How will AI Impact Multifamily Real Estate Syndication?
Artificial intelligence (AI) has the potential to significantly impact multifamily real estate investing in a number of ways. Real estate investors have historically been slow to adapt to and adopt new technologies. In the case of Artificial Intelligence, the investors who miss the boat will be leaving a lot of money on the table.
Recent years have brought incredible advancements in AI technology, particularly in the context of communications. This article is being written in 2023 – today we have real world examples of AI’s potential.
Some potential applications of AI in the context of multifamily real estate investing include…
1) Property Management
AI can be used to automate various property management tasks, such as handling tenant inquiries, scheduling maintenance, and processing rent payments. This can help property managers save time and resources, and potentially improve the overall management of the property.
Back in 2018, Google unveiled a prototype AI that was able to have a full, unscripted conversation over the phone with a human. Check out a video of this incredible feat here. When this technology is fielded and ready for commercial use, it’s going to change every aspect of customer service, including in the real estate industry.
One day, in the very near future, AI will have the ability to have full, unscripted conversations with tenants and prospective tenants, automating a key function of property management personnel.
Our AI assistants will be able to find tenants, screen calls, handle maintenance inquiries, call plumbers, book appointments, and so much more.
2) Market Analysis
AI can be used to analyze market trends and predict demand for different types of properties in different locations. This can help investors make more informed decisions about where to invest and what types of properties to target.
When selecting a market there are a number of factors real estate syndicators will consider. Here are just a few:
Economic Fundamentals: Look for markets that have strong economies and economic fundamentals, such as job growth, population growth, and a diverse economy. Additionally, consider the local housing market, including the demand for rental properties and the supply of available properties.
Rental demand: Real estate syndicators will look for markets where there is strong demand for rental properties, as this can help ensure that you are able to find tenants for your properties and generate a steady stream of rental income.
Property management & other services: Consider the availability of property management services in the market you are evaluating. Property managers are a valuable resource for executing your business plan, so it’s important to have access to reliable and professional property management services.
3) Tenant Screening:
AI can be used to analyze tenant applications and identify potential risks or red flags, such as a history of late payments, evictions, insufficient income, or other screening factors. This can help property owners more efficiently obtain new tenants and potentially reduce the risk of tenant-related issues.
Federal, State, and Local Fair Housing laws will play a key part in the progress of this technology. AI will need to be trained on the ins and outs of these laws.
4) Predictive Maintenance
AI can be used to identify potential maintenance issues before they become major problems, allowing property managers to schedule repairs proactively. This can help reduce downtime and improve the overall condition of the property.
Statistical monitoring of HVAC systems, water heaters, plumbing, electrical, roofs, and all other major systems has the potential to save significant time and money by predicting failures before they happen.
5) Deal Sourcing
Multifamily real estate investors can use artificial intelligence to automate the process of reaching out to potential sellers or brokers in several ways. One way is through the use of chatbots or virtual assistants. These AI-powered tools can be programmed to send emails or make phone calls to potential sellers or brokers on behalf of the investor.
For example, an investor could program a chatbot to send an email to a potential seller introducing themselves and expressing interest in purchasing the property. The chatbot could be programmed to ask questions about the property and request further information, such as photos or a list of amenities. The chatbot could also be programmed to follow up with the seller if a response is not received within a certain time frame.
AI Powered Lead Generation: Another way that multifamily real estate investors can use AI to automate the process of reaching out to potential sellers or brokers is by using an AI-powered lead generation tool. These tools can analyze market data and identify potential sellers or brokers who may be interested in selling or representing a multifamily property. The investor can then use the tool to send targeted emails or make phone calls to these potential sellers or brokers, introducing themselves and expressing interest in working with them.
Overall, AI can be a valuable tool for multifamily real estate investors looking to automate the process of reaching out to potential sellers or brokers. By using chatbots or virtual assistants to send emails and make phone calls, or by using AI-powered lead generation tools to identify potential sellers or brokers, investors can save time and effort and focus on evaluating and negotiating deals.
AI has the potential to increase efficiency, reduce costs, and improve the long and short term financial performance of investment properties. It is important to note that the use of AI in this context is still in the early stages, and it is likely to evolve and become more widely adopted over time.
The technology is progressing rapidly, and we can be certain that the tools in 5-10 years will be far more advanced than what is available today.
