Flow aren’t the one startups Adam Neumann is related to. In reality, he’s invested in 49 startups along with his household fund. In 2020 after which once more in 2022, Neumann invested particularly in Alfred, a rental administration software program startup. He nonetheless owns 10% of the corporate however gave up phrases from his investments that will ultimately have given him majority proprietor standing. Forbes reported just lately that he’s since stepped away from the corporate.

According to Forbes, Alfred and Flow share some similarities. Both deal with providing technologically superior rental properties that need to present a community-centric attraction. Two of Neumann’s appointed board members additionally stepped away. Sources have been cited as saying that “they may quickly work on a mission with the potential to compete with Alfred.” However, a spokesperson for Neumann has stated that Flow gained’t compete in opposition to Alfred.

Flow Demonstrates a New Trend in Real Estate Investing

Flow and Neumann’s former funding, Alfred demonstrates that actual property investing is altering quickly. Over the final decade, actual property crowdfunding, fractional possession, and REITs have helped diversify the actual property investing market. Investors produce other choices moreover shopping for a property outright and renting it out to common tenants.

Just as Flow is about to in some way flip renters into buyers within the properties, different corporations have risen as much as degree the enjoying discipline for renters.

The Brooklyn-based startup Up&Up, for instance, has put a twist on conventional property leases. Properties — principally single-family houses — are rented out, and tenants are given the choice to place apart two months’ price of hire in a Up&Up Wallet.

This pockets continues to develop, providing potential income. As your own home’s worth will increase, your Wallet grows as a landlord’s would. You can select to money out the top of your lease or put these funds in the direction of a down cost on the rental you’re residing in.

The rise of actual property corporations like these is clearly right here to remain, and that’s as a result of all sorts of buyers wish to get within the sport. A examine by PwC and the Urban Land Institute, factors to a want for various actual property funding choices which are inclusive of low-level buyers.

Related >>> How to Invest in Real Estate With Little Money  

The Bottom Line

From the crumbs of data they’ve dropped, Adam Neumann’s new actual property enterprise sounds prefer it could possibly be a daring thought for this technology of actual property buyers. And with $350 million in capital and 1000’s of properties of their portfolio, they’ve bought a promising head begin.

Despite that, it’s tough to know if the corporate has the potential for fulfillment. Neumann has a sophisticated and controversial historical past. And the sector is stacked with rivals. Without a lot to go on for potential buyers simply but, we’ll simply need to glide to till we discover out extra about Flow’s future.

Real property has by no means been extra thrilling. Here’s why >>> 

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