Data analytics for the investor

4 Replies

Hi,

I want to start out by saying that I am new at this and while I own one rental I am still a long way out to working on figuring out my next move in this real estate space.  The main thing I am trying to do is understand is where my core competences fit in with the world of real estate investing.

A better part of my day job is data analytics and database report writing and as I have started my research into real estate investing I found myself drawn to court records, property tax data, etc.  I was wondering if there is anything out there as far as options ether in data driven investing or providing data services to others (e.g. wholesalers, etc).  

@Michael Zagorsky , I just had a look at the analysis you gave 6 months ago of your own rental (your very first post). You figured right down to every cent for everything including depreciation, adding-back depreciation, minus mortgage principal reduction, all of which result in an annual $2,721.31 net free cash flow for you. Heady stuff. 

Is there such a thing as over-analyzing? But anyway, you will be in your element here at BiggerPockets. There are LOTS of resources like you are talking about.

Your future services to investors might best be drawn from your own experiences - resulting from more purchases that you have not made yet (even though you already know ALL the theory)! Cheers...

Since you are in the data business, you have an edge compared to other investors. You could provide a data service, but in the long run if you stay investing in RE you are better off keeping the competitive edge to yourself. My opinion. I've personally been faced with this three times. My members and I tried to monetize the value of the data services and in the end, we kept our systems in-house and to ourselves. There is a cost, by the way, for "productizing" your data services. Time was our biggest cost, even after automating as much as possible you'll find that getting production quality subscription services has a big commitment. My 2 cents

Thanks for the feedback.

Overall for my local county I can have a fair grasp of property records and tax records and I can likely get my hands on mortgage records (to estimate equity) and permits (to estimate major CapEx items).

I don't really have a good source of rental price or listing data other than maybe figuring out a Craigslist scrapping tool or the Zillow API (I think limited to 1,000 queries a day).  

The next question I have is what I would be able to do with this data?  I could try my hand at wholesaling but I'm not sure that's my cup of tea.  I'm wondering if raw land flipping might be a good fit.  

I am starting out so my initial thoughts are to be conservative with conventional financing, minimal leverage, or smaller dollar deals.  So maybe my first goals would be finding areas with the right balance of cash flow and appreciation and wait for a deal to show up...

@Michael Zagorsky , it looks to me as if you ARE over-analyzing, and trying to second-guess yourself. For example, isn't "raw land flipping" a LOT different to "the right balance of cash flow and appreciation"?

And are you inferring that in order to obtain "conventional financing",  you NEED to have "minimal leverage, or smaller dollar deals", (or is it just that you want to only risk mainly what you have already saved)? Does that also mean that you don't trust the results of your own analysis of potential deals? Just askin'...