Skewed Property Data Sources

5 Replies

So from time to time we come across affiliates who sell our properties through their marketing platform and we have also worked with lenders in the past that have semi-desirable financing terms for either foreign buyers or US buyers where the loan is based more about the home then the borrower.  

Recently one of our affiliates has some type of system where the punch in the property address and it gives them a yes or no based on who knows what type of criteria.  What has been most fascinating is that this system they have in place is not allowing them to sell what I would view as some of our better homes in better areas but it is allowing them to sell homes that are not as good as the ones its not allowing.  I have a hard time believing that some type of program can evaluate a market better then actual market knowledge.  

Has any other turnkey providers come across anything like this?  Same thing with some of these unconventional lenders.  They rely on a program to give them a sort of walk score as opposed to actually knowing the area. 

Do you know what the source of data is? I'm a turnkey buyer and I use a data source I discovered when it was described as "proven" and a trusted source for lenders, so it may be the same tool.

Can you characterize how the score differs from your local market knowledge?

The reports I use deliver a score for a neighborhood that is intended as an indicator of rental income stability. But they also provide detail on crime (property & violent), education levels, schools, age & configuration of housing stock, owner occupancy rates, median home values, 10-year trailing appreciation and a few other factors. 

I take the score itself with a grain of salt, but I have found the detail is helpful for putting a neighborhood in context. It's only one factor in my evaluation, but it has helped me quickly identify which areas may be higher risk than I prefer.

The tool I use definitely does not consider the property itself, rehab work, quality of the property management team, etc--all of which I view as critical in addition to the neighborhood.

Originally posted by @Curt Davis :

So from time to time we come across affiliates who sell our properties through their marketing platform and we have also worked with lenders in the past that have semi-desirable financing terms for either foreign buyers or US buyers where the loan is based more about the home then the borrower.  

Recently one of our affiliates has some type of system where the punch in the property address and it gives them a yes or no based on who knows what type of criteria.  What has been most fascinating is that this system they have in place is not allowing them to sell what I would view as some of our better homes in better areas but it is allowing them to sell homes that are not as good as the ones its not allowing.  I have a hard time believing that some type of program can evaluate a market better then actual market knowledge.  

Has any other turnkey providers come across anything like this?  Same thing with some of these unconventional lenders.  They rely on a program to give them a sort of walk score as opposed to actually knowing the area. 

Yep,

I think I know what platform you're talking about.

Its gives a pretty accurate estimate on the KC market but haven't really dived into any other market.

Thanks

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

We hate spam just as much as you