Context

Real estate is a tricky game for technological change for two reasons:

As interest rates rise, there’s generally less inventory on the market for homes and commercial assets. Because cost of construction is also high, the barrier to entry to being a landowner is much higher, and therefore, there’s less need for AI automation.
Historically, there’s been a bifurcation where founders and investors in proptech - those who come from real estate and finance, but don’t understand technology, and those who understand technology, but not the intricacies of how these stakeholders operate. While this is true in other industries, the power dynamic is generally in favor of non-technologists who are really good at sales - essentially the ones who can “sell ice to Eskimos”.

Pitfall Ideas

Check out my other blogs for deep dives into what I think are pitfalls in this space:

Most B2B Proptech Companies are not Venture Backable

Brokerages and REITs are not Venture Scalable. AI Platforms can be.

I won’t go into much detail here, but generally, these are business models that will generally fail to scale massively:

Selling software into a brokerage, REIT, or property services business. To your customer, tech is a sunk-cost that they don’t understand. Given most of these business owners are 50+ years old, it’s hard to sell something to them that they don’t understand or can see an immediate ROI in.
Building a tech-enabled brokerage like Compass or Side. To complete real estate sales with consumers, you need a front-person. That person will invariably be a real estate agent that needs to have a high-degree touch point with their prospects. Because the entire industry is commission-driven, the degree of difference between having a SaaS motion and being a brokerage is nominal. The most challenging and costly part here is recruiting, which can’t really be automated today.
Selling fractional real estate assets. The problem here is high churn. Any sophisticated investor or investor who eventually becomes educated will start making their own investments through their own REIT or personal portfolio because it’s far more cost-effective and provides more flexibility and control over the holding period for the asset, investment strategies, and title ownership.

Interesting Areas to Explore

Supporting Real Estate Investors

AI agents can streamline real estate investing by automating deal sourcing, underwriting, and property management. These agents can identify high-potential properties from MLS, off-market listings, and foreclosure data, and perform instant deal analysis using configurable assumptions. Additionally, AI-powered leasing and maintenance bots can handle tenant communication and reporting, making the investor's workflow more efficient. This creates a fully automated platform for passive or active investors to scale their portfolios.

Full Stack Real Estate Development

By combining AI, drones, and computer vision, the real estate development process can be reimagined from the ground up. AI models can identify optimal parcels based on zoning, generate compliant architectural plans, and even automate permit submission. Drones can assess land features while computer vision analyzes redevelopment potential. This end-to-end automation turns fragmented development workflows into a software-defined, scalable process.

Automating Closing Documents