NUTS & BOLTS
TECH TOOL REVIEW
Playing Catch-Up REAL ESTATE LAGS BEHIND OTHER INDUSTRIES IN EMBRACING THE POWER OF THE INTERNET, BUT TOOLS LIKE INVESTABILITY ARE HELPING CHANGE THAT. s more companies enter the real estate technology space, investors’ options for obtaining rental properties online have expanded rapidly. One of the newest entries in the space is Investability, an online search and acquisition site that lets investors find and acquire rental properties through- out the United States. Through the site, investors can also obtain financing, order home inspections and engage a property management firm. Investability’s one-stop shopping tools are powered by data from sister site RentRange, a provider of rental property data. Retail investors usually don’t have access to institution- al-quality data like this, says Dennis Cisterna, chief revenue office of Investability. “I provide Wall Street analytics to Main Street investors,” he says. “Most investors don’t have the ca- pability to buy those kinds of data sets or create that kind of modeling on their own.” Investability aims to provide all the data an investor needs to make a good buying decision on a property. Cisterna says his solution layers RentRange data into a property calcula- tor that can be used on all properties on the site. The rent, property taxes and property management are estimated so investors can determine what the cash flow and yields will be on a property. Investors know that the estimates are only as good as the data used to create them. “We’re very confident” about the accuracy of the data and estimates, Cisterna says. “RentRange is the largest data provider in the single-fam- ily rental sector,” Cisterna says. “Our data has been used for evaluations on every single one of the securitizations done in the single-family rental sector, and that totals close to about A by Robert Springer HELP FINDING THE RIGHT INVESTMENT PROPERTY
plug in his or her investment objectives—say, not less than 2,000 square feet with a cap rate of not less than five in the Dallas metro are—and the site will display the results. The customer could put an offer on the property or run another screen. “Now, you’re really giving that next level of analytics and underwriting to the average investor,” Cisterna says. Another just-launched feature is integrating available ser- vice providers more easily into the site to ensure that custom- ers know that a turnkey solution is available. Features like these show that Investability is more than just sophisticated back-end IT, according to Cisterna. “That’s real- ly up to our customer service teams to provide a best-in-class, more consultative approach to this,” he says. “It’s one thing to use our data and look around a website, but now that you’re ready to buy, and you’re ready to kind of build the team to service that property, that’s where our transaction managers, our customer service team, our agents, really take it to that next level, by being able to provide the insight you probably don’t have on your own.” Perhaps by the end of the decade investors will have discov- ered how real estate technology has made buying investment property easier than it was a mere five years ago. •
$20 billion now. If it’s good enough for Wall Street, hopefully, it’s good enough for me, too.”
sounds pretty appealing to me, especially if I like the funda- mentals of that market.” Sites like Investability and RentRange are becoming one- stop shops for investors looking to capitalize on the more- than-10-miles-away market. It’s never been easier to be a landlord, according to Cisterna. “We are focused on being the hub, on being the one-stop shop that really combines a lot of the technology together. Whether it’s data, or access to properties, or building your A-Team of service providers, you can do it all in one central hub,” says Cisterna. Instead of having to call numerous out-of-town service providers to help an investor with a rental house, a few mouse-clicks in Investability will call up a list. In addition, the site offers online reporting and rent collection. NEWFEATURES FOR INVESTORS Investability is beta-testing a sophisticated tool for institu- tional investors that will eventually be available to retail inves- tors as well. The Investability acquisition portal is an “online underwriting platform that can be fed with any type of data strain possible, whether it’s a portfolio data tape, an entire MLS feed or multiple MLS feeds, and it will use your parameters to automatically underwrite that property,” Cisterna says. Next, Investability underwriters will review and, if neces- sary, correct the data and then allow investors to bid on the properties online. In the future, a retail Investability customer will be able to
RE TECH IS AHEAD OF THE MARKET Of the dozens of industries that have been disrupted by the internet, real estate is one of the latercomers. There are good reasons for this seeming tardiness, Cisterna says. For one thing, it’s a highly regulated industry, so change takes a while. “Real estate is a complicated transaction; it’s not the same as hailing a taxi,” he says. Secondly, the marketplace is very fragmented, with states and municipalities having differing rules. And although that’s still true, sites like Investability bring the power of the internet and big data to simplify a complex transaction. “I think we’re moving in the right direction, where we’re starting to at least reduce some of the typical friction points, in a typical real estate transaction,” he says. Market research, accessing service providers, assessing market opportunities and even finance are being made easier, according to Cisterna. In 2017, Cisterna says, real estate tech is now “definitely ahead” of the real estate investment market. “Statistically, 70 percent of all real estate investors own in a 10-mile radius of their own property,” says Cisterna. “I grew up in Southern California, but buying a rental property there right now, at a negative-2 percent cap rate, doesn’t sound very appealing to me. But going to Dallas and buying something that’s a 6 or a 7, or going to Ohio, and buying something at a 7 or an 8, that
Robert Springer is a regular freelance contributor to Think Realty Magazine. Contact him at rtspringer@gmail.com.
96 | think realty magazine may :: june 2017
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