P2P Technology and Real Estate
Real estate is one area of investment where technology has not always played a leading role. With the onset of online peer-to-peer marketplaces, however, that’s rapidly changing – and generally those changes are leading to increased transparency for investors.
Some of these data processing techniques have already come to market in the market for owner-occupied residential real estate. Companies such as Zillow, Trulia, and Redfin, among others, offer census information, the results of consumer surveys, listings of homes for sale and rent, geographic information systems data and more. The tools can deliver to consumers information about their property's potential value and help them understand home-value trends within a particular milieu, such as a neighborhood or a ZIP code.
The commercial real estate world is now being similarly revolutionized.
Real estate investors have long needed an easier way of monitoring their returns on investment portfolios. The better peer-to-peer real estate companies allow investors to easily track the various properties in their portfolio. Realty Mogul’s investment “dashboard,” for example, allows investors to stay abreast of their account value (divided between debt and equity investments), cumulative earnings, and cash and earnings activity. Individual property investments can also be tracked by start date, expected distribution date, and maturity date. Earnings or interest payment histories are broken down to show the date and amount of each such distribution.
Real estate can be an opaque and imperfect market, with comparable sales and cash flow figures difficult to find. More and more, however, research reports, market analyses, and appraisal information can be assembled and provided to investors so that more informed investment decisions can be made.
Investors often want some time to mull over a particular investment opportunity. In other instances, however, technology can lead to much quicker transaction processes. Realty Mogul, for example, uses technology to make rehab investor loans simple and fast. The application process is straightforward, so that borrowers merely provide a few key parameters – the location of the property, the purchase price, the rehab budget, your own income & net worth, and a few other items – and technology takes the inputs and promptly generates a letter of intent.
Local Knowledge is Still a Useful Double-Check
With respect to property acquisitions, good local information is still useful. An expert local broker or appraiser is often aware of recent sales, knows what sort of developer incentives are being offered, and may have some insights into what it takes to get the best deal in a particular market. Big data is increasingly helpful to making smart investment decisions, but a local expert is still of great service in getting “the whole story.”
Investors can use the technology available in peer-to-peer real estate marketplaces to make informed decisions and to better track returns on investments and profit losses. Automated systems for collecting and analyzing data can also increase the accuracy of the information they need to invest confidentially. With the wide availability of information, big data solutions can enhance loss management for investors and protect their investments.
IMPORTANT: The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Hyperlinks to sites outside of this domain do not constitute an approval or endorsement of content on the visited site.