How to Use Artificial Intelligence in Real Estate Investing
AI is taking most industries by storm. The real estate investing industry is no exception.
Maybe you are a little hesitant to try out AI or don’t even know where to start. That’s why our team at DealMachine is here with this helpful guide to AI and all things Alma. Without further ado let’s dive right in!
Understanding Artificial Intelligence (AI)
I am sure we have all seen or at least heard of movies that are about AI, like Terminator, iRobot, etc. and maybe you are like me and used to think, “Wow AI is kind of actually scary and spooky I don’t know if I want to accept or even use it.” I mean why would someone want a machine capable of thinking on its own?
Well after some research and a lot of digging, I came to better understand AI and that not all AI is self-aware or uses theory of mind thinking which is what we typically think of when we think of artificial intelligence. Which definitely makes it less spooky in my opinion.
Artificial intelligence has been integrated within a variety of different technologies before AI became popular and widely accepted as AI. Now there are 4 main categorizations of AI based on its capabilities and autonomy (although it is not rigid), which will help with understanding the capabilities of Alma and the benefits of certain types of AI in society. Those categorizations are as follows:
- Reactive Machines: Reactive AI systems are designed to react to and interact with the present situation, relying solely on the current input without any memory or past experiences. These systems don't have the ability to form memories or use past information to influence their decision-making. They analyze the current data and provide a response based on predefined rules or patterns. Examples of reactive machines include chess-playing AI systems that make decisions based on the current board state.
- Limited Memory: AI systems with limited memory have the ability to retain a limited amount of information from past experiences. They can utilize this stored information to make decisions in the present. However, their memory is typically short-term, and they don't possess a comprehensive understanding of the world. Self-driving cars that use recent data to navigate and make decisions on the road are examples of AI systems with limited memory.
- Theory of Mind: AI systems with a "Theory of Mind" have the ability to understand and attribute mental states to themselves and others. They can recognize and interpret emotions, beliefs, intentions, and desires, which helps them better understand human behavior and interact socially. While this category of AI is still largely theoretical, it is an area of active research. AI systems capable of theory of mind could have applications in fields such as human-robot interaction and personalized virtual assistants.
- Self-Aware AI: Self-aware AI refers to systems that possess consciousness or self-awareness, meaning they have an understanding of their own existence, thoughts, and emotions. This level of AI is highly speculative and remains largely in the realm of science fiction. Creating truly self-aware AI is an ongoing topic of philosophical debate and ethical consideration
The AI in chatbots like ChatGPT, Alma, and even now parts of customer support software operate under a fusion of reactive machines and limited memory. That means that Alma, the AI real estate assistant, can process and give you a response to your questions.
However, since it operates on a limited memory system it can only interpret and learn in each individual chat. For example, when you go from lead to lead in DealMachine and use Alma it, unfortunately, cannot remember the corrections you gave it or if you like cold calling scripts in a specific tone.
Artificial Intelligence, AI, offers numerous benefits in today's technology landscape. It enables automation and efficiency, automating tasks and processes to save time and resources. AI excels at data analysis and provides valuable insights, allowing businesses to make data-driven decisions and gain a competitive edge. It enables personalization and enhances customer experiences by delivering tailored recommendations and content.
AI empowers decision-makers with accurate insights and predictions, facilitating strategic decision-making. By automating mundane tasks, AI frees up human resources for more creative and high-value work. It improves efficiency, reduces costs, and drives innovation across industries. Overall, AI augments human capabilities, streamlines operations, and unlocks new opportunities for growth and advancement.
AI in the Real Estate Industry
Now that we know the overall benefits of AI how does that tie into the real estate industry? For that answer let's take a brief look at a blog written by Benjy here at DealMachine. If you have not checked it out yet I highly recommend reading through it so you can get inside information on how the developers of Alma think it will change the industry.
In short, AI is leveling the playing field for new investors. It’s like you have superpowers right there in your pocket.
Need to know where to start with wholesaling? Just ask Alma.
Want a rough estimate on the ROI for a deal if you buy it at a certain price? Just ask Alma.
The possibilities are endless.
Key Features of Alma, the AI Real Estate Assistant
Alma is trained to answer various real estate investing questions ranging from analysis to general advice. Here are a few of the key features we recommend using Alma for:
- Property Valuation: Alma can provide accurate property valuations by considering factors such as location, square footage, and recent sales data. This helps users estimate the market value of a property.
- Rental Price Estimation: Alma can estimate rental prices for specific properties based on location, amenities, etc. This information is valuable for landlords, property managers, or tenants looking for fair rental rates.
- Neighborhood Insights: Alma offers detailed information about neighborhoods, including school districts and other relevant data. Users can gain valuable insights into the local area before making real estate decisions.
- Real Estate Investment Guidance: Alma provides guidance on real estate investment strategies, evaluating potential properties, financing options, and best practices for managing a real estate portfolio. Users can leverage Alma's expertise to make informed investment decisions.
- Deal Analysis: Alma conducts cash flow analysis for real estate investments, considering income and expenses, to determine potential profitability. This feature assists users in evaluating investment opportunities and identifying financially viable deals.
If you're not totally sure where you want to start when you use Alma, don’t worry DealMachine has you covered. We’ve integrated prompts that with one click can analyze the property, write scripts, calculate offer prices, find title companies, and more.
Although there are quick prompts, here are some other ideas of prompts you can ask it:
- What is the estimated value of this property?
- What strategy should I use to invest in this property?
- Can you provide me with information about the school district near the property?
- Tell me about my financing options for this property.
- How much should I offer for this particular property?
- What is the estimated rental income for this property?
- Can you tell me about any liens or encumbrances on a property?
- What are the estimated property taxes for this property?
- What are the property's zoning and land use regulations?
- How do I find cash buyers for this property?
You can also ask Alma more general questions to help you learn more about real estate investing such as:
- What are the different types of real estate investments?
- How do I find good real estate deals?
- How do I analyze a potential real estate investment? Think step by step.
- How do I finance a real estate investment? Include the pros and cons of each strategy.
- List some strategies for maximizing the return on my real estate investment.
- What are some common mistakes to avoid when investing in real estate?
- How do I best qualify renters?
Also, if you are new to AI here is a helpful tip: the more you practice with prompting the AI the better you will get at it. You’ll learn the best way to ask it questions and what way to phrase things to get the responses you want. At least that has been my experience when using AI.
If you have used Alma and have prompts that work for you be sure to tell us about it! Share your success on social media and tag DealMachine in your post.
How to Use Alma: A Step-by-Step Walkthrough
Now that we’ve explained the basics of what you can use AI like Alma for let’s do a step-through on how you actually put all that information into action.
Step 1: Open DealMachine
Open DealMachine on either your mobile device or desktop and then go to the “Leads” tab.
Step 2: Select a Lead
Click on a lead in the lead card. Alma will auto-populate, but if it doesn’t just click the glowing orb on the bottom right.
Step 3: Quick Prompts
Alma will pull up a few quick prompts to help you get started.
Step 4: Ask your own questions
If you don’t want to use the quick prompts you can ask your own questions. But if you used a prompt continue the conversation with Alma using another prompt or typing a response.
So now that you have this handy little guide explaining AI and how to use Alma aren’t you excited to try it out? The great news is if you are already a member of DealMachine and have a Pro account or above you already have access! But if you don’t you can check out more about Alma and easily sign up to start using it today.
Also, if you need more help with Alma you can check out these help articles written by our AMAZING Head of Product.
About Samantha Ankney
Samantha has been a media specialist for DealMachine for 1.5 years. She produces, edits, writes, and publishes all media that is distributed to the DealMachine and Real Estate Investing community.