Insights Aug 28, 2018 Elion Partners

Big Data Disrupts Real Estate Investment

It’s no secret that seeking off-market real estate investment opportunities enables investors to get ahead. That has been and continues to be core to Elion’s acquisition strategy. Historically, investors have relied on publicly available lists and their own networks to source these types of off-market opportunities. Today however, savvy investors have more and more resources at their fingertips, driven largely by the continued expansion of big data. Utilizing this growing trend, Elion is working to put a strategic plan in place in order to harness additional prudent opportunities far ahead of any public listing or sell-side process, which further enhances our in-place off-market acquisition strategy.

Recently, The Real Deal, CNBC, and others have reported that a record level of venture capital funding, approximately $18.6 billion, has been pouring into big data companies. Many of these companies are creating data and analytics solutions for financial firms, but increasingly this venture capital funding is going towards companies that are supporting and fueling real estate industry initiatives. For example, Stan Humphries, chief economist and analytics officer for Zillow Group, pioneered the use of big data in the real estate industry by embracing analytics as a way to differentiate and fundamentally change the company’s business model. He has raised an unprecedented amount of capital to bolster the company’s platform to include additional complex data sets, which we are now seeing across the industry.

Using this latest technology and advanced algorithms, smart data filters and overlays, real estate investors can access data that goes deeper than simply providing names and addresses at a moment’s notice. Investors can now glean information on sellers’ social profiles, the financial position of a property, the mortgage status of a property, and the ability to easily assess debt-to-value. This in turn saves time and makes investors more efficient in their outreach and engagement with prospective buyers or sellers.

As these resources become more readily available however, it is crucial to remember that not all data is created equally. Strategic investments require a firm with a team that is able to analyze it appropriately and identify anomalies and caveats where they exist in order to make smart real-time decisions.