How To Invest In Real Estate | Realeflow Blog

REALEFLOW

Your Guide to Personal & Financial Freedom Through Real Estate

Artificial Intelligence: How It’s Changing The Face Of Real Estate Investing

Can Artificial Intelligence and Machine Learning really help real estate investors scale their business? Here’s what you need to know.

1-mainpic

It’s almost impossible to ignore the fact that Artificial Intelligence is everywhere and is significantly changing the ways that we, not only do business, but live our everyday lives.

Artificial Intelligence affects the ways that we communicate, the ways that we make purchases, the places that we go, and, now, the houses that we purchase.

Artificial Intelligence has now made its way into real estate in a more exciting way than anything we’ve ever seen.

What Is Artificial Intelligence?

2-WhatIsAi

In the simplest terms, Artificial Intelligence makes it possible for machines to learn from information and experience to perform tasks that would previously require human interaction.  

Computers can now be trained to process large amounts of data and recognize patterns in that data to accomplish specific tasks.

And, now, with so much data readily available, the more data that is fed to the machine, the more “intelligent” it becomes, gaining the ability to make more intelligently targeted decisions, and providing us with information that is far beyond the scope of human intelligence. 

How Has Artificial Intelligence Revolutionized Other Industries?

3-Revolutionize

If you’ve ever shopped with Amazon, Target, or any other online retailer, then you’ve seen Artificial Intelligence at work.

“Recommended” or “frequently bought together” items are examples of Artificial Intelligence pulling and analyzing data and delivering it back to you in an applicable way.

If your favorite music streaming service has ever offered up new music that you might like… Artificial Intelligence.

If Netflix has ever shown you suggestions based on your viewing history… you guessed it… Artificial Intelligence.

When Facebook recognizes your face in someone else’s photo and automatically tags you… as incredible (and maybe a little bit creepy) as that is – that is Artificial Intelligence.

Alexa can take voice commands and respond by answering a question, playing a favorite song, setting a timer, ordering goods online, and a host of other pretty incredible tasks that anyone over the age of 10 is likely impressed by.

The machines have consumed millions of data points, analyzed each one, and presented this information in a way that is relevant to you at that very moment.

In order to thrive, the machine simply needs two things – experience and direction.

What Artificial Intelligence Means For Real Estate Investors 

4-AIForRE

Artificial Intelligence has slowly been making its way into real estate over the past several years.

Real estate agents and investors have been transitioning from pen and paper, and in-person trips to the local courthouse to find leads, to software that searches a huge database of buyers and sellers and delivers the targeted lead lists that users are looking for.

You can find software that matches buyers and sellers based on their specific wants and needs, and programs that help reduce human error and speed up the closing process.

Here at Realeflow, we have recently taken things a step further with the introduction of our revolutionary new tool, Leadpipes Ai.

Before today, real estate investors have relied heavily on limited data sets to guide their decisions about which properties they should market to and invest in.

While in the decision phase, real estate agents and investors collect as much data as they can find, including the age and condition of the property, owner status, financial circumstances, and market conditions to help determine how and when the property might sell.

But, unlike machine learning and artificial intelligence, the human brain is limited to how much data it can collect and analyze. It is also limited in determining which factors affect how, and when, a property might sell.

What we’ve come to find out is that far less obvious, yet much more detailed, data points can reveal, with surprising accuracy, when a property owner is likely motivated to sell their single-family home. Before today, this would require a team of full-time data scientists and analysts, and a large amount of funding.

We took care of that part for you.

Realeflow has partnered with the leading Artificial Intelligence and machine-learning technology data scientists in Boston to build a genetic algorithm based on millions of ongoing data permutations and 40 years of real estate transactions for single-family homes in the United States of America.

As a result, we started to see just how powerful Artificial Intelligence can be for the real estate industry.

For example, we learned things like…

  • A property with a homestead exemption has less than a 1.2% chance of selling nationwide - this is 75.3% less than a property without one.

  • A property with a screened porch owned by an absentee owner is 560% more likely to sell to an investor than a property with a screened porch that is owner-occupied.

  • And, in Ohio, a property that is older than 100 years is 243% more likely to sell to an investor than a property between 2-5 years old.

The more data we fed the algorithm, the more we were able to see which characteristics affected the likelihood that a property would sell in any given area.

And, as the results continued to line up with the point in time when homeowners were selling their properties, we were able to create a scoring system for every single-family home in America that indicates the propensity for it to sell within the next 90 days.

We call this scoring system the Sellability Index.

sellability_index

The Sellability Index uses millions of data permutations and 40 years of real estate transactions to assign 3 scores to every single-family home in America.

Retail Score
Indicates the propensity that a property will sell within the next 90 days.

Wholesale Score
Indicates the propensity that a property will sell below market value within the next 90 days.

Rental Score
Indicates the propensity that a property will sell to a real estate investor in the next 90 days.

Using the most advanced tool ever created, real estate brokers, agents, and investors will now be able to utilize Artificial Intelligence and machine learning to uncover the highest quality leads for their business.

 

Next, we tested our theory…

We wanted to see for ourselves how the homeowner response rates compared between properties scored by our system and properties that were not scored by our system.

TEST CELL 1
We pulled a group of Absentee Owner leads to use as the “control” group. It’s also important to note that Absentee Owners are generally motivated to sell their property.

We called the property owners in this group and asked if they were interested to sell.

If they said yes, we documented them as “Interested To Sell” or ITS.

Results – 3.1% ITS Rate

TEST CELL 2
We pulled a list from our Retail Scored Leads group and performed the same experiment.

We called the property owners in this group and asked if they were interested to sell.

If they said yes, we documented them as “Interested To Sell” or ITS.

Results – 5.4% ITS Rate

On the surface, this may not look like a huge improvement, but it is a 74% improvement over TEST CELL 1.

Imagine what a 74% improvement to your ROI would look like for your business. 

 

TEST CELL 3
We pulled a list from our Investor Scored Leads group and performed the same experiment.

We called the property owners in this group and asked if they were interested to sell.

If they said yes, we documented them as “Interested To Sell” or ITS.

Results – 11.5% ITS Rate

This was a 113% improvement over TEST CELL 2 and a 271% improvement over TEST CELL 1! 

Screen Shot 2019-10-09 at 11.56.08 AM

Again, take a minute to envision this type of increase in your marketing efficiency and your ROI! 

We did months of intense testing before we decided to release this technology and the results are clear…

The “Sellability Index” proved that properties scored by Artificial Intelligence are far more valuable to real estate agents and investors than properties that are not scored by Artificial Intelligence. And this just scratches the surface of what Artificial Intelligence and machine learning will do for real estate investors.

Imagine having property leads organized for you, all scored and sorted by their propensity to sell within the next 90 days and focusing your marketing efforts and dollars on only those leads that scored the highest and are most motivated to sell.

What could possibly sound better? Having exclusive rights to your entire territory and being the only investor in that market with access to this Ai.

This is exactly what Realeflow has done.

We are invested in giving our users the highest probability for success and it’s impossible to ignore that Ai is the most revolutionary advancement in our industry to date.

In Conclusion…

6-EMBRACE_AI-01

The real estate industry is, and will continue to be, a data driven industry. Tens of thousands of data points directly influence how real estate investors and agents acquire qualified leads every day.

Artificial Intelligence is simply the next level, but provides data insights far beyond what the human brain can comprehend.

As a real estate investor or agent, now is the time to embrace the exciting advancements that Artificial Intelligence and machine learning have to offer the industry or fear being left behind. 

AiMoreInfoBtn

Happy investing!

SHARE THIS STORY | |

Comments