{"id":185770,"date":"2025-11-21T13:40:30","date_gmt":"2025-11-21T20:40:30","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=185770"},"modified":"2025-11-21T13:40:59","modified_gmt":"2025-11-21T20:40:59","slug":"can-real-estate-save-you-from-ai-related-unemployment","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/can-real-estate-save-you-from-ai-related-unemployment","title":{"rendered":"Can Real Estate Save You From AI-Related Unemployment?"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Worried that artificial intelligence (AI) will replace lower- and middle-income jobs, and only create wealth for business owners?&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Billionaire <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/qz.com\/ray-dalio-economy-income-inequality\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Ray Dalio argues<\/span><\/a><span data-preserver-spaces=\"true\"> that AI is making the bottom 60% of Americans more dependent on the top 1% to keep the economy afloat. He notes that 60% of Americans can\u2019t even read at a sixth-grade level\u2014how could they hope to compete in our increasingly knowledge-based economy?&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Early warning signs only fuel these fears. A worrying <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.jpmorgan.com\/insights\/global-research\/artificial-intelligence\/ai-impact-job-growth\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">report by J.P. Morgan<\/span><\/a><span data-preserver-spaces=\"true\"> notes the high unemployment rate among recent college graduates and weak job growth in many white-collar careers that AI can replicate.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">What about real estate? How AI-resilient is income from real estate, both active and passive?&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">AI-Resilient Real Estate Business Models<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">There are dozens of <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/eight-niche-real-estate-investments-outperforming-in-2025\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">niches in real estate investing<\/span><\/a><span data-preserver-spaces=\"true\">, most <\/span><span data-preserver-spaces=\"true\">under no threat of replacement by AI.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Flipping houses<\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">No software can flip a house from start to finish. Think of the steps involved:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">Marketing to connect with off-market distressed sellers<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Person-to-person sales to convince the owner to sell at a bargain price<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Assessing repairs and estimating costs and profits<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Financing arrangements<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Filing permits<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Interviewing, hiring, and managing contractors, and overseeing repairs<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Working with human inspectors to sign off on repairs and approve permit completions<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Listing, staging, and marketing the property for sale<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Negotiating terms with buyers<\/span><\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/guides\/how-to-flip-houses\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">House flippers<\/span><\/a><span data-preserver-spaces=\"true\"> know there\u2019s more to it than that, like coordinating with bank inspectors to release escrowed draws, and a dozen other mini-steps.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Flipping houses is a business, whether you do it full-time or part-time. While AI tools might help streamline individual tasks in that business, <\/span><span data-preserver-spaces=\"true\">it<\/span><span data-preserver-spaces=\"true\"> can\u2019t run the entire thing.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Rental investing<\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Some rental investors effectively flip houses to themselves, refinancing them and keeping them as rentals (the <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/guides\/brrrr-method\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">BRRRR strategy<\/span><\/a><span data-preserver-spaces=\"true\">). It takes <\/span><span data-preserver-spaces=\"true\">just as many<\/span><span data-preserver-spaces=\"true\"> steps as outlined above.<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">But even investors who buy turnkey rentals have to go through plenty of steps that AI can\u2019t <\/span><span data-preserver-spaces=\"true\">do for them, from financing to inspections to use and occupancy permits.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Again, AI tools might help here and there, but rental investing is a side hustle business. Anyone who tells you it\u2019s completely passive is selling something.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Wholesaling<\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Sure, wholesaling real estate involves fewer steps. But it still requires human-to-human sales and negotiation.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Aside from evaluating the property and its repair costs, you need to convince the owner to sell at a discounted price. And you need to build a network of buyers who know, like, and trust you.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">It\u2019s a fundamentally human business model, and AI tools can only take you so far.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Flipping land<\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">You can automate more of the marketing and sales for flipping land. Unlike flipping houses, this is more of a paper business, where you don\u2019t actually visit most land parcels, and there\u2019s no physical renovation or construction.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Even so, it\u2019s a business\u2014and AI can\u2019t run an entire <\/span><span data-preserver-spaces=\"true\">business<\/span><span data-preserver-spaces=\"true\">. <\/span><span data-preserver-spaces=\"true\">Leverage AI to automate as much of the business as possible, while you <\/span><span data-preserver-spaces=\"true\">simply<\/span><span data-preserver-spaces=\"true\"> make the final decisions and handle negotiations.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">AI-Proof Passive Investments<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Not everyone wants to replace their active income by starting a real estate business. <\/span><span data-preserver-spaces=\"true\">Some people (like me) <\/span><span data-preserver-spaces=\"true\">just<\/span><span data-preserver-spaces=\"true\"> want to invest passively and earn <\/span><span data-preserver-spaces=\"true\">strong<\/span><span data-preserver-spaces=\"true\"> returns.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Private partnerships<\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Passive investors can <\/span><span data-preserver-spaces=\"true\">simply<\/span><span data-preserver-spaces=\"true\"> partner with real estate operators.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">For example, our co-investing club partnered with a house flipper last year. We funded a series of flips in exchange for a cut of the profits. Likewise, we\u2019ve partnered with a spec home developer to build a handful of single-family homes.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">We <\/span><span data-preserver-spaces=\"true\">simply<\/span><span data-preserver-spaces=\"true\"> invested as <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/why-our-team-is-passively-investing-with-private-partnerships\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">silent partners<\/span><\/a><span data-preserver-spaces=\"true\"> in these real estate businesses\u2019 deals.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Real estate syndications<\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Our co-investing club also invests passively in syndications, where we effectively become<\/span><span data-preserver-spaces=\"true\"> a <\/span><span data-preserver-spaces=\"true\">partial <\/span><span data-preserver-spaces=\"true\">owner in<\/span><span data-preserver-spaces=\"true\"> a large real estate project.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">The same principle applies: They\u2019re running a real estate investment business, buying apartment complexes, industrial properties, or mobile home parks, and we\u2019re simply investing passively in individual properties.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Because we invest together, we can each put in less money, $5K apiece instead of the typical $50K to $100K required.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Real estate funds<\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Last month, our club invested in a land flipping fund. <\/span><span data-preserver-spaces=\"true\">The operator flips about 50 land parcels each year, with an average hold <\/span><span data-preserver-spaces=\"true\">time of <\/span><span data-preserver-spaces=\"true\">around 4.5 months. He can\u2019t use bank loans for these raw land flips, so he raises money privately from people like us\u2014and pays a consistent 16% return in the form of quarterly distributions.&nbsp;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Private notes<\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Alternatively, you can lend money privately through a secured note at a fixed interest rate.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">We\u2019ve lent money before on secured notes paying 10% to 16%, secured with a lien against real property. Again, the borrowers run real estate investing businesses that <\/span><span data-preserver-spaces=\"true\">can\u2019t be replaced by a chatbot<\/span><span data-preserver-spaces=\"true\">, and we\u2019re simply funding the properties.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Intrinsic Protections<\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Real estate is, well, real. It\u2019s physical, existing in the real world. To build, renovate, show, sell, or lease requires flesh-and-blood people.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Then there\u2019s demand. Real estate has intrinsic value: People need physical places to live, eat, and produce things. To some extent, they also want places to shop and work in person, too.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">That doesn\u2019t mean AI can\u2019t or won\u2019t be a <\/span><span data-preserver-spaces=\"true\">useful<\/span><span data-preserver-spaces=\"true\"> tool for people working in the real estate industry. But AI can\u2019t run an entire business, swing hammers, or walk prospects through a property and pitch them on it convincingly.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">Real estate will always require humans, and that will increasingly make it an AI-resilient refuge for entrepreneurs and investors.&nbsp;<\/span><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><span data-preserver-spaces=\"true\">If you believe AI is a net threat to employees and a net gain for entrepreneurs and investors, become one of the latter. And there\u2019s no more AI-resilient industry <\/span><span data-preserver-spaces=\"true\">to do so<\/span><span data-preserver-spaces=\"true\"> than real estate.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Worried that artificial intelligence (AI) will replace lower- and middle-income jobs, and only create wealth for business owners?&nbsp; Billionaire Ray Dalio argues that AI is making the bottom 60% of [&hellip;]<\/p>\n","protected":false},"author":158586,"featured_media":182477,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[],"class_list":["post-185770","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-trends"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/185770","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/158586"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=185770"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/185770\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/182477"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=185770"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=185770"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=185770"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}