RealtyMogul Sells Proprietary AI Underwriting Technology
The crowdfunding pioneer has sold a machine learning an AI underwriting tool to Hunt Real Estate Capital, GlobeSt.com has learned EXCLUSIVELY.
Crowdfunding pioneer RealtyMogul has sold proprietary machine-learning and artificial intelligence software to Hunt Real Estate Capital, GlobeSt.com has learned exclusively. The tool was developed for commercial real estate underwriting. It can comb through tens of thousands of transactions, and uses big data software to analyze the commercial real estate market. Hunt plans to use the tool throughout its commercial real estate lending business. The terms of the deal were not disclosed.
“We originally built the software to try and solve one of our key problems: we have had over 30,000 transactions submitted to us online, and we had to have a way to comb through those submissions and quickly identify transactions where we wanted to spend more time doing deeper underwriting,” Jilliene Helman, CEO of RealtyMogul, tells GlobeSt.com. “We also wanted to do this by removing personal bias from the underwriting process.”
The biggest benefit of the technology is its adaptability to different companies and platforms. Depending on an individual company’s needs, the software can provide essential insight into macro market trends but can also look on at the nuances of a single property to provide an investment thesis and analysis. “Technology does not have emotion, but you can train it via machine learning based on facts and patterns,” says Helman. “You can train the technology to look at patterns in cap rates and understand peaks and troughs, or you can train the technology to understand why a property in one market will look and behave like a property in an entirely different market. You can train the technology to find diamonds in the rough.”
Helman has been an early believer in CRE technology adoption, so it’s no surprise that she sees a future in which AI and machine-learning technology will have a significant impact on the real estate market. “I think it will dramatically improve the experience for both internal teammates and commercial real estate professionals around the country,” she says. “Rather than doing manual data entry and collection, the computer can aggregate data. Rather than waiting days or weeks for analysis, the computer can do the first round of the analysis in seconds.” Speed of information stands to benefit all stakeholders
Looking forward, Helman expects more companies to adopt machine-learning and AI tools. “In this new world, the analysis and conclusions from the machine learning tools will serve as the base case underwriting,” she says. “Rather than having analysts and associates debating inputs, we will be examining the technology outputs and debating where the technology may be incorrect and why to keep training it for the future.”
While RealtyMogul will continue to develop proprietary technology, as it has since its inception in 2012, this sale doesn’t shift the company’s primary focus and investment strategy as a crowdfunding firm. “We remain one of the largest crowdfunding platforms in the country dedicated to this and are continuing to invest through both our REITs and our private placement business for accredited investors,” she says.