homegenius
Creating an Innovative Ecosystem for Investors
By Carole VanSickle Ellis
When Tim Reilly, executive vice president of asset management at homegenius parent company Radian, talks about homegenius, he describes a company that is a product of decades of evolution in the single-family residential (SFR) space. In fact, said Reilly proudly, this emerging Radian brand is more of an “ecosystem” than a mere company, with a service line offering what the company refers to as “a new path for real estate’s future” via connecting people, data, and software to create comprehensive solutions.
The homegenius brand revolves around the idea that all “players” in a real estate transaction, homebuyers and -sellers, agents and brokerages, lenders and servicers, and real estate investors, all benefit from increased transparency across the board while conducting a transaction.
“Every client wants more data,” observed Rebecca Smith, vice president of business development for the asset management division of Radian. Smith has worked within the Radian family of companies for 15 years and in the real estate industry for 23. She continued, “We are always trying to consult with our clients, figure out the best ways for them to access and use data, and then leverage our technology to those ends. The breadth of data we have been able to acquire and meld across different venues to benefit mortgage and real estate clients is some of the best in the industry.”
Because homegenius is part of the Radian family, the company’s claim to “next-level analytics and insights” into market trends and home price estimates has a much firmer, deeper foundation than many of its industry competitors. Smith noted that during her early days with the company during and after the housing crash in the mid-2000s, most clients were focused primarily on rental rate trends.
“Naturally, they wanted to see what the cash flow in different investment properties and markets would look like,” she recalled. Demand was so strong that Radian enhanced its BPO (broker price opinion) product to include a rental addendum dedicated solely to serving this portion of the company’s clientele.
“We have been through so many iterations of the market and ebbs and flows over the last 20 years; we are well equipped to shift with the industry’s data needs depending on the scenario,” Smith concluded.
“Our clients’ data and technology needs are constantly evolving and changing. We are dedicated to evolving with those changing asks,” Reilly added. He recalled the early days of single-family residential investing, noting that the SFR real estate market was much more in its infancy than it is today and observing that homegenius data and analytics build on information gleaned by parent company Radian during those years.
“In the early days of the SFR market, investors were buying foreclosed homes that were not repaired, not rehabbed, not stabilized, and not easy to assess,” Reilly explained. “We managed our national distributive network of real estate brokers, agents and inspectors in order to provide educated, accurate assessments about what the after-repair price of a given property would be, how much those repairs would cost the investor, and how much that investor might make after the repair spending while simultaneously building our QC (quality control) process using real-time property transaction data to ensure that the best-like-listed and -sold comps were being selected by the agents who were pricing these properties.”
Reilly compared those early days of development under the fire of the foreclosure meltdown and subsequent financial crisis to a triage situation. Company experts would focus on individual properties to first understand the investment strategy associated with a set of repairs, then track the costs of those repairs, and finally conclude, months later, with an analysis of the repaired price of the property and how the repairs and other strategic decisions factored in.
“Fast forward to today and you do not see that uncertainty because there is not the same type of wave of foreclosures and distressed properties. We are in a more stabilized housing market,” Reilly said. He added, “We provide such sound insights today because [in the early- and mid-2000s] we worked hard to create technology, processes, and analytics to be able to understand property pricing and repair data and put it into our modeling in order to understand the entire life of the asset and investment.”
Today, the homegenius diligence and valuation platform powered in part by the latest OCR, SQL and RPA technology provides that same level of attention to detail and constant evaluation and reevaluation of data to clients interested in all types of real estate investments.
“These techniques enable us to serve build-to-rent communities, which are a relatively new asset class, as well as developers who may be working on products in markets with relatively few comparable assets in the area,” Reilly concluded.
“There is no question that the SFR space, including the build-to-rent space, is healthy, and there is still a lot of unspent [investment capital] in the market,” Reilly noted. “A lot of investors are still wanting to get into this space, and we are here to provide them with all of the information they and their teams could possibly need.”
Bringing Entire Teams Together & On Board
When Reilly and Smith talk about homegenius, they repeatedly return to the idea of many facets of an investment team working together with transparency to positive effect. This transparency has been a top priority for homegenius from the beginning, Reilly said, noting that investors and investment firms considering entering a new asset space often use the homegenius platform to get a clear, full picture of what their options really are before “jumping in” with a new investment strategy. This is particularly true in the build-to-rent sector, in which relatively few real estate investors have extensive experience but where there is an increasing amount of interest.
“We find investors look to us to help them with understanding how to approach a site for a build-to-rent community,” Reilly said. “Through homegenius, they can access services from real estate agents, property inspectors, and other real estate professionals. They can leverage our experience in understanding repairs, construction costs, site values, and cash flow to determine not only if a specific site is a good fit but also if another site relatively nearby might actually be better.”
Smith added, “There are so many things still forming and evolving within the build-to-rent space. The homegenius ecosystem is a good resource to understand what the investment options and the right processes on properties really are.”
She said one of her team’s top priorities is helping clients realize just how much potential they have in the current market. “There are so many times clients say to us, ‘Oh, wow! I did not realize you could do that or had this level of data,’” she said. “It just grows the number of inquiries we receive and the ways we can help clients grow.”
Over the years, homegenius has developed a myriad of processes and products to serve lenders, investors, consumers, real estate agents, and brokers across a vast swath of the real estate industry. In the process, the company has assembled an immense volume of data it analyzes in unique, customized ways for clients. “We haven’t sat on our laurels during the past 10 years since our involvement with the very first Invitation Homes warehouse line and subsequent securitization,” Reilly said. “We are constantly challenging ourselves to get better and better using technology and innovative techniques to power our business such as expanding services on our homegrown Pyramid Platform.”
The homegenius “pyramid platform” provides components for every aspect of any real estate deal, Reilly explained, and this makes the process of tracking performance as well as predicting it much more straightforward and efficient.
“A client could certainly go into the open market and find a property manager, for example, but then they will still need help tracking that manager’s performance or possibly locating services associated with evictions like cash-for-keys and tracking performance metrics there, also,” he said. “The industry has matured to the point that there are thousands of vendors offering different components of real estate investing. We consider it our role to bring all of those components together and make our clients’ lives a whole lot easier because they can see their portfolio as a whole, monitor different parts of transactions within their portfolio, and order specific services from agents, attorneys, title companies, and other professionals as needed.”
Creating Passionate, Powerful Partnerships
As the homegenius and parent company Radian have continued to evolve and grow, the outsized importance of corporate relationships with banking institutions both large and small has become increasingly evident.
“We have dealt with some of the largest banking institutions, capital markets banking institutions, private money lenders, and even foreign banks wanting to lend in the real estate space,” Reilly said, noting that parent company Radian’s adjusted pre-tax operating income for 2022 was roughly $1.1 billion, a 45% increase over 2021.
“These lenders want strategic, financially viable counterparties, and their involvement with us is an investment in the homegenius brand and evidence of their belief that we will be here in the good times and the tough times,” he said.
Smith added, “Our team is in this for the long haul. We are personally invested in this company daily, and our teams have commitment and shared passion.”
Reilly described his decades-long experience with the company as “the pride of watching a baby become an adult,” noting “almost everybody that started [about 10 years ago] is still here today.” He said proudly, “We have had very little turnover, and those employees have been able to see the evolution of the homegenius ecosystem evolve every day with a new thought, a new challenge. There is so much pride of ownership here, and that translates to a determination to remaining exceptional.”
SIDEBAR 1
Full-Service Capabilities Across Asset Management & SFR Diligence
The homegenius goal is to enable investors to effectively grow their portfolios, track and improve their profits, and identify new opportunities. To that end, the company has developed an array of technologies and systems to help clients do just that. “We overlay our industry-leading technology and first-of-its-kind AI with our expertise in SFR and trusted relationships,” said Tim Reilly, executive vice president of asset management for homegenius parent company Radian. Below, read about each type of technology and how real estate investors are using it today:
homegeniusIQ
“This tool is the industry’s first proprietary AI, image recognition and photo analysis technology,” Reilly said proudly. “homegeniusIQ’s cutting-edge models can identify and assess room type, room condition and more than 50 objects inside and outside of a home that impact its value, helping investors with breaking down the biggest barrier to automated real estate insights.” The company embeds this AI into many other technologies available to clients as well.
geniusprice
The Fitch-rated geniusprice AVM (automated valuation model) is powered by homegeniusIQ. “We use geniusprice to quickly and accurately price virtually any single-family property in the U.S.,” Reilly said, noting this AVM is the first-ever automated valuation to use artificial intelligence, computer vision and image recognition to inform a property’s estimated value.
geniuspricePro+
An interactive valuation tool powered by homegeniusIQ that allows users to review and select the best comparables aided by AI.
BPOs
homegenius BPOs leverage the company’s nationwide network of real estate pros and their local market knowledge to complete interior and exterior price estimates. “Our BPOs are the industry standard for purchase, securitization, market-to-market, servicing, and default transactions,” Reilly said. The company employs a “rigorous” quality control process combined with selective data and cutting-edge technology to optimize results and ensure the best comps for a property are used.
homegenius Home Price Index (HPI)
Using data based on the entire U.S. housing stock instead of simply sales pairs and/or sample populations, the homegenius HPI leverages powerful AI to provide users with details and insights on home price trends. “This is unmatched housing data,” Reilly said.
Due diligence platform
Efficiently monitor diligence activity all in one place with integrated valuations and reporting.
Pyramid Platform
Smart workflow management designed by professional asset managers to automate, organize, and customize every step of your asset management process.
Learn more at homegenius.com.
SIDEBAR 2
The HOA Pitfall homegenius Helps Investors Avoid
Roughly 40 million homes exist in “covenant-protected” communities, also known as neighborhoods regulated, to varying degrees, by homeowners’ associations (HOAs). Few investors are aware of the massive power wielded in some states by these associations. Depending on the state in which the property is located, an HOA may be able to regulate pets, front- and backyard design decisions, option to rent a property, and even how a property may be marketed for sale. Some also require property owners to permit them to screen potential renters.
Invasive? Yes. Illegal? No. Highly variable by state? Absolutely. That is where homegenius comes in for investors considering acquiring properties in HOA-regulated communities.
“So many investors do not realize how important an HOA (or lack thereof) is in terms of a property’s value,” Tim Reilly explained. “Banks may have different rules for how they will lend on properties in HOA states, and different types of HOAs can have dramatically different effects on property values. They also affect what types of repairs an investor will need to make on a property – sometimes by thousands of dollars, and they can affect insurance and carrying costs on a day-by-day basis.”
Particularly when it comes to new construction, HOAs are a part of most property owners’ lives.
“The details are our passion,” Reilly said. “We want to know what every aspect of an asset will look like from every angle, every single day.”
