AI Underwriting: What’s working and what’s not?

Question

Curious to hear from people who’ve actually used AI-assisted tools for underwriting on what’s your experience been?

What have the real pros been for you? Speed, catching things you’d miss, something else?

And for the cons where does it fall short, or where do you still not trust it?

Separately: if you had access to an actual investment analyst (not just a tool) who personally reviewed every broker OM, built the full model, and added independent market research with a 48-hour turnaround,  would that interest you? Trying to get a sense of whether that’s something people would actually want.

Joseph Cacciapaglia · Answer

Several of my clients are using AI tools for their underwriting. I think it's great for providing neighborhood stats and digging up interesting info about an area, but so far most tools seem terrible at actually comping properties or estimating rehab budgets or rents. I've had to bring clients back to reality on quite a few deals that their AI tools thought were a slam dunk. At the moment, I think it's good as a second look or testing assumptions, but I'm not ready to use any that I've seen as a primary deal sourcing or underwriting method.

I think the biggest problem that AI faces is where it's getting the data it's being trained on. The vast majority of real estate "information" online is actually marketing fluff. I've seen several tools just regurgitate the marketing claims of real estate agents, wholesalers, and turnkey companies in many markets. Just about every tool I've seen people use is providing too rosy a picture for my taste.

Nate Marshall · Answer

It is amazing when someone has the background and materials aka library to power the intelligence behind it.