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Technology

The Future of Technology

Incorporating Technology at Every Stage Can Have Significant Benefits By Patrick Burns SFR is a burgeoning sector set to outpace multifamily, office, retail, storage and hospitality growth in 2022. Most sectors of real estate have been a historically local and offline business, with investors specializing in specific markets and only utilizing neighborhood providers to facilitate transactions from start to finish. This means that there is a huge opportunity to introduce centralization and scale. Increasingly, SFR investors are not only looking to break out of local markets, but also buy multiple properties per month. This move from local to regional–or even national–brings with it a need to find a predictable, consistent, and scalable process to buy multiple properties at the same time. We have witnessed the power of technology-driven solutions to delight customers and increase efficiency across the mortgage industry. Now, SFR investors are faced with challenges of scale, centralization, and transparency. Technology can enable a level of simplicity that has never been seen before within the industry–and the benefits are seen throughout the entire end-to-end process. There are many ways technology can impact the real estate industry. But for now, let’s focus on the three key areas that can have a big impact in the world of SFR: sourcing, inspections, and title and closing. Sourcing Traditionally, sourcing meant finding an agent in each new market, and then providing that agent with parameters and a buybox for the types of properties an investor would want to acquire. While this method works to an extent, it can be laborious, as it requires the investor to commit significant relationship management with many individual agents across different markets. Today, there are new alternatives that enable the ability to buy entire portfolios and offer key insights. For example, marketplaces like Sundae and Roofstock act as aggregate sources of available properties across the country, and give investors access to valuable data. This data includes information on current leases, tenant details, and payment history, along with things like interior/exterior photos, 3D tours, floor plans, disclosures, inspection reports, title reports, and more. Access to this type of information allows investors to make confident buying decisions in multiple markets at once. In a hot purchase environment, this ability to move quickly and accurately forecast return on investment can give investors a key competitive edge. Inspections Until recently, inspections have also been heavily localized. The need to coordinate hundreds of inspections each month creates not only tedious labor, but also a fractured experience instead of a seamless process. New methods, such as those offered by Inspectify, offer a marketplace of inspections. Oftentimes, these tech-forward companies work in tandem with acquisition marketplaces. As a result, investors have access to structured, customizable data, along with a level of consistency typically unseen within the inspection process. Tech-based solutions to inspections introduce more consistency. Inspectify, for example, offers reports via API that can directly exchange information and inputs into your transaction process and pricing models–which can take weeks off the acquisition process. They also allow their customers to build custom templates, resulting in more accurate data and less risk. The SFR sector specifically can benefit from the national scale and cost savings this new type of technology can offer. Title and Closing One of the biggest challenges within the ecosystem of real estate transactions is the offline and localized nature of title and closing, which can be prohibitive to efficiency and scale. Companies like Spruce work closely with investors across model types–including rent-to-owns, sale leasebacks, and iBuyers–to centralize operations and unlock efficiency. By combining national accessibility, local expertise, and proprietary technology, Spruce empowers investors to accomplish multi-state strategies, or remote acquisitions, with a consultative approach. A particular issue for investors who are buying 50-100+ homes per month (in multiple markets) is easily keeping track of their closing pipeline. Receiving automated, accurate updates on file status––from search to post-closing––can be a gamechanger if you are used to chasing down this information from various local providers via email (or even phones). While real-time data is incredibly powerful, there is also the added benefit of historical reporting on how quickly deals are closing. Tech-enabled partners that offer nationwide accessibility can give your teams hyper-localized data, like title search turn times, in a particular county. For example, you generally cannot write an offer with closing in less than 21 days in Oklahoma because searches take more time there than average. Having this type of unique data at the outset allows you to forecast out your acquisition strategy and keep on top of cash management concerns. As large-scale investors start to build their own transaction management software, or track their deals in a CRM like Salesforce, working with a title and closing provider that offers a direct API integration can rapidly unlock efficiencies at scale. Kick off the title process with the click of a button, receive automated status updates, leave comments, and automate workflows all within your own system. 2022 is bringing an increasingly crowded SFR investment environment, with everyone from major capital providers to property management companies jumping into the market. This uptick in competition is coupled with a housing market that is historically low on supply. Continuing to incorporate technology at every stage of your acquisition lifecycle can have significant benefits, including a competitive advantage and faster scale.

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Mistakes in Manual Mode

Why Excel is Killing Your Lending Business By Erica Sikoski When just starting out in the private lending industry, it takes time to build up your portfolio of clients, partners, and service providers. Spending money right out of the gate on a new software solution seems like a far off goal. So, when new private lenders are starting and have limited resources, Microsoft Excel seems like the perfect software solution for all aspects of your business. At first glance, Excel is a well-known tool among employees and appears capable of managing your customer data, creating formulas for quick calculations, and keeping all information in one simple spot. Plus, it’s free! Perfect, right? It’s not that simple. When your pipeline grows, you will start seeing holes in this solution, your business will require more scalable tools, and there will be roadblocks where you should be seeing tremendous growth. If you are already at the point where Excel is no longer working for your organization or you’re a new private lender just getting started, consider this your push to find the perfect software solution now.  Here are three reasons why you should switch from Excel to a proper Loan Origination System. Common Excel Drawbacks Lack of Team Collaboration & Sharing Capabilities The ability for private lending teams to collaborate in Excel is very limited. Of course, the Excel file can be emailed back and forth, saved, and reopened by different users, but there is no real-time collaboration, as you cannot have more than one team member in the file at the same time. This also enables the Excel file to become outdated very quickly resulting in team members working off outdated information. Additionally, it becomes difficult to divvy up leads and clients when you’re working in Excel, as there can be overlapping messaging and missed lead opportunities. As hard as Excel spreadsheets are difficult to share internally, they are too easy to share externally. As opposed to a secure software that requires users to log in to gain access and only allow certain members to view full client information, Excel spreadsheets can generally be circulated to anyone by simply clicking the send button of an email. As private lenders are typically storing client and deal information in these Excel spreadsheets, this can leave your entire pipeline and leads list open for misuse.  It’s important to keep your clients as you’ve put in the work to earn them. Manual Data Entry Allows for Errors Excel can be used for a wide range of formulas and calculations, but all this data must be entered manually. Just entering and updating customer data becomes incredibly time-consuming and you’re opening the door to human errors. This human error can lead to costly mistakes. In 2012, JP Morgan lost over $6 billion in what’s known as the “London Whale” incident due to Excel spreadsheet errors. In this case an employee copied and pasted data from one Excel sheet to another but with notable errors that were not caught until it was too late. Don’t let your private lending business become another statistic like this. Scalability Once your business starts to grow, the Excel spreadsheets will need to grow as well. However, the bigger and more cumbersome the spreadsheets, the more likely they are to contain errors. Also, as your client base grows, it will become difficult, if not impossible, to track, make notes on, and conduct appropriate follow-up with these clients. This can lead to missed opportunities and dead files. You might have heard the expression “What got you here, won’t get you there” and running your private lending business on just Excel is the perfect analogy. With so many “all encompassing” software solutions and platforms readily available to the private lending industry, it’s important to consider which software features of Loan Origination Systems and CRMs (Customer Relationship Management) are crucial for your business to succeed in the long run. Important Software Features to Consider Cost & Implementation When purchasing any software, it needs to be viewed as an investment. Especially going from the free cost of Excel, the upfront pricing and subscription fees will be offset by the improved efficiency, productivity, and organization your private lending business will achieve. Compare the software solutions and make sure the cost of the service not only fits into your budget but will work with the size of your team and current workflow. Keep an eye on the differences between the number of users and features to ensure you’re getting the most for your team at a reasonable price.  In addition to start-up and subscription costs, consider the implementation and training costs as well. New software solutions always have a learning curve. Spending months learning a new software, even for the right price, can bring your business to a grinding halt. The missed months of business may not be worth the time spent onboarding your lending team. Remember, that software is an investment, and needs to be evaluated like one. Cloud-based & Integration Options Cloud-based software applications make life and business much easier, as everything is accessible to the entire team. When working on a loan file, instead of storing each document on different computer desktops, store the documents in the software itself which enables multiple people to work on the same loan file and share documents, client info, and lending terms all in the same platform. Additionally, keep an eye on which of the software providers makes their Application Programming Interface (API) public, which allows for the expansion of your possibilities to integrate with service providers, marketing platforms, and more.  Ask about the current providers each software solution is already partnered with and the process of integrating with any partners your business is currently working with. This includes credit and background solutions, appraisal management companies, referral marketplaces, etc.  Integrating disjointed software solutions is one of the most common challenges businesses are currently facing. Most applications are not connected with each other, resulting in little islands of data not easily

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Casting a Wider Net

Technology Has Made It Easier to Surface Auction Properties By Kathleen Lappe When you hear the term real estate auction, it is not surprising that your thoughts likely turn to desperate sellers or bank-owned properties, and rightfully so. During the 2007 housing crisis, auctions were an effective way to unload thousands of foreclosed properties, and real estate investors were able to snap them up at a significant discount. Today, as property values soar and technology has enabled people to shop for homes online and in a growing number of instances purchase them sight unseen, more sellers are turning to auctions as an efficient way to sell their home for the best price. Outside the U.S., auctions are a very common and accepted way to sell a home. Auctions create competition, they attract serious buyers and they provide certainty that the transaction will close on a specific date. With more owner-occupants choosing to go the auction route, auctions should be given the same attention in competitive markets as they are during a slow market. The difference is that rather than bidding on a distressed or bank-owned property, you are likely to see a wide variety of homes that fit your investment criteria. Many of the homes for sale via auction today are “conventional product” in the price range of $300,000 to $600,000, typically three- or four-bedroom homes in good school districts that would be easy to rent — i.e., the types of homes desirable to first-time home buyers or single-family home renters. Until now, auction listings were not easily accessible. Surfacing them required visiting multiple auction websites, connecting with industry professionals and searching real estate classified listings or county courthouses records. Today, they are available on DirectOffer.com, a real estate search website where you can find the broadest selection of traditional for sale listings along with listings from AuctionLook.com, the nation’s largest aggregator of auction properties, as well as a growing number of leading auction companies, such as Williams & Williams. The DirectOffer app is available to download in the App Store or Google Play so you can see new listings as they come available. How to compete in today’s auction market Just as technology is making it easier to surface properties being sold at auction, it also has influenced how auctions are conducted. Although live auctions still take place, virtual auctions have been growing in popularity for several years and accelerated after COVID-19’s stay at home and social distancing mandates put a halt to live auctions. Hybrid auctions, which combine a live auction with online participation, also are becoming more common. Online auctions take place in real-time like a live auction or span over a period of days or even weeks and start with a minimum price. In these multi-day auctions, participants have the opportunity to bid 24 hours a day, seven days a week, until the auction listing closes. Real-time auctions operate on a bidding countdown clock. When the clock expires, the property is sold to the highest bidder. But often, it is not that cut and dried. If no one bids after the time on the clock expires, the seller can then decide to take the traditional route to sell. This also gives the seller an indication that the price point of sale might be too high. However, if there are multiple bids within the last few minutes, often the sale will go into extended bidding. Extended bidding can be done in a timeframe that the seller picks, so if one person clicks to bid and another one does it within a minute, the auction remains open and bidding continues. For example, if an auction is set to end at 10 a.m., it actually might not end until 10:30 a.m., if many people are still bidding. The time schedule of one minute between bids before closing the sale needs to stay open until there is only one bidder within that time frame. This allows for a clear and defined winner. Whether you are buying in a real-time or multi-day online auction, the majority of the bids often come in the last two hours and sometimes down to the last 10 minutes, so being very diligent on watching the sale is important when participating online or via simulcast. You must have your finger on the button (think eBay). One way to avoid competition and losing a property in the final seconds at auction is to make a direct pre-offer. At the end of the day, the seller is looking for a certain price. The selling agent/auctioneer is required to present direct offers to the seller as part of their fiduciary responsibility as an agent of the seller. If you pursue this strategy, keep in mind sellers will not take pre-offers that are less than what a comparable market pricing analysis is suggesting. Read the fine print and go in prepared A real estate auction listing contains information on the property and starting or reserve bid price as well as important details about the auction itself, including required deposit, registration requirements, date of auction, appraisal, and more. Live, virtual and hybrid auctions require that all potential buyers register for the auction, and many will require a deposit prior to being allowed to bid and or a prequalification from the bank. Auctions require the buyer to do their own due diligence. Most auctions allow potential buyers to tour the property during a designated time period before bidding starts. Plan to arrive early if you are attending in person. It also is critical to talk with planning and zoning and do discovery on HOA rules in accordance with what is allowed before bidding, especially if the plan is to rent the property or to build. Most auction properties have ironclad contracts and when you start bidding you are agreeing to this contract. Therefore, doing your diligence upfront becomes extremely important. This is also the case when it comes to determining the value of the property. The bidding process generally quantifies the

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Real Estate Technology Today

Using the Power of Technology from Acquisition Through Disposition By Adam Stern There is a widely accepted principle called Moore’s law that states the speed of technology will double every two years, so to say technology is advancing at a meteoric pace is cliché. Technology is the backbone of turning a small business into a scalable enterprise and making processes and access to data easier and quicker. When talking about real estate and technology, it almost sounds like an oxymoron. Real estate by its very nature is slow. The development of real estate, whether you are talking about commercial, residential, industrial, or agricultural, is time intensive. Even as you move further up the value chain to building and transacting, real estate is an asset that does not move, literally and figuratively. Real estate technology, however, is an extremely interesting and captivating idea. It is in our DNA to want the pace and ease of the things that we do today to be faster and easier tomorrow. Think about the first computer. It was 50 ft long, weighed 5 tons, and required a team of engineers to operate. Today, we carry one in our pocket that is easy enough for a toddler to use and exponentially more powerful. Looking at real estate technology from a historical perspective helps us to better understand how both real estate and the utility of various asset classes have evolved over time. In lieu of making this short article a 10-volume dissertation, I will focus on technology in the residential housing sector. It is a substantial area that has seen tremendous innovation over the last decade, both on the retail “homeownership” side and even more so on the investment side. I can bifurcate this analysis across two segments; viewing a home as a place to live or as a vehicle to put capital to work. The Evolution of Technology Tech platforms have been around for a long time, and as peoples’ need to gain access to real estate information increased, so have their choices. Not too long ago, to get access to real estate data that was localized to a town or city, you would have to go to a real estate agent who had a book where the information resided. With the proliferation of the internet in the late 90s, websites such as Zillow, Trulia, Yahoo! Real Estate, Redfin and Realtor.com took the power of data and put it into the hands of consumers. This allowed anyone with internet access to search for real estate with ever increasing specificity. While real estate investing is not a new phenomenon, the popularity and accessibility of real estate investing platforms has allowed a larger swath of US investors to gain access to the asset class. In 2018, 6.7% of individual tax filers (about 10.3 million) reported owning rental properties. Platforms such as LoopNet, Crexi and Ten-X provide access to commercial real estate opportunities and deliver data in a more consumable way. The launch of these platforms has allowed investors to search for and find opportunities. Previously, locating investment opportunities took more time and research, and required having a network of connections to find off-market opportunities. Investing in larger, more complex real estate deals was relegated to professional investors and investment firms. Technology Lowers the Barriers to Entry As an off shoot from real estate search sites that democratized access to real estate data, co-investment sites have furthered the investability of real estate to investors with smaller sums of available capital. Websites like Propstream make it possible for private residential investors with comparatively small capital reserves to have access to extremely high-quality data which helps in both finding and analyzing potential investment properties. Websites such as Roofstock provide access to individual investment properties while also offering operational services beyond just the locating and transacting of homes. Other platforms such as Fundrise solve the capital constraint roadblock by allowing multiple investors to invest in a single property which is managed by a 3rd party. Along with services for the largest segment of investors in the residential housing market, which are individual investors that own just one property, tech solutions are being developed in higher numbers and in more nuanced ways, thus lowering the barrier of entry for many investors. Technology in Property Management In terms of property management, firms like Renters Warehouse and HomeRiver allow investors to manage properties through one firm across multiple markets, enabling investors to scale their real estate portfolios. New-age property management solutions such as Mynd have integrated mobile technology into property management solutions, making it possible to manage the marketing of a rental property, the scheduling of property visits and even the analysis of potential rental income available through a mobile application. More than any other facet of rental and investment property ownership, new tech addresses the “time and headache” factor of finding and implementing property management solutions, making it faster and more streamlined. Tech services such as Latchel are a bit different and more centered around tenant experience, allowing tenants to order services such as maintenance requests from their landlord, house cleaning and even furniture assembly services. Transactional solutions for the logistical challenges of closing on real estate have come a long way as well. Applications such as Spruce, which is a neutral third party that helps coordinate transactions between homeowners and their lender or real estate institution, have gained steam as the number of investors selling investment properties to institutional investors have become more commonplace. Document signing solutions such as Docusign and Dotloop are now a mainstay in current real estate closings, enabling investors and homeowners to sign documents from the comfort of their smartphones. Technology has enabled more people to intelligently choose markets, locate property, and close on homes in less time. Homeowners moving into their first or move-up home can now use sites to solve lifestyle-focused concerns such as school quality, proximity to restaurants, and availability of day care. Smaller real estate investors are now leveraging tech to gain access

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Tech Platforms

Technology is No Longer Effective When It Stands Alone By Peter A. Gudmundsson Parents of elementary age children will remember well the experience of sitting in a teacher conference and hearing that their child “plays well with others.” This early indicator of interpersonal behavior is a key predictor of later-in-life social skills that will determine career placement and success and emotional happiness with friends and family. Technology adoptions in real estate are similar. Systems and platforms that are designed to “play well with other” hardware, software, and people teams predict and predetermine successful outcomes and favorable metrics like return on investment, efficiency, and resident experience satisfaction. Hardware Most know that smart home automation devices can improve the asset performance of any real estate property. Locks, thermostats, controls, and sensors of various sorts can be networked to software in such a way to reduce costs, generate incremental revenue, and achieve better resident satisfaction. Since most real estate properties are developed, redeveloped, or refurbished in phased increments, smart devices may be sourced from different manufacturers, models, and technologies. An open API software platform should be able to work with most modern devices if properly architected. Of course, no software can make a dumb lock smart, but effective modern unified property management platforms should be backward and forward compatible with various devices. Ask questions from your vendors and make sure you are not going into a commitment to one source of locks, thermostats, or sensors for the life of the product. The lack of openness will not only restrict operating and financial flexibility, but it might also cause supply disruptions in these times of unsteady supply chains. One key element of smart device networking is using a technology that “speaks” many wireless languages. We all know the Bluetooth protocol because of our cars, ear buds, and smart phones, but there are standards like Zigbee, Z-Wave, 802, and others. Current devices and future innovations are likely to use one or more of these protocols so make sure your property management platform software “plays well” with multiple wireless technologies from disparate manufacturers. Software It is a fact of the current operating climate that most property managers and owners know that they should be thinking systemically about software platforms rather than discretely about point solutions. A point solution is a technology that solves only one isolated challenge rather than achieving the network effects of scale by integrating multiple solutions. For example, a property manager may decide on a new parking or gate entry management system to “solve” the problem of garage or parking lot access. Then, having purchased such a point solution, the property manager may discover that the access control is not synced with unit, common area, or property access. Another scenario is a maintenance management program may not interface with self-guided touring approval and access solutions. So, a potential resident may walk into a for-rent unit only to discover disheveled paint tarps and haphazard toolboxes rather than the home of their dreams. Thinking ahead is easier said than done, but with an open and dynamic property management platform that is known for its API flexibility and experience working with other solutions, you are less likely to find yourself stranded without connections to the rest of the workflow. Incidentally, API stands for application programming interface. It is code that joins and integrates different programs to work with one another. Many software vendors will claim that their APIs will connect to almost any other technology, but the savvy client will insist on the proof of experience and will test references. Sophisticated property managers will think through which vestigial point solutions should be maintained and which should be replaced. A series of tradeoffs must be navigated along a spectrum ranging from a “rip the band aid” approach (and go through the immediate but passing pain of replacing all at once with a unified property management system like BeHome247) to utilizing a “hedged” transition where some solutions are replaced, and others maintained either for a medium-term transition or indefinitely. A key criterion for selecting a unified property management platform provider will be that vendor’s ability to let you choose which systems to replace and which to retain. Of course, you must also completely seek to understand the interoperability of the vestigial point solutions with the new software. Like a fresh painting of an interior space, sometimes the newly painted rooms will make the unpainted old spaces look shabbier by comparison. So it is with technology, that you may not realize what value you were missing until you “take the plunge” with a modern replacement. People Pride is the first of the traditional seven deadly sins for a reason. Always be skeptical of a technology vendor that promises to work with every hardware or software. Unpretentiousness and intellectual curiosity are the virtues that must be evident for the best providers. Look for phrases like “that should work but let me verify” or “we did something similar for XYZ company, let’s make sure that will work for you too.” If a technology provider is willing to signal a bit of humility, take that as a good sign. That said, these deployments are increasingly common, and an experienced technology provider can be trusted if they have the experience, brand reputation, and quality personnel. Conclusion Playing well with others is more than a matter of the application of social graces. Today’s technology is no longer effective when it stands alone like a tree in an open field. The most effective deployments will integrate and operate with a diverse set of software programs, hardware items, and operating workflows. At times, you will have to adapt to a new reality, but a good technology solution will also do its best to fit to you and your unique circumstances.

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Uncharted Territory in Digital Transformation

Ready or Not, Be Prepared to Change and Adapt to New and Evolving Ideas By Mark Wai For years, prognosticators have been saying that virtually every aspect of the residential real estate industry, including real estate investment, is poised to be dramatically reshaped by emerging technologies. You’ve heard the buzzwords a million times: Artificial Intelligence (AI), Machine Learning (ML), Blockchain. What you’ve probably heard less of is an answer to a basic question: How much of this talk is hype, and how much is reality?  As you might imagine, the truth is a bit of both. What follows is a brief overview of which promising technologies every real estate investor should be keeping an eye on and what you can expect to see on the real estate technology horizon in the years to come. Let’s talk about the failures, the successes, and the uncharted territory we are approaching in the digital transformation of our industry. The Failures First and foremost, let’s be honest: they’re called buzzwords for a reason. It sounds snazzy to say “AI” or “Blockchain” in a press release—but doing so doesn’t necessarily mean you’re putting those technologies to good use. And too many companies have exaggerated what they say about their tech in order to create buzz and good PR. You can understand why that has happened, because these technologies are easy to get going, and appealing to talk about, but incredibly hard to get right. That’s true for everyone in the industry, from sole-practitioner property investors to the biggest players in the game. There are plenty of AI, ML, and Blockchain vendors and off-the-shelves packages in the market today that are eager to help companies start their AI projects — for a fee, of course. One of the biggest tech companies in the real estate space recently disbanded its AI/ML-based home buying business because its algorithms could not accurately predict the right price-points of a property — both in buying and selling. Despite investing millions of dollars and hiring the best and brightest data scientists, the reality simply didn’t match up with the buzz. Millions of dollars were wasted, and huge opportunity costs were lost. Examples like this demonstrate that despite what you might have heard from the hype machine, the industry is still learning how to implement these technologies effectively and efficiently. If one looks at the history, each major technology takes time to mature, especially in the real estate industry which involves so many different use cases and participants, coupled with a high level of complexity and a lack of existing technology standards. The Successes Make no mistake, though: extremely useful applications of emerging technologies are already being deployed throughout the industry. Below is a snapshot of some of the more interesting and relevant tech innovations to enter the market in recent years. Investors who stay on top of developments like these will have a major competitive advantage in the years to come. Artificial Intelligence to determine the condition of a house. A discipline of AI called computer vision, which underpins technologies like driverless cars and your phone’s facial recognition functionality, is driving major change throughout the real estate industry. By analyzing and gleaning insights from real estate listing photos on a massive scale, computer vision can help a wide variety of real estate market participants save time and make better, more informed decisions. The applications of this technology are numerous, from facilitating faster and more accurate valuations, to better home search experience, and to providing investors with actionable intelligence on the state of their portfolios. Blockchain to secure highly sensitive financial data. Blockchains are permanent digital records that cannot be deleted or changed, which makes them incredibly useful for storing and transmitting data without third-party involvement. For real estate investors, that means removing intermediaries between contracting parties, establishing reliable records of ownership, reducing turn-time, and substantially reducing transaction risks. Blockchain can also expedite the contracting process and reduce costs. Innovative solutions to reduce home-buying friction points. Creative new applications have greatly enhanced the efficiency of many elements of the home buying process, from scheduling showings to notarizing documents. These may seem like minor advancements, but when you reduce the time and friction involved in something that happens millions of times per year, the entire industry benefits. The Uncharted Future Looking towards the future of what is possible, technological developments in the real estate industry will fall into either of two major categories: atomic innovations and holistic innovations. Atomic innovations refer to standalone products or applications that are designed to solve a specific problem, like notarization, showing a listing, underwriting, decisioning, document digitization, e-closing, e-signing, computer vision, biometric authentication, and so on. Holistic innovations are changes that affect the entire end-to-end user experience as a starting point of design. In the next few years, we will likely continue to see many atomic-level innovations, especially because that is what the structure of the venture capital industry most readily supports. This will typically mean individual startups creating discrete new products, rather than wholesale transformations. Holistic innovations, on the other hand, will be much harder, further off, and mostly reserved for larger companies that can support major long-term investments. These are difficult and costly—but when they happen, they will be transformational. The bottom line is, we must be prepared to change and adapt to new and evolving new ideas, because they are on their way to disrupt our industry whether we are ready or not. The past two years have showed us that a once-in-a-lifetime event like the COVID-19 pandemic can also play a very big role in changing and accelerating the use of technologies in real estate. Those who are ready and willing to embrace new innovations will benefit from them the most.

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