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PlanOmatic 3D Tours Increase Single-Family Rental Property Leads by 25%

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PlanOmatic Measured the Impact of 3D Tours on Single-Family Rental Property Marketing in Partnership with a Leading Provider of SFR Homes Nationwide PlanOmatic, the biggest and fastest provider of Property Insights and marketing services for the single-family rental industry nationwide, announced the results of its test that measured the impact of 3D tours on single-family rental property marketing. The test was conducted in partnership with a leading provider of single-family rental homes nationwide. PlanOmatic’s test data found that property leads increased by 25 percent, and days on the market decreased by 23 percent when a 3D tour was used to market a property compared with only using professional photography. PlanOmatic’s test tracked more than 162 of its partners’ properties across three markets—Indianapolis, Memphis, and Dallas. PlanOmatic created 3D tours for each property utilizing new Ricoh Theta Z1 cameras, which produce the most visually accurate 3D tours and models on the market today. PlanOmatic formed a test group by adding a 3D tour alongside professional photography, alternating between Matterport 3D and Zillow 3D, to the property listing online. The test group was compared to a control group that used only professional photos to market the property, and the activity was monitored between February 8 and March 26th. “Most home searches start online today, and this has changed the way in which single-family rental properties are marketed,” said Kori Covrigaru, co-founder and CEO of PlanOmatic.  “Digital tools such as 3D tours allow a consumer to visualize a home without having to step foot in it, and the data from our test proves that single-family rental properties that are marketed with 3D tours online result in increased consumer leads, and fewer days on the market. Consumers are demanding 3D experiences online and prioritizing properties with 3D assets.” With a network of hundreds of contractors across the country now equipped with Ricoh Theta Z1 cameras, PlanOmatic is now the largest and fastest provider of 3D tours and digital floor plans to single-family rental investors, owners, and operators nationwide. PlanOmatic provides 3D tours, floor plans and property insights for properties nationwide within 48 hours from the time an order is placed. About PlanOmatic PlanOmatic is the biggest, fastest provider of Property Insights, 3D tours, photography, and floor plans for real estate nationwide. The company’s full suite of property insights and marketing services allow single-family rental (SFR) investors, owners, and operators to make fast, accurate and well-informed decisions throughout the property life cycle, including acquisition, renovation, and leasing. With a vetted network of hundreds of professional contractors across the country, PlanOmatic ensures SFR investors, owners, and operators receive all orders within 48 hours. For more information, visit www.PlanOmatic.com. Kori Covrigaru is the Co-Founder and CEO of PlanOmatic, the biggest, fastest provider of Property Insights, 3D tours, photography, and floor plans nationwide. With an unwavering determination for client success, he has created a team that thrives on the core value of “together we win”. With a national network of 200+ contractors and 40 employees, Covrigaru has met the moment with the unique value proposition PlanOmatic offers through technology combined with data to support their clients’ goals. 

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Technology Continues to Transform Commercial Real Estate

The Move from Backgammon to Chess By: Ira Zlotowitz, Founder & President, Eastern Union Everyone who’s been associated with the commercial real estate world over the past 20 years or so has seen technology steadily establish itself within virtually every corner and crevice of the industry. Here are some thoughts and perspectives on the impact that technology has had upon our sector. Some of you may recall Defense Secretary Donald Rumsfeld in 2002 as he discussed factors leading to the Iraq war. The Secretary drew distinctions between “known knowns,” “known unknowns” and “unknown unknowns.” When it comes to our business, technology has essentially transformed commercial real estate from a game with “some knowns” into a game with “all knowns.” Not too long ago, some people knew the facts. Today, essentially, everyone knows the facts. From Backgammon to Chess Our industry used to be a little like backgammon, a game of strategy and luck, where there are both knowns and unknowns. Now our world looks a lot more like chess. We are playing a transparent game where everyone sees very move. There’s no luck involved. There are no unknowns. Who has been taking all of the unknowns off the table: Companies like Actovia, the provider of commercial and residential real estate property, ownership and mortgage data; Reonomy, which analyzes “millions of records to provide the most robust records for every commercial property and owner”; or TEN-X, the “end-to-end transaction platform” that matches buyers with properties that “align with their investment goals.” These tech vendors can tell us just about everything we need to know about an asset in a newly transparent marketplace whose culture has steadily become fairer and more open. And as we survey this newly opened-up landscape, and as we contemplate the long-term impacts of technology on real estate, there is at least one looming fatality: the off-market deal. The Off-Market Deal Why would an owner choose to handle a deal off-market? Typically, the seller initially did not want everyone to know of his or her intentions. Sometimes, such deals would involve a seller who wanted to offload an asset quickly and quietly. But sometimes, off-market sellers also did not have a strong handle on the true value of what they had to sell. If you’re only asking three or four brokers for price offers, you’re not getting much of a read on the asset’s value as assessed through the eyes of the marketplace as a whole. That’s why buyers would often do well in off-market deals. Nowadays, since we are all playing a transparent game of chess, there is little point in keeping your deal off the market. Why do it? Everyone is going to find out anyway. You might as well have the broadest market look at your deal. Now, the entire buyer universe has a chance to chime in on price—and it will. Off-market sellers will no longer run the risk of selling a property below its true value. The price will be vetted by the wisdom of the overall market and final prices will more closely reflect the asset’s true value, unlike during the off-market era. If all brokers have uniform access to just about all the asset information they could want, then what must brokers do to distinguish themselves? What must they do to deliver value to the client? In this market environment, mortgage brokers will often mainly be competing based upon their ability to deliver the lowest cost of funds to the borrower. Unsurprisingly, just as tech has universalized access to property info, it has also enabled mortgage brokers to compile longer lists of lenders. Thanks to this larger array of financing options, brokers are better able to secure financing at a competitive rate. Broaden Your Horizons Another big effect of technology’s rise has been the expansion of the pool of available buyers. In the pre-IT days, as a practical matter, sellers used to only be able to deal with buyers in their own neighborhood, city, or state. Today, technology has broadened sellers’ geographical horizons. Indeed, one of TEN-X’s marketing assertions is that it will find you overseas buyers. Another way technology has brought more buyers and investors into the picture has been through crowdfunding platforms. There are people out there with money to invest who had never before considered commercial real estate as an option. Crowdfunding facilitates the process of stringing together a de facto syndicate of buyers, including first timers. Smart companies are presently leveraging IT resources to help build databases of investors capable of bringing new caches of equity to the table. In addition, today’s smart brokerage firms are not shielding their technology assets behind a shroud. Instead, they are going out of their way to open-source their corporate tech resources with their customers. At our firm, for example, we offer clients a free, mobile-based platform that’s downloadable to a Smartphone—and enables buyers, lenders and brokers to fully underwrite a transaction, all in the palm of their hand. It’s also useful to remember that as tech-driven efficiencies penetrate more and more deeply into the broker’s milieu, these same efficiencies are also arising among clients. New and interesting technologies are also being embraced by buyers, lenders, and sellers. The industry as a whole is getting more efficient. All established brokerage firms today are using technology—enhanced by artificial intelligence—to match borrowers and lenders, buyers and sellers, and landlords and tenants. In the investment space, inefficiencies within the deal-making life cycle are being steadily eliminated. Naturally, there will be a human resources impact. With brokers closing more deals in less time because of their increased speed and efficiency, brokerages will inevitably need lower headcounts to get the same amount of work done. Maximize your productivity, your profitability and your competitive advantage by maximizing your mastery of technology. It’s one of the great “known knowns” of our industry.

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Three Distinct Quarters Tell the Story of a Resilient Housing Market

Differences Between Pandemic and Great Recession By: Steve Gaenzler, SVP, Data & Analytics, Radian One year ago, it would have been nearly impossible for prognosticators looking ahead to fathom what was to beset the U.S. in 2020. A worldwide pandemic with terrible human loss, record low unemployment rates flipped to record highs in a matter of weeks, 30-day mortgage delinquency counts shooting to a level higher than the peak of the Great Recession, and equity markets that lost almost half of their value only to roar back to near pre-pandemic levels in less than six months. Like watching a professional tennis match, the ups and downs have been dizzying. And all the while, U.S. residential home prices have appreciated without pause as demand continued to outpace supply. We have been tracking the U.S. real estate markets using the Radian Home Price Index (HPI). Provided by Radian’s subsidiary Red Bell Real Estate, the Radian HPI measures changes in real estate markets more quickly and with more granularity than any other measure. It has provided evidence of three very distinct housing market quarters. The first three months of the year were strong for the housing market. Then as the pandemic took hold and lockdowns were implemented nationally, home sales activity was curtailed substantially.   From April through June the U.S. recorded much slower home price growth. But the third quarter of 2020 showed evidence of a dramatic recovery and a clear return to the faster price appreciation rates reported at the end of 2019. Amazingly, with all the financial challenges this year, home sales activity will end 2020 as the highest year ever recorded, and home prices will have continued to climb.   This was made possible through the confluence of events new and old. For those dealing with loss of job or income, the mortgage forbearance and eviction moratorium programs that were quickly put in place have kept people in their homes—a critical difference from the last financial crisis.  Direct payments to small businesses and consumers distributed aid more quickly and to those in need without an intermediary, also a change from the Great Recession.   But longstanding supply shortages and an increase in demand for low density (i.e., suburban) single family homes were met with historical lows in mortgage rates. In the first three quarters of the year, the Radian HPI has risen at an annualized rate of 7.4 percent, which was higher than the increase of 6.4 percent recorded during the first nine months of 2019. During the third quarter, national home prices increased at an annualized 8.9 percent, which outpaced the 6.8 percent annualized gains during the second quarter, when home price gains were positive, but more subdued. In fact, construction and supply shortages were made worse all over the country by pandemic related demographic changes. For example, with so many children moving back home with their parents, the supply of newly empty-nester homes typically added to the market has shrunk considerably. Over the past decade, on average the supply of homes on the market in the summer is about 25 percent higher than the winter lows of supply. This year, however, the summer market was only 8 percent higher, meaning more than 165,000 homes that would have typically been for sale, were not.    So, what can we expect for the balance of the year? The Radian HPI should offer a few clues soon. Unlike legacy indices that offer a picture with considerable time lag, the Radian HPI produces results just 15-days after months-end, making it the most responsive measure of changing patterns. And the Radian HPI is also more granular. Micro-market indices provide a view on markets all the way to the zip code or neighborhood. When overlaid with property attributes such as bedrooms or square footage within a micro market, the Radian HPI provides an even better look at trends that might tell us what is happening on the ground.

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2020: The Year of the Platform

How “proptech” innovators are transforming residential real estate Although early innovators such as Zillow have been around for almost two decades, the full impact of the internet on the real estate industry has come into focus in just the last few years. Dozens of new VC-backed companies have come online and are challenging existing business models. A new type of company called an “iBuyer” (e.g., Opendoor) offers homeowners a new way to sell their houses. This new approach is fast and easy compared to traditional methods of selling real estate. Companies such as HomeLight, which started as a “smarter” way to find a real estate agent, have expanded to offer iBuyer and cash buyer options via partnerships with companies like Opendoor. In addition, they’ve added several related services, including mortgage, title and—in a few states—escrow. HomeLight, for example, saw an opportunity to expand from a point solution to a platform that could offer a better client experience and capture more revenue through the entire real estate transaction lifecycle. The advent of service platforms like HomeLight is transforming the real estate landscape by offering consumers ease, convenience and exceptional experience. Rather than contact a single agent or cash buyer, homeowners can now work with a single platform provider that can assess their needs and offer the best combination of services to create the desired outcome. How did we get here? Three big trends have reshaped residential real estate as we enter this new decade: The digitalization of real estate, including big data and property technology (proptech). iBuyers & Instant Offers, which offer sellers a quick and easy way to sell. The evolution of Zillow, which has evolved from online ads to instant offers to a complete platform. Let’s examine how these three trends are building blocks for the new age of residential real estate. Big Trend 1 Digitalization: Big Data and Proptech It used to be that only the real estate pros had access to data related to properties and home sales. Consumer access to data forever altered real estate as Zillow and other websites opened the doors to data that was once locked in local MLS systems and county data repositories. Later, new proptech companies like HomeLight began to collect and analyze agent performance data in order to offer consumers a smarter way to identify an agent. Proptech empowers home sellers and buyers by adding intelligence (algorithms, etc.) to the massive amounts of property and transaction data available. Big Trend 2  iBuyers and Instant Offers For many years, homeowners who wanted to sell a house retained a broker or agent and put the property on the market (MLS). If the house was in rough shape, the seller could sell off market to a local real estate investor. These retail (agent) and wholesale (investor) markets satisfied the needs of a wide range of home sellers. Then, along came the “iBuyers”—Opendoor in 2013, Offerpad in 2015 and Zillow Offers in 2017. They transformed the real estate industry. iBuyers blurred the lines between the retail and wholesale worlds, making it possible for a seller to get an immediate cash offer that is “close to retail” but also fast and easy. Interestingly, iBuyers are not usually direct competitors with investors. iBuyers typically don’t want homes that need a lot of repairs. Their core value proposition is to offer an alternative to selling the traditional way with an agent (by eliminating the need to find a buyer for the current home before looking for a new home). Big Trend 3 The Evolution of Zillow When it launched 16 years ago, Zillow was an exciting new real estate portal that gave brokers and agents a compelling new way to market properties and connect with clients online. The company added rental searches in 2009. Soon Zillow replaced the real estate information on the websites of online newspapers and portals such as Yahoo, AOL and MSN. Zillow’s biggest competitor was Trulia, which it acquired in 2015. When Zillow Offers launched in 2017, it sent a wave through the real estate industry. Agents began to question whether Zillow was friend or foe. Zillow further expanded its consumer services in 2018 by acquiring Mortgage Lenders of America and began to offer home loans to consumers. As Zillow evolved, other players in the industry felt pressured to evolve as well. To compete with Zillow, it was no longer enough to offer only retail brokerage because consumers were now aware of the iBuyer alternative. As a result, brokerages such as Keller Williams, Realogy, RedFin and eXp Realty have all rushed to provide an “Instant Offer” alternative, especially in major markets served by Zillow Offers and Opendoor. Pairing an Instant Offer with a Listing Agreement has become table stakes in our industry. Where Are We Now? 2020 marks the culmination of almost 20 years of digital evolution in the real estate industry. In the past, residential real estate was characterized by many individual players who performed individual services such as buying homes, listing homes for sale, providing home loans and transaction processing. Today, many of these services are being integrated to create more comprehensive solutions for real estate consumers. While the home seller or buyer now has mountains of data and a multitude  of new ways to sell or purchase a home, this evolution has created a new problem for the consumer. Namely, it’s confusion that comes from having so many options to consider, combined with a relatively complex underlying process. Integrated Service Platforms Because they now have so many options, consumers often are not sure where to start or which options are the best fit for them. One way that our industry will address this issue is through residential real estate platforms. HomeLight is another example of a company that has evolved from a single-service provider into a complete service platform. From its beginning as an agent referral service, HomeLight has added iBuyer and investor options (via strategic relationships), plus a number of complementary transactional services such as mortgage, title and

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Commercial Real Estate is the New Liquid Asset

The blockchain and “tokenization” of CRE are taking off, bringing new liquidity to a traditionally illiquid asset class. By Aaron Lohmann As every seasoned CRE investor or lender knows, getting into a CRE investment requires significant due diligence and paperwork. Exiting an investment can be difficult if a recession strikes or if a property is outdated, poorly located, oddly configured or has other issues that limit cashflow and marketability. In fact, the illiquidity of investment real estate is why some investors stick to stocks and bonds. With the potential to digitize and accelerate the CRE investment process, blockchain technology is poised to transform CRE finance. The blockchain not only stores transaction data in an immutable secure digital environment, but it can also support securities regulatory compliance. Blockchain Comes of Age Blockchain technology has been available for nearly a decade, but it is only now beginning to emerge as a major CRE industry disruptor. It originated as a means of backing cryptocurrencies by providing an indisputable record of ownership, which happens to be a very valuable capability for CRE financing too. As the name suggests, a “blockchain” is a database of digital blocks of transaction data, each block timestamped and connected to the previous block via secure programming. Each data block is highly secure and impossible to alter or erase, making blockchain an efficient way to store transaction documents such as property deeds, mortgages and shareholder agreements. Think of blockchain as a digital ledger. But instead of the digital ledger belonging to a single server and a single owner, it is replicated and stored on multiple servers all networked together. When a new data block is added to the chain, all the server nodes automatically update themselves to maintain identical copies of the ledger. For example, if you used the blockchain and cryptocurrency to sell a CRE investment to a different owner, all the transaction data would be recorded in the blockchain ledger. So, there’s no human argument about who owns what share of a property or who has the final version of paperwork. All the transaction information is securely recorded and can’t be altered. How is This Possible? From its earliest days, blockchain technology has been advanced by software developers around the world. One important advance was the development of the digital security token, in which the token is programmed to represent a share of a debt or equity instrument. In recent years, software developers using the Ethereum blockchain platform created standards for a new kind of token that can be used to execute investment transactions in compliance with securities regulations—a major advantage for the CRE industry. While many advocates of the blockchain have recognized its potential  for different kinds of financing and investment, securities requirements have been an obstacle in the past. Today, technological advances make it possible to use a blockchain-powered platform to buy shares in CRE debt and equity instruments and trade them just as you trade stocks and bonds—and completely in compliance with securities regulations. Specifically, Ethereum or possibly other blockchain platforms can be used to create security tokens that represent ownership in some kind of asset or interest. In the case of CRE investment, a security token could represent a 100% or fractional ownership interest in a CRE debt or equity investment instrument and would replace paper documentation of the ownership interest. And a token can have a built-in smart contract that will accurately execute the terms of the ownership stake. Tokenization in Action Imagine a partnership wants to raise $7 million in equity to build a senior housing community. It lists the project—and its associated market volume, current price, project location, market cap and more—on a digital platform backed by a blockchain. As an investor, you use U.S. dollars to buy digital tokens representing shares of equity in the senior housing project. The token assigns ownership to you, just as a paper certificate represents the shares of stock that belong to the owner of the certificate. That is, your legal rights and responsibilities are embedded in the token in the form of data. Then, all information about the transaction is recorded on the blockchain. Since the blockchain is an immutable public ledger, no one can ever argue with you about your equity stake in the senior housing project. And your digital tokens are programmed to include “smart” contract functionality that automatically distributes funds from the partnership building the senior housing community to you, a token holder, as the project advances. Over time, you may decide you’d like to exit the senior housing investment. The beauty of security tokens is that, being digital, they can be easily bought, sold and exchanged—just like stocks. No more waiting around for the lawyers, appraisers, notaries, lenders and everyone else to do their part. Tokens with built-in smart contract capabilities will take care of all that and generate real-time auditable records that reinforce trust. In Contrast… Tokenization creates something that has never existed before: a secondary market for CRE investments. Traditionally, an investor receives a partnership or membership interest in the entity that owns or is developing a commercial property. Assuming the property produces rental income, you receive monthly or quarterly distributions. If you have an equity interest, you receive—ideally—a return on your investment when the asset is sold or refinanced with a permanent mortgage. Either way, in traditional CRE investing, the investment is extremely illiquid. If you want to exit the deal, you need another investor or the project sponsor to buy out your shares by negotiating terms and entering into a contract. You may need permission from the managing partner of the ownership entity, and you need to submit paperwork to a transfer agent. It’s a lengthy process that can take weeks or months, involving endless emails, conference calls, documentation and constant confirmations. Streamlining Across the Middle While CRE will always have actual humans performing some transactional roles, investors trading tokens on a blockchain-based trading platform will have fewer reasons to call a lawyer or a

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