How has technology helped your investments?

Question

No matter the industry, behind every successful business, there's is a proven effective system. You can't mention the concept of systems without mentioning technology. Automation is the most powerful tool businesses could harness and with so many platforms and technologies to leverage there are many ways to achieve a level of automation to streamline processes. This is truer today than ever before in Real Estate.

What technologies and or platforms are you using to automate your processes and make them less manual? How are you using this technology and how has it impacted your investing process?

Joe Villeneuve · Answer

I designed my own software to do all the analysis for markets, properties, offers, applications of strategies, strategies themselves, and how they all come together in a REI Plan with long and short term financial goals specific to the REI.

Marc Winter · Answer

@Joe Villeneuve, that's quite an accomplishment!  I'm happy to be able to use Buildium for management, MLS and tax role databases for my research and offer making.  But I still enjoy getting out and inspecting properties on a daily basis.

Joe Villeneuve · Answer

The data isn't that complex.  It's just numbers with $ in front and others with street names behind.  The program does the compiling and organizing...based on my system.

The first thing my Mentor Students ask when they get the program (and their homework assignment for it) is "can the data entry be automated?"  the answer is yes, but I choose not to make it so.  I input manually because this way I learn about the markets I invest in (or don't).  There are things you see when you manually input, that you wouldn't if you automated it.  We live in an age of "shortcuts" and mistake it for efficiency.  Efficiency has nothing directly to do with speed of the "process".  It has everything to do with the speed gained from the results due to less waste..  Efficiency is when you gain maximum output for any given input.  Many times, speed that's applied in the wrong way or the wrong time makes you less efficient.

Franky Aikens · Answer

@Joe Villeneuve

Amazing! Sounds like you utilize sizable data sets. How do you import the data inputs for analysis? Is that part automated to extract from the data source or do you import the data manually? Do you compile the data in batches then upload for analysis?

Joe Villeneuve · Answer

I'll try to describe them from about 30k feet.

First Package is my Market Analysis Software.  It analyzes the properties for sale, properties sold and properties for rent.  It groups all the common properties in tight sq ft ranges, and only analyzes one range at a time.  Then it maps the properties out, and looks for areas (micro-markets) where the entrance (4 sale) overlaps the exits (sold and/or rentals) and combines them to define the micro-markets where profits and cash flow can be made based on the minimum profits and/or cash flow required.

Second Packages are based on projecting the financial requirements needed over time and at specific timelines in the REI Plan (the 3rd Package) using a number of different strategies (alone and combined) to achieve the criteria dictated by that REI Plan.  There are a number of different analysis programs because there are a number of different strategies and combinations of strategies that need to be analyzed.

Third Package is the REI Plan Software.  Using real properties, you can proactively design a plan based on a series of steps using different markets and strategies for each set of steps,...all leading to accomplishing a predetermined set of financial goals.  First you use it to design the plan, then you use it to execute that plan.

All three packages work together because all three of the knowledge bases the software(s) were designed for must work together in order to be successful.

I started designing them as simple forms about 6 - 7 years ago, and they seem to have taken on a life of their own.

Franky Aikens · Answer

@Joe Villeneuve that’s pretty remarkable. How long did it take you to development the software? Has it been evolving over time.

What are the outputs it provides to help you make investment decisions?

Hope you don’t mind the follow up questions. Just really intrigued.

Joe Villeneuve · Answer

The main reason I developed it was for my own use to help me do complicated, repetitive tasks.  It started off as a form for doing market analysis, then took on a life of its own.  Now it's over 5 different software packages...still with the same original purpose, but with the added one of using it when I teach my program.  It makes it easier to explain things by showing what is actually happening from the start to the finish.

I'm toying with the idea of developing general access to use it but without the training on the "how's" and "why's" to use it, I'd be afraid the user wouldn't get much use out of it, and be a waste of their time and money.  Since my students get that training as part of the program, and I use it to teach it, they get the software too.

Back a number of years ago, when it was in its infancy (no, maybe its "teen years"), I was offered a large amount of money for it...but I was still developing it, and wanted to still be able to use it...and improve it.  I'm still using it, improving it, and adding to it as I come up with needs and wants for it "to do" through my use of it.

The design of it is very specific to how I analyze and invest, applied to specific ways to use money (strategies) that I developed into a system and/or a series/combination of systems around my basic system of REI.  It's nothing like the typical ways using the typical strategies used for the last ##(?) of years.  I developed them to solve problems we constantly find when we are doing REI.  I like it, but then they are like my "children" now.

Franky Aikens · Answer

@Joe Villeneuve that is pretty impressive! Will this software always be for your proprietary use or will you roll it out as a product one day?

Joe Villeneuve · Answer

I got tired of all the existing tech not giving me everything I needed, the way I needed/wanted it, so...

How has technology helped your investments?

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