Algorithms alone will never be enough.
If you are like most real estate investors, you spend quite a bit of your time searching for deals. You probably also spend quite a bit of your time fielding offers from various service providers who are more than willing to find those deals for you. Unfortunately, most investors find that even the most dedicated opportunity-seeking services leave them still running around, spending time in the field vetting potential deals, evaluating those deals, writing and submitting offers, then babysitting those offers until finally, one deal gets done.
Are these investors just control freaks who can’t quite let go? Absolutely not. But they do have a fatal flaw in their perspective: They think complete automation is the goal.
Now, sure, automation has tremendous value, but it has limits. A truly full-service real estate company will not only boast the best algorithms and the most up-to-date data-scraping and -delivery services. That company will also boast a decidedly human factor, and here’s why:
Algorithms are essentially giant filters. A filter can pull out everything that looks like a diamond in the rough, but some of those “diamonds” will be congealed chunks of coal that never quite made it to gemstone status. No algorithm can filter out 100 percent of the imposters, so true automation for you means your service provider must include the human element.
Think about it:
There are direct data feeds out there that refresh every few seconds and are updated constantly in real time. At any given time just in my company’s geography alone, there are roughly 40,000 homes on the market. Even with a well-defined algorithm in place, hundreds of those 40,000 properties will get through the filter, and you know it is realistically impossible for every one of those properties to actually be a good deal. On the other hand, if the algorithmic filters are tightened, some good deals will be missed. Algorithms can only take you so far. You still need that human element evaluating and, ideally, managing the logistics of your deals.
The decision is yours: Will you be that human element, or will you select a team to perform those processes for you?
Items that Require Manual Involvement from a Human Element
Detailed opportunity analysis, including inspections, renovation budgets and title searches
Offer submission and follow-up