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Artificial intelligence (AI) has been around for decades and used in a variety of applications.
However, over the last few years technological advances have meant that AI is increasingly becoming more and more a part of everyday life. Yet, since its introduction towards the end of 2022, ChatGPT has further revolutionised the efficiencies of doing business and will likely have a profound effect on the way multifamily and/or BTR-SFR syndicated investments are handled.
What is ChatGPT?
ChatGPT is an AI language processing tool developed by OpenAI which aims to, for example, make work processes more efficient and, thereby, become an invaluable resource for real estate professionals in multiple aspects of their business.
How does ChatGPT work?
ChatGPT is one of the biggest language models in existence and is able to deliver real-time responses to questions, requests and prompts in human-like language. It’s pre-programmed with a truly huge amount of data and has multiple language functions.
The individual words of a request or question are analysed and fed to the transformer part of the neural network of ChatGPT. This then processes information much like the human brain, before ChatGPT generates a response.
The tool is capable of a wide variety of language tasks, including generating, completing text and translating text, conversing, answering questions and summarising content.
It’s important to be specific with a request or question when using ChatGPT such as telling the length of the response and the tone. It is also possible to ask ChatGPT to amend the responses based on specific parameters.
Current limitations of ChatGPT
To date ChatGPT, whilst accurate, is not perfect and it is still necessary to review the content it delivers for accuracy.
This aside, the biggest limitation for real estate professionals is that ChatGPT is based on historical data that existed in 2021 and, therefore, can’t, for example, present market data from 2022 or 2023. Real estate markets fluctuate, with regular changes as some markets boom and others remain flat or see some price declines or interest rates change so the market infraction in ChatGPT cannot be relied upon.
However, there are many other uses for ChatGPT in CRE and multifamily and/or BTR-SFR syndicated investing; let’s take a look at some of them…..
Primary ways ChatGPT can be used in CRE and multifamily
Facilitate tenant communications
Usually with some limited editing, ChatGPT can help write friendly and professional emails to communicate with tenants or short-term guests staying in your properties.
This may include welcome letters, checkout instructions or visitor guides or to write other communications with tenants, such as a new landlord introduction, sale of property notice, notice to vacate, notice of rent increase, late rent reminder, excessive utility usage notice, and so on. ChatGPT can even draft a preliminary lease agreement, even though it will still be necessary to have lawyer review it;
Sort property management tasks by priority
For a property manager managing multiple properties, ChatGPT can help work out what needs to be done first. It can be given a list of, say, urgent maintenance problems or undertake a review of property management fees; not only will it prioritise them but can also explain its reasoning behind the prioritisation choices;
Generate marketing content and ideas
ChatGPT can help with tasks such as generating a name for a project or writing social media posts and blog content. However, there is still some need for input and fine tuning as it may simply deliver, say, 5 generic versions of the same thing. On the hand, specific requests for 10 topics on this multifamily related subject or 20 on BTR-SFR, ChatGPT will produce.,
It can also play a role in search engine optimisation by creating and optimising content for websites. For example, if you tell ChatGPT to “write a 1000-word blog post about how to add value to multifamily properties” it can do this in far faster time than starting from scratch. Also, it can optimise already written the content site or rewrite something with a different tone or emphasis;
Undertake market analysis
Multifamily and/or BTR-SFR syndicated investors rely heavily on market information from a wide variety of different data sources, whether rental data, unemployment information, income and housing data or property tax information.
For example, ChatGPT can be used as a starting point to compare markets (pre-2021 identifying cities with lower rent-to-price ratios or the lowest property tax rates.
Whilst ChatGPT will deliver a list of factors to consider which can be helpful information for investors, clearly, it leaves the decisions about selecting an investment market for the real estate professionals managing the syndication.
Preparing property listings and answer client questions
Another way in which ChatGPT is saving real estate agents time is by devising property listings in only a few minutes, provided the input information is detailed enough.
Other property professionals can also use ChatGPT to answer client questions such as finding details of mortgage payments or researching transport links districts for a particular address, for example;
Reviewing housing or short-term accommodation regulations
Instead of taking time trying to sort through information on local government websites, ChatGPT can do this for investors. For example, short-term rental ordinances are usually lengthy and packed with legal jargon but ChatGPT can be asked to summarise housing laws in different locations so you can easily digest the information.
Provide resource recommendations
After giving ChatGPT a list of resources of features required, it can be asked to recommend the best or the cheapest or the most popular. The has application across a wide spectrum of real estate related matters such as property or asset management, or multifamily syndication when looking for contractors or suppliers or preparing a schedule of works for a renovation project or helping to assess cap rates.
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CPI Capital firmly believes that improving efficiency requires embracing new technology which, in turn, leads to improved investment returns for our passive investors.
ChatGPT is a game changer, not only for the multifamily and/or BTR-SFR investment actors of the real estate industry, but the way real estate professionals such as CPI Capital work. And ChatGPT can only improve in time!
COO, Co-Fnder CPI Capital