Will AI Play a Role in Real Estate Investing?

Dear Investor,

AI is a technological advancement that is transforming a variety of industries. Writers are using AI to brainstorm article ideas. Medical professionals are using AI to help diagnose patients at a faster rate. Self-driving cars are using AI to make the roads safer. In short, AI is growing in ways to impact society for the better.

In real estate, AI has the potential to revolutionize the way we look at properties, market their value, and manage them. Real estate investing in the past has relied heavily on human intervention; however, current AI trends suggest that real estate could flourish using AI. Although it presents several benefits, there are also drawbacks to using AI in real estate.

By way of disclosure, we have an advertising relationship with Mortar Group, meaning we get paid for making this introduction and sharing this content. As always with these types of deals, consider this an introduction and not a recommendation. Every deal is unique and the responsibility to vet any and every deal you invest in still lies with you. You must be an accredited investors to invest.

How Is AI Used in Real Estate Investing?

AI tools provide an easy way for real estate agents, homeowners, and property owners to gather hundreds of data points at their fingertips. It can be used to write articles, sift data, analyze comparable properties, navigate customer and client concerns, and assist with drafting and reviewing legal documents.

This is incredibly helpful for real estate agents and investors because it makes lengthy processes more streamlined.

Market Forecasting

Marketing forecasting is a complicated part of real estate investment. According to real estate experts, the real estate cycle has four phases – recovery, expansion, hyper supply, and recession. However, timing and predicting these cycles is complicated, if not impossible.

Real estate investors often rely on their own experience and intuition to know whether to invest in a real estate market. This method comes with its own faults. Human predictions aren't always tried and true, after all, since people can't always consider all of the variables that can affect the real estate market. However, with AI tools, predicting market trends might become more formulaic. AI can analyze micro trends that predict the phase of the real estate cycle. As a result, investors may more accurately invest their money with fewer risks.

Property Valuation

Property valuation can fluctuate based on the market, the house's appearance, the neighborhood and area, and other minute details of the property. This can make the process of valuing property lengthy and inefficient.

AI tools can streamline this process with machine learning to better predict patterns. This gives AI the power to analyze historical sales data and the property's characteristics to make accurate property valuations. Appraisers may then take this AI-generated data and use it to simplify the valuation process.

Strategy Development

AI has often been praised for its ability to analyze vast amounts of data in just a few seconds. It can take a pool of data and identify patterns that might take the human eye hours to notice. By streamlining this process, it may be easier for investors to create strategies based on market trends and economic indicators.

In addition, AI tools use machine learning to adapt and change over time. This is essential for strategy development because it allows for constant change and learning. As the AI tool becomes more aware of old and emerging trends, it can continuously apply this data to give the best results.

Passive Investing With AI Risk-management

AI is still a fairly new addition to many areas of real estate. Some people may still be skeptical about the benefits that AI offers. In addition, it poses new risks that property owners might not be willing to take. However, AI in real estate offers enough benefits that we expect to see it used more and more over time.

Ask Mortar Group about how they are using AI in their real estate syndications.

As a reminder, feel free to view Mortar's most recent offering for Newtown Flats - a New York based, Cash-Flowing Value Add offering.

Newtown Flats is a multifamily Value-Add offering that is cash flowing at acquisition. Mortar is providing this opportunity to investors to take advantage of the current interest rate environment by targeting underpriced assets located in some of New York's best neighborhoods. Newtown Flats is projected to deliver a high 130.95% Cash on Cash Return at exit, with a quarterly distribution targeting over 7% in the first year. Mortar believes these opportunities represent some of the highest risk-adjusted returns in the current environment. View the Newtown Flats offering here.

Mortar believes in experience and smarter real estate investing. Their fully integrated in-house design, development, and asset management expertise has resulted in dozens of successful privately syndicated deals. This, combined with skin-in-the-game co-investments and in-depth local neighborhood knowledge, helps them mitigate risk and maximize investor returns. Focused opportunities combined with an intimate knowledge of New York's prime niche neighborhoods allows investors to diversify and deploy capital conservatively in projects and divest risk throughout the real estate lifecycle.

Mortar Group extends White Coat Investors access to exclusive opportunities on new offerings. If you would like to know more, please visit their website, or reach out to Investment Relations Manager – Francesca Gaccione at 646-559-9471, or gaccione@mortargroup.com.

Learn more about Mortar Group today!

Jim and Brett

James M. Dahle, MD, FACEP
Founder, The White Coat Investor

Brett Stevens, MB
COO, The White Coat Investor

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