Investors can take advantage of the fact that the real estate industry was one of the last to adopt technology by using it to their advantage and practically making millions of dollars today. When compared to other industries in terms of how much technology has disrupted them, real estate remains behind.
However, for those investors who are skilled in the use of technology, scalable opportunities are being created like never before. This is the second post in a series that examines how advancements in technology are affecting investments in real estate.
You can access the first post on this topic, which discusses how advances in technology are affecting property management, here. For the purpose of this essay, I have provided a rundown of many technological platforms that we have discovered to be useful for investing.
9 Tips for Real Estate Investors
1. Free Online Education
Let’s begin with the basics: learning about the ins and outs of real estate. In terms of real estate education, the widespread use of free podcasts has proven transformative. Forget about shelling out $20k for a “guru”-led weekend retreat.
Articles and podcasts provide all the information you’ll ever need for free. As simple as this may sound, I believe it represents a fundamental shift in the way information and expertise are shared. BiggerPockets, Real Estate Guys, and Masters of Scale are three podcasts that I highly suggest.
2. Availability of Sales Comps
If you’re an investor with a keen eye for cutting-edge technology, you’ll want to check out Zillow. Using the Zillow filters is a snap. Because of Zillow’s filters, locating comparable properties is a breeze. When it comes to refinancing a BRRRR, comps are a necessity, and for flipping a property, comps are a necessity for determining resale value.
Is the MLS something I use? Since not all data is available on Zillow, I resort to the Multiple Listing Service (MLS) when necessary. With Zillow data, I believe you can get 90% of the way there in less time.
3. Easy-to-Find Rental Estimates
There is so much to learn about rental estimates that they might easily be a separate topic. If you know where to search, you may find a wealth of information online. To ensure the accuracy of our rental data, we consult four distinct sources.
Zillow is a good place to begin when looking for a single-family home in a densely crowded neighbourhood. Rent-o-metre is the next tool we recommend. We also utilise AccurateRent, a program we designed ourselves to estimate rent. It currently only works in Pennsylvania and New Jersey, but we’re planning to expand it to more states in the future.
To develop the algorithm, we use our own property management software, and it grows smarter as more data is available Our final step is to contact a local property manager to confirm if rent is a significant factor in the sale price. When you combine these four pieces of information, you’ll get a fairly good idea of where you stand—without ever having to leave your couch! We expect that when additional data becomes accessible, these sets will only get better.
4. Quick & Easy Marketing to Would-Be Sellers
The most common method of finding a deal in the real estate market even just a few years ago was “driving for bucks.” To look for an old, dilapidated house, you’d have to drive from one end of town to the other. As a final step, it is necessary to knock on the owner’s door and attempt a purchase negotiation. Never underestimate the power of the dollar-for-dollar haggle. However, driving for revenue is a very difficult way to scale a firm.
Buying a database and using internet advertising to target customers is a near-total automation of marketing nowadays. We just sent a message to 600 Chester County, Pennsylvania home and business owners this week. To get to the relevant data, it took roughly an hour of searching and another hour of setting up the right messaging. What an exhausting task it would be to knock on the doors of 600 people!
5. On-Market Deals Access
Buying a house off the MLS is frowned upon by many buyers. I don’t think the MLS is a not good place to look for deals. Buying a home on the MLS requires a high level of organisation and a firm commitment to the task at hand. In both cases, I believe technology is a huge benefit.
To keep track of properties that meet our criteria, I keep up-to-date filters in several marketplaces. After that, I make every effort to reach out to the seller as quickly as possible with an offer of real estate investing softwares. The property will be added to a database for future follow-up in the event the seller rejects the offer. But using MLS criteria, rather than depending on local signage, agents, etc., makes this much easier.
6. Simple Ways to Evaluate the Deal
Using Google’s shared spreadsheets to evaluate deals is a must. I use the same form for every transaction and DocuSign Competitors to create an online signature for contract signing. For the sake of transparency, I’ve shared this model with our acquisition agents. As a result, we are able to rapidly evaluate our pricing strategy by entering the variables directly into our model. Our representative is also tasked with putting the property’s photos and video files on Google Drive. In seconds, I can see how much it will cost to maintain the vehicle.
7. High-Tech CRM Lead Databases
With a CRM database, you can keep track of leads and keep in touch with the owner until the property sells. There are a variety of CRM databases on the market. Rather than relying just on your memory, I believe the most important thing is to employ at least one of them. Google Sheets works well for us, but we’ve heard from investors that Salesforce and Podio are preferred tools. The most important thing is to keep an eye on the lead and keep following up. Follow-ups are impossible and leads are doomed to stagnation in the absence of technology.
8. Useful Property Management Ledger/Databases
Property management firms use a wide range of technology in their daily operations. A back-end accounting database is just one of the many technologies available. In order to keep track of, maintain, and optimise their properties, investors must have access to this information.
I strongly feel that the best way to succeed as an investor is to check in with a property management company on a weekly or bi-weekly basis to see how things are going. This not only allows investors to keep tabs on what’s going on, but it also frees them up to look for new opportunities.
9. Valuable Online Communities
Becoming a member of an online community is an excellent investment instrument. I recommend joining a local Facebook group for information on the area. A group for investors was formed in Pennsylvania, while another for landlords was established. Both have been quite beneficial, and I strongly advocate setting up a similar program in your area.