How has big data impacted your real estate investing?

Question

How has big data and new technology impacted the way that you invest in real estate?

Omar Khan · Answer

Account Closed RE as an industry is a decade or two behind the curve. Even sophisticated folks rely, at best, on databases like CoStar and REIS which hardly provide any big data analytics. Especially on this site, you'd be hard pressed to find users of true big data and supported applications.

What did you have in mind? Would love to know how you're using it.

Ray Johnson · Answer

Account Closed regarding the industry being in the use of these types of tools, additionally on BP where many investors will go through an entire asset investment cycle from research, acquisition, operations, and disposition without ever dropping anything in an IRR template would give new meaning to the often used term here on BP "Analysis Paralysis".

Personally for me the closest I get to using Big data is looking at the different ways companies are packaging the information on mortgage origination reports, I like to see how investors are buying on the debt side to make the numbers work. Even looking at the way something so simple as mortgage origination data is compiled and disseminated is problematic for the RE industry. I'm sure the G-Analytics farm has this information but at what cost and user implementation level does it become a viable product.

Jessie, the question I have for you is, How has big data and new technology impacted the way you invest? How do you plan on using it in the future?

Trevor Ewen · Answer

Account Closed

To the point about REI being a little behind on tech. I get more use out of big data in other investment categories, which provides a nice baseline for the kind of returns I should expect on real estate, before it's too much effort.

Granted, there are a million opportunities out there. One of the hardest challenges in my experience is how un-structured many of the richest data opportunities are (county foreclosure lists, auctions, for sale by owner, etc.).

Omar Khan · Answer

Account Closed Data sets are incomplete outside of NYC and coastal markets. That makes it hard to use a lot of these services with any sort of confidence. Most folks on these forums are priced out of the markets I have mentioned and prefer to invest in the South or Midwest.

Unlike a REIT,  the level of sophistication is lower as the investor are more mom-and-pop type. Even now, most syndicators/PE groups are relying on rudimentary data sources/data sets to draw conclusions. This is very much a "stick your thumb in the air and hope for the best" type approach.

I looked at a few companies who shall remain nameless who are promising AI/big data/machine learning/buzzword-of-the-moment but nothing really stood out.

Your company looks interesting. Simple question: How would your service help folks like myself buying 100-200 unit multifamily assets in TX and FL?

Ray Johnson · Answer

Account Closed I'm following up on the question regarding How big data has helped your REIT Compound? I've looked through your website GetCompound.com extensively, it looks like your team is well connected and has access to a vast information pool, How is this access setting Compound apart from your competitors?

Account Closed · Answer

@Ray Johnson great question -- we research and select the best available third-party real estate technology  providers and enter into exclusive relationships to create tech-enabled funds which give us a unique competitive edge designed to enhance returns to investors.

Account Closed · Answer

@Omar Khan great points. I was asking more about residential real estate -- should have clarified.  I've been in the REIT space for a long time and there hasn't been much innovation on the data front in resi real estate. There are a lot of new companies like cherre and reonomy. Curious how they've directly impacted people's real estate investing decisions.

Matthew Perry · Answer

We have put a ton of money into core infrastructure to figure out where we should be looking. First of all, I am a data nut. Give me report after report and I will read them all day every day, and I am shocked when people are so quick dismiss even one little data point. With all that said we have spent a ton of money for data looking at foreclosure rates, banking rates, where jobs are being created, where jobs are losing out, where schools are seeing rapid raises in enrollment, where governments at the local levels have been tax friendlier, where inventory on the open pubic markets are not meeting demand, and house transactions. It is a lot of information without question, but I want to go to the places that have problems that can be solved with spending a little amount of time. I also like investing in places where few others are. From there we can drill down and know what to target, how to target, and perhaps most importantly when to target. I'd rather be twenty minutes early to the party, then get there as everyone else is, or worse five minutes late. It is hard because everybody wants to throw out wide nets, and there is a part investing that is about throwing out a wide net to focus on retention, but when he got tired of the stage we moved up to a whole other level. We been call one of our interns Big Data, because of how much he loves to dissect and disseminate all the points in a cogent thought report for someone to read.

Brookshire Harris · Answer

Hi guys,

I was drawn to this discussion as I'm new to the Real Estate industry but I'm diving into the Wholesaling arena.  Since I have a strong background in IT, my first question was how are the current wholesalers making the most out of the data to maximize success.  I hear a few people say "Data is King" but I'm seeing little action or results by way of truly utilizing Big Data.  I think there is a huge opportunity here and I'm a little surprised that it's not a stronger topic of conversation.  That said, I would like to explore a path to using Big Data (and even visual data tools like Tableau/QlikView) to disrupt this market....

Does anyone have any proofs of concepts or any Lessons Learned to share?

How has big data impacted your real estate investing?

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