Real Estate and Analytics

[Garret Gallo]

Hello, my name is Garret Gallo.

To start off, I am not trying to sell you anything or push a product. Rather, my goal is to gather feedback and opinions on an aspect of the real estate industry that I have been doing research on, specifically in the areas of multifamily, apartment, and commercial.

From what I have seen, only about 25% of RE companies use modern BI and Analytics technologies. Here are a few friction points I keep seeing:

• One of the biggest challenges I see is not the data tools themselves, but the
  data cleansing and transformation work required before those tools can
  become assets. Many teams know about platforms like Power BI, but often
  don’t have the time, staff, or internal infrastructure to support them.

• Additionally, I noticed a lot of teams still very much rely on Excel. While it
  can still be a very powerful tool in a lot of use cases, the main issue is that
  the manual work required doesn’t scale as portfolios grow.

• There are plenty of property management platforms like Yardi or AppFolio,
  but they seem to struggle to go past basic reporting. Exporting your own
  data, cross-referencing with external sources, or building more advanced
  analytics seems to be either too expensive or cumbersome.

• Overall, compared to other industries, real estate seems to be slower to
  adopt new technologies compared to other sectors.

These are just some observations I’ve noticed, so please feel free to add your own thoughts. Do you find any similar pain points within your business, and would these be high on your priority list to solve?

[Richard F.]

Quote from @Ryan D.:

 It's not that RE is slow or unsophisticated. There's just too much at stake to move fast and break things.

So True! I've worked for several different companies that were managing 100's of units, and they decided to change their accounting software applications. Several months of dual entries and manual comparisons of resulting reports, it was a nightmare!

Another reality on the 1 - 100 analogy, many of the Mom & Pop investors don't know or care about IRR's, ROI's, NPV's, and other metrics. They only want to know how much the NET rental check will be each month, and how soon will they get it. I literally completed 3 of the 4 CCIM courses, and tried discussing/educating existing Clients (some of whom had 50 plus unit complexes), but their eyes just glazed over, and they had no interest in those details. They were seeing great cash flow and were perfectly happy.