AI Could Take Your Job, But It Can’t Take Your Real Estate

Dave:As many as 30% of all jobs within the US could possibly be affected by AI inside the subsequent 5 years. Are you assured your profession path will final till retirement age? And what are you doing to guard your self from the unknowns of this quickly advancing new expertise? Right now, we’re supplying you with an investing answer to safeguard your monetary future. AI would possibly take your job or all of our jobs, however it could possibly by no means take your actual property. Hey everybody. I’m Dave Meyer. I’m a rental property investor and the top of actual property investing right here at BiggerPockets. And with me at the moment on the podcast is my good friend Henry Washington. Henry, how’s it going?

Henry:What’s happening buddy? How are you?

Dave:I’m

Henry:Good,

Dave:However I acquired to confess my AI anxiousness is fairly excessive. How excessive would you It ought to be. Okay. I’m glad we’re on the identical web page about this as a result of I simply need to be susceptible with you, man. For the

Henry:File, you need to be to your day job. Your investments are most likely okay, however you need to completely be anxious

Dave:Being a knowledge analyst.

Henry:Yeah, 100%

Dave:Or podcasters or each.

Henry:Yeah, all the above.

Dave:Each, sure. So I feel this can be a good subject for us all to speak about as a result of I don’t know anybody who’s similar to, yeah, that is going to be wonderful. There’s going to be no disruptions. Even in case you imagine within the expertise, which I do, I feel long-term it’s most likely going to be helpful, however I feel there’s plenty of uncertainty what occurs as we transition to a AI supported economic system within the subsequent couple of years. So I wished to speak about that on this podcast and the way it pertains to actual property. So at the moment we’re going to speak about one of the best ways to take management of your finance and the right way to get began proper now. So Henry, you’re clearly roasting me. I do suppose knowledge analyst is like primary job for a job that’s going to get changed.

Henry:It’s like the primary job that’s going to go away,

Dave:Which simply sucks, man, as a result of in 2014 or one thing, I noticed all these stories like knowledge scientist, knowledge analyst, primary job for the long run, and I went again to highschool and acquired a grasp’s diploma on this. I’m like job safety endlessly. 10 years later, it’s the worst job to have. I simply completely acquired punked on this. However I imply your job earlier than you went into actual property full-time was comparable, proper?

Henry:It was nearly the very same factor. Sure.

Dave:So you’d even be screwed in case you had been in a full-time actual property investor

Henry:Proper now. 100%, sure.

Dave:So I imply, I do know you’re not an knowledgeable on this. I’m not an knowledgeable in ai. I’ve carried out some analysis earlier than this present, however knowledge analyst is unquestionably up there, however I’ve a tough time imagining who’s not going to be impacted by AI within the subsequent couple of years. I feel you have a look at plenty of companies, plenty of white collar companies. I’ve labored in tech my entire profession and this entire business is admittedly getting shaken up, whether or not it’s product managers or software program engineers. One other job that has been a extremely extremely wanted extremely paid ability over the past couple of years are coming for legal professionals, paramedics. It’s actually going to impression the entire economic system. It’s only a matter of when even the roles that we at the moment are saying are considerably secure from ai, they’re nonetheless going to be impacted by AI in a roundabout way in the end, proper?

Henry:100%. There’s not a approach round it.

Dave:So pay attention, I don’t need to be completely alarmist. I don’t suppose the sky is falling simply but, however I feel there are already indicators that AI is impacting the labor market, and I do suppose that’s solely going to proceed because the expertise will get higher and higher. And so I assume my query to you is from a monetary perspective, how do you even take into consideration that?

Henry:I imply, I feel it went out the window when pensions went out the window, proper? As a result of the final time I might bear in mind any person saying they retired comfortably was as a result of they’d some form of pension or some profession the place they’ve some form of pension like retirement, like firefighters have nice retirements, navy have nice retirement, the place you get tenured, these sorts of issues. These individuals say they’ve comfy retirements, however when’s the final time you personally ever heard any person who had a 401k who was retired say, I’ve a snug retirement.

Dave:I don’t actually know, to be trustworthy. I imply, I feel each one who’s retired I do know has some stage of financial or monetary anxiousness and uncertainty.

Henry:So I feel that imaginative and prescient that you just painted that we talked about has been gone for some time and AI’s simply going to make it worse for individuals who don’t have a plan who’re solely counting on that 401k earnings.

Dave:The best way I maintain occupied with this, and I do know I’m biased as a result of I’m an actual property investor, I’m occupied with all of the issues that I might do to attempt to quell my very own worry about this and ensure that I’ve earnings. And I’m just like the one factor AI actually can’t do proper now or most likely for the foreseeable future is personal property. And to me, that simply has form of strengthened my perception and prioritization of actual property investing as a result of despite the fact that we’re in a really unsure economic system, it does make me really feel like actual property goes to offer a extremely robust spine. For me. That has all the time been true, however particularly on this new setting.

Henry:And I feel the worth with actual property by way of AI is it’s simply approach too individuals going through. We’re offering housing to individuals, whether or not you’re fixing and flipping, whether or not you’re short-term renting, long-term renting, the housing is constructed for individuals to stay in, the inhabitants remains to be rising. These individuals have to stay someplace. My concern from an actual property perspective with AI is that if AI does have such a unfavorable impression on the economic system, these individuals nonetheless have to stay someplace. And is that going to drive housing costs down as a result of individuals aren’t making sufficient cash to pay for extra housing to pay greater rents as a result of there’s much less jobs? How does that monetary unfavorable impression harm or assist actual property?

Dave:We do need to take a fast break, however Henry and I will probably be again proper after this. This week’s larger information is delivered to you by the Fundrise flagship fund, put money into personal market actual property with the Fundrise flagship fund. Try fundrise.com/pockets to be taught extra. Welcome again to the BiggerPockets podcast. I’m right here with Henry Washington speaking about how AI is disrupting our complete business. Let’s bounce again in. Okay. We’ve mused sufficient about AI and shared our ideas about it, however perhaps inform me what you suppose the advantages of actual property investing are in this type of setting. Is it simply the identical as they’ve all the time been or is there something completely different to you?

Henry:The advantages of actual property after which the advantages of commerce work?

Dave:Yep. One hundred percent.

Henry:Commerce work acquired actually uncool as expertise began to advance. And so individuals had been like, why would I am going discover ways to be a plumber and get my arms soiled after I can go and get this tremendous cool expertise job? And now expertise has superior a lot that it’s like persons are like, why would I am going get that expertise job that might go away in per week after I can go discover ways to be a plumber and make 150 to $200,000 a yr beginning out? And so I feel that proudly owning the actual property, sure, you get the tax advantages, you get the cashflow, you get the appreciation, however the security from an AI perspective is that it’s individuals targeted and AI

Speaker 4:Will

Henry:Assist us function our companies higher by serving to us do issues that sometimes took much more time to do, which may technically aid you develop and scale your actual property enterprise quicker now by leveraging a number of the AI instruments. However you’ll be able to’t take the individuals out of actual property. It’s not a factor for

Dave:Positive. Yeah. I need to get again to how AI profit actual property in only a minute and the trades, I need to discuss to these. However yeah, I need to simply hit on why actual property? Since you might say the identical factor like, oh, AI is coming to your job. It’s best to put money into Bitcoin or you need to put money into the inventory market. And to me, I feel that the actual lesson or the factor that I’m taking away from that is possession. It is advisable to be an entrepreneur and personal your personal enterprise so that you’ve management over the way in which AI is being adopted round you. As a result of in case you work for one more company, another person goes to decide about the place they’ll reduce individuals and the place a machine can try this job. Now, as Henry stated, AI goes to impression actual property in a roundabout way, and I feel it simply actually is in these sorts of eventualities, you get to resolve what you spend your time on and what AI is used for. That’s going to be like a defining differentiator for the way individuals fare over the subsequent few years. And I’m not saying that’s proper, I simply suppose that’s the way in which it’s and that’s all of the extra cause for individuals to pursue entrepreneurship, whether or not it’s actual property investing or one thing else, to simply have that say and have some management over your earnings and your future.

Henry:Yeah, I imply that’s what I like about actual property is the quantity of management that I’ve a sure, management over the earnings that I make management over the place to implement applied sciences or not implement applied sciences, but in addition simply management over my funds and having the ability to become profitable the way in which I need to become profitable. And after I select to become profitable, which it was extra of a luxurious 10 years in the past and much more of a luxurious 20 years in the past as a result of that path of go to highschool, get a level, get a job, work the company ladder and retire was simpler to do. It was extra achievable. However as expertise has grown and the convenience of that has dwindled away, changing into an proprietor of one thing has develop into extra essential. I hear and I see loads, particularly on social media the place individuals say, cease telling individuals everyone must be a enterprise proprietor or an entrepreneur. There’s all the time that crowd that’s like, this isn’t one thing you need to do, you’ll be able to simply go be an worker and you may,

Speaker 4:Yeah, it could possibly,

Henry:However that path isn’t as assured because it was by way of having the ability to try this after which retire comfortably. And it comes with sacrifices. Each of those paths include sacrifices as a result of the sacrifice of the 9 to 5 is much less management. Anyone can take your job from you after which you need to go discover one other one. And for some that’ll be simple and for some that’ll be tougher. However the sacrifice for entrepreneurs is you bought to go get it. I noticed a TikTok the place a man stated, entrepreneurship broke is worse than 9 to 5 broke.

Dave:Sure.

Henry:As a result of 9 to 5 broke when your subsequent paycheck is coming. If I could make it a pair extra weeks, I acquired slightly bit extra money coming in. However entrepreneurship broke. You don’t know when that subsequent paycheck is coming in. You bought to go make the cash. And in order that’s the sacrifice you make with possession is you bought to go make the cash and you might make it each couple of weeks. You might make it each couple of months. You might make it annually, proper. It depends upon the business that you just’re in and the way you arrange your enterprise. And so that you’ve acquired to decide on your coronary heart for positive. I simply suppose that the 9 to 5 path isn’t as safe because it was, and you need to be occupied with the right way to defend your self and simply right here to let you know and discuss to you about how to try this in a secure approach, safer approach with actual property. That’s the entire level of us being right here.

Dave:So my query although to you although is like let’s presume everybody agrees with this, that actual property is an effective method to form of hedge in opposition to the uncertainty that AI is bringing. Do you suppose you’d change your recommendation to the typical investor who’s not a full-time skilled investor, how they might go about it on this period or would you retain giving the identical recommendation you will have been?

Henry:No, it’s the identical recommendation. That’s the best half about actual property. To me. The way you do it primarily has remained unchanged over the course of its lifespan.

Henry:The entire level of getting cash in actual property is discovering one thing that has a possibility so that you can add worth to it, shopping for that factor, including the worth, after which monetizing it at its new greater worth, whether or not that’s renting it out, whether or not that’s promoting it, whether or not that’s midterm renting the exit technique isn’t essential. The objective nonetheless is, has all the time been and can proceed to be for the foreseeable future, is to seek out one thing that has alternative so that you can make it extra beneficial and then you definitely make it extra beneficial and also you monetize the upper worth. Now as time has moved on and expertise has superior over the course of actual property being owned by the widespread particular person, there have been instruments which have allowed you to try this extra conveniently. It was an entire lot tougher for somebody to drive for {dollars} earlier than apps like deal machine existed. And it was an entire lot tougher for somebody to establish distressed properties earlier than the web existed and also you needed to go right down to the courthouse and lookup all these properties that you just drove by and noticed after which manually look them as much as construct a listing to achieve out to these sellers,

Henry:Just like the individuals who had been doing these techniques previous to the web, needed to spend an entire lot extra time to get the end result that you just and I can get on the click on of a button on our telephone now. However how has all the time been the identical. They had been attempting to establish properties that had alternative so as to add worth, and so all AI goes to do for us is assist us get that extra conveniently. However how hasn’t modified? And I don’t suppose it’s altering.

Dave:We acquired extra about AI and how one can really use AI for a optimistic profit in your actual property investing enterprise proper after this fast break. Stick with us. Welcome again. I’m right here with Henry Washington speaking about how AI might help you in your enterprise already and the place we expect the business is heading as we undertake ai. We discuss on the present loads, attempting to determine what you’re good at. A lot to do in actual property investing. You possibly can’t be good in any respect that you could’t do all of it. And for me, for 15 years that I’ve been doing it, I felt like I used to be good at market evaluation and deal evaluation and that doesn’t even matter anymore. I’m simply questioning if that’s even a ability.

Henry:It’s not a ability anymore, it’s a button on a chunk of software program.

Dave:Precisely. And so I have to evolve I feel as an investor and I’ve carried out worth add stuff in most likely not essentially the most environment friendly approach. I’m a long-term investor, so I’ll purchase stuff. I’ll most likely take longer to do worth add than you do. In all probability pay slightly bit greater than you do out of comfort. And I’ve thought laborious about that. I’ve instructed you this, however I feel I discussed on the present that I’m flipping my first home actively not I essentially need to flip homes, however I need to get higher at building. I need to be taught the enterprise loads higher as a result of that’s a ability that you could examine, however you’ll be able to’t actually get good at it until you’re on a job website studying about it. And so I’m simply attempting to be taught new issues, even 50, I instructed you earlier than, I can’t be taught new issues right here. I’m saying that I’m attempting to be taught new issues, however I’m simply attempting to consider what my benefit goes to be as an investor and it’s actually, actually modified for me over the past couple of years.

Henry:Yeah, that’s an outstanding level and really true since you’re proper, these are expertise that an actual property investor did have to know. And I’d argue that any actual property investor that’s going to develop a considerable portfolio, in different phrases, you’re going to personal extra than simply a few homes, you need to nonetheless most likely perceive these expertise.

Dave:Oh, for positive. It’s superb to me how many individuals cite metrics to me like they’ve chatt it they usually do not know what the metric means. They’re utilizing it within the full unsuitable approach or they have a look at, you’ll be able to pull a listing of high markets to take a position, however that potential to attach why that market is nice to your personal private technique and your private circumstances, completely you’re nonetheless going to wish that, however that may most likely be the primary yr of your investing studying how to try this. It’s not one thing that’s going to be a enduring profit and ability that you just’re going to outcompete different buyers on.

Henry:I feel there are sufficient instruments on the market which might be subtle sufficient that in case you don’t know the right way to analyze a deal or analyze a market, you can most likely use a few of these instruments and decide a good sufficient deal in a good sufficient market. Now does that imply it’s the precise factor to purchase? No, I feel you do want that second tier of skillset that you just had been speaking about, however for many who don’t need to put in that effort and time, it’s an entire lot simpler to get the dart on the dartboard than it was.

Dave:Oh, for positive. There’s simply superb instruments that simply run an estimated money on money return for each property on the MLS that used to take hours. And I assumed that was a part of ability good at that sort of factor. And I might run offers quicker than different individuals and I might make a suggestion, no matter. Now it simply doesn’t even matter. I imply, I’d by no means make investments primarily based off these numbers, however I might kind right down to 10 or 15 offers that I need to hand analyze loads quicker and soak in everybody else. So I feel that’s the way in which I’ve been considering loads about that is there’s all the time going to be an ebb and movement of curiosity in residential actual property. When rates of interest had been actually low, individuals flooded into this market and that’s when having expertise like Henry had for deal discovering tremendous helpful or my potential to investigate new markets or discover new neighborhoods, that sort of stuff is what I used as a bonus. However I actually suppose individuals have to deal with issues which might be going to offer them a aggressive benefit in an AI period in eras of excessive demand and low demand. And to me, you’re nice at deal discovering. I feel that’s all the time going to be true. That’s not the place I’m selecting to construct my skillset proper now, however I feel that and worth add building are the 2 issues which might be actually going to endure on this enterprise. And so they’re issues that you actually need to be taught.

Henry:And I feel these are issues that you could establish now. And I feel we sort of have to offer this a while to assist us establish what issues AI goes to create in order that we are able to work out if our ability units

Henry:Can create options to these issues. We don’t know the issues but. Actual property is, it takes time if persons are utilizing AI instruments to assist them construct an actual property enterprise or portfolio now that might have issues or impacts sooner or later that we simply don’t see but as a result of there aren’t sufficient individuals most likely doing that or leveraging it sufficient and making choices purely primarily based on knowledge and instruments that AI are offering. However each new answer to an issue then simply creates new issues that want new options. And it’s going to take a while for us to have the ability to work out what are these issues after which what expertise do we’ve got that may assist us resolve a few of these issues. I imply, these issues are coming, however I feel the way in which you’re considering is the precise method to suppose. Given what I do know now and given the abilities that I’ve now, what can I educate myself on that’s going to assist maintain me related till I can discover out what these new issues are?

Dave:That’s a great way to place it. I’m not going to remorse studying extra about building. Completely. You’re not going to remorse getting nice at off market deal discovering. These are issues which might be going to be good. I’m going so as to add a 3rd one to that. Simply regular human interplay. Get good at that as a result of I really suppose that’s going to be one of many issues that’s uncommon sooner or later. And actual property we all the time say, however it’s true. It’s individual to individual sport. You’re going to fulfill with contractors, you’re going to fulfill with tenants, you’re going to fulfill with property managers and people who find themselves good at not simply studying about these individuals and vetting these individuals, however getting them to work collectively. That’s a lot of an actual property investor. And I do suppose AI will assist with that in some respects with the nuts and bolts of it.

Dave:However the face-to-face interactions aren’t going to go away. And that’s one thing I feel you’ll be able to be taught loads. However you made an excellent level that I feel is essential is that the opposite ability that’s going to emerge for positive, it’s like who makes use of AI one of the best and it’s too early to understand how that’s going to play out. However that’s one thing most likely myself everybody ought to be occupied with and possibly one thing we ought to be updating everybody on the present very ceaselessly about is what one of the best AI instruments are and one of the best implementation of these instruments are. Which form of brings me to a different query is like are you utilizing AI in your investing

Henry:Right now? In all probability not as a lot as different buyers for positive, however completely. Among the locations we use it are by our listing constructing. So I used to be utilizing a software that primarily what they do is that they take county knowledge, they take knowledge from junk mail corporations, they take knowledge from different buyers, they take all this actual property knowledge they usually attempt to put a rating on each home inside a neighborhood or a zipper code to say what’s the probability share sensible that this specific vendor would promote to an investor primarily based on all these knowledge factors.

Dave:Oh, fascinating. So it’s lead scoring.

Henry:Precisely.

Dave:Okay.

Henry:And so then advertising and marketing to that listing to see if that has a better conversion fee on offers than only a conventional listing.

Henry:Another issues that we’re testing is actually there’s an AI software that may chilly name 1000’s of individuals at a time, proper? As a result of it’s simply an AI bot, it’s not an individual speaking. And so the sophistication stage of a few of these AI air quotes, people who discuss have conversations with actual individuals is getting higher and higher. And plenty of the occasions individuals don’t even know they’re talking to an AI agent. And so like a use case for that is, let’s say you’ve acquired useless leads. Each actual property investor has useless leads, particularly in case you’re off market offers. So say you will have 5,000 to 10,000 simply useless contacts, you place it on this AI calling software, it calls all of them and perhaps you get one or two leads out of it. That’s why plenty of buyers don’t work these useless leads additional since you put in plenty of effort to get a low return in your effort, but when it doesn’t impression anyone’s time, if AI can name 10,000 individuals and kick you again 5 scorching leads in a matter of minutes, that’s large. Fairly good. That’s large.

Henry:You possibly can make 1000’s of {dollars} for very minimal work. Beforehand you had been going to spend weeks researching all these individuals and knowledge to make these calls and get very restricted outcomes. And so individuals wouldn’t do it. After which there’s simply different cool AI instruments. Like I take advantage of an AI software that it’s comparable, it’s an AI calling agent, however it could possibly simply name and do plenty of the mundane job issues that you could do in your enterprise. So we use it to name and activate utilities. So all I have to do is say, Hey, name the town of Bella Vista and activate electrical energy at 1 2, 3 Primary Avenue and it’ll simply name and have that entire dialog after which simply produce the outcomes For me. I’ve had it name and discuss to this timeshare firm my mother is part of to get a bunch of knowledge out of them so I can go and cancel the timeshare. I didn’t have to sit down on a customer support name for 45 minutes to an hour.

Dave:That’s your jam, dude. You don’t wait in line. I hate that is your digital reply. Yeah.

Henry:So yeah, it’s good for you. Little stuff like that has been an incredible occasions saving permits me to do extra with the time that I’ve. I’ve to go sit on customer support calls. It’s fairly cool stuff. So there’s simply, we’re not utilizing it. I’m not constructing AI chatbots and going on the market and speaking. There are individuals which might be at that stage of sophistication who’re creating true AI instruments to customized utilizing their enterprise. I’m simply utilizing what’s obtainable on the market and seeing the way it might help my enterprise.

Dave:I simply suppose we’re within the infancy of this. In tech, there’s these adoption curves that they’ve the place it’s like proper now we’re with the lovers. People who find themselves tremendous keen are going to go construct these issues and that’s nice, however personally, I’m the sort of adopter who’s simply going to attend to see who wins within the house and what one of the best instruments emerge. I’m not going to go construct my very own. So I’m going to go wait and see, and for now I’m going to do issues like what Henry’s doing. I don’t do chilly calling or something like that, however there are already instruments that I’ve been utilizing to scrape knowledge from web sites and to consolidate knowledge that has actually been an enormous assist. I nonetheless test all of it manually, however it helps aggregating knowledge, which any knowledge analyst will let you know is like 70% of the job. In order that’s true. After which I don’t know in case you’ve used this, however I really like this factor. Have you ever heard of Cubi Casa or Cubi Casa,

Henry:You pronounce it? Sure. KU is superior. We apply it to each

Dave:Listing. It’s

Henry:Magic. We use it. It’s for all of our properties. It’s

Dave:Superb. Yeah, KU Casa is superior, and it simply offers you as-builts and stuff for really easy, tremendous simple. And you can do it the day you stroll across the property and you have already got as-builts. It’s superb. In order that was my little AI trick that I discovered the opposite week. That was actually cool.

Henry:Yeah, dude, we’ve got Ku Casas on each property, even after I’m simply strolling them. Having the format and having the ability to stroll your contractor by on only a format that was tremendous simple so that you can make and you may transfer partitions and issues, it’s superior. Tremendous cool. It’s superb.

Dave:Nicely, these are those that I’ve discovered up to now. However yeah, I take advantage of chat T in my each day job on a regular basis. I take advantage of it on a regular basis simply asking questions and that form of factor. However I’d like to know for people who find themselves listening, actual property buyers, energetic, aspiring, what AI instruments are you utilizing? Tell us in case you’re watching this on YouTube within the feedback, I’d love so that you can share with our group any ideas that you’ve on utilizing AI as a result of we’re all studying about this on the similar time collectively. Or in case you’re listening on Spotify, you’ll be able to really go away feedback now there too. Positively tell us. It might be an enormous assist for us. And with that, that’s what we acquired for you guys at the moment. However that is positively going to be the primary of many conversations about AI right here on the BiggerPockets podcast.

Dave:We wished to convey you this primary episode simply to speak concerning the want for ai, the necessity for actual property in ai, the right way to use AI in actual property, and get the dialog going with our group. As a result of clearly Henry and I, not but consultants on ai. I don’t suppose anybody can actually say that they’re an knowledgeable but, and we need to invite you all in to assist us find out about this collectively and as a group, discover ways to each defend your self in opposition to the dangers of AI and embrace the great elements of AI as an investing group. So Henry, thanks for becoming a member of me for it.

Henry:Hey, man, thanks for having me.

Dave:Thanks all a lot for listening to this episode of the BiggerPockets Podcast. We’ll see you subsequent time.