Why Quality Data Is Critical for Successful Real Estate Investing
Data has become essential in all industries. Medical professionals use it to help make diagnoses and predict what treatments will best serve their patients’ ailments. Researchers rely on it to create models for how populations behave or react to specific political or socioeconomic changes. Traders apply it to their investment strategies by projecting stock movements. We cannot escape the influence of data in the world we live in, and it is time for the real estate investment industry to modernize and leverage the power of big data like other industries have been doing for years.
Modernizing Real Estate Investing
At Breneman Capital, we strive to make direct investments in multifamily real estate as easy and reliable as possible. To do this, we have invested heavily in technology, both for ourselves and our partners. This focus on technology ranges from leveraging machine learning for our underwriting and predictive models to offering our partners the best investor platform available through Juniper Square. As we develop our machine learning models, we focus on utilizing the most robust and highest quality data available.
For more information on how Breneman Capital is evolving the industry, please read The Future of Real Estate Investing Looks Like Breneman Capital.
Where We Obtain Our Data
To make the best models, you need the best data. That’s why we are constantly communicating with our providers as we meticulously fine-tune our database with new information and research dedicated to our target markets and submarkets. Breneman Capital subscribes to industry-standard data platforms such as CoStar, Yardi Matrix, and Moody’s REIS. We aggregate public data, including census data and research data from real estate giants such as Zillow. In addition, we use state data as well as income information from the IRS. Our pursuit of new sources of data is persistent and insatiable.
How Breneman Capital Uses Data
Breneman Capital uses data for, among other things, our in-house machine learning models. We can forecast key multifamily real estate performance metrics such as rent growth and cap rate movement, ranging from simple regression models to complex multivariate deep learning models. Predictive analytics are integral to our underwriting and decision-making, guiding our market selection and property-specific analysis.
Why Quality Data Is Important
Below are a few reasons why having the best data helps Breneman Capital be a better solution for your real estate investments:
When it comes to our machine learning models, it cannot be emphasized enough how crucial quality data is—it is a new technology that requires thousands if not millions of data points. If those data points are not accurate or not representative of the fundamentals we are studying, the models will not have any predictive capacity. Our backtesting has demonstrated that having more quality data will yield forecasts that have greater accuracy for both short and long-term projections.
The best data will also lead to better target submarket identification. Our acquisitions team benefits greatly when referring to our forecasts, allowing them to pinpoint the most favorable prospective investments as soon as they come in. This process enables us to manage our pipeline efficiently by filtering for potential investments with desirable risk-adjusted return profiles.
Better machine learning models also reshape our traditional understanding of real estate. By way of data science, we challenge conventional schools of thought as to what drives performance. While other investors may rely primarily on anecdotes, word of mouth, experience, or some combination of those things, we have taken a holistic approach in understanding how to invest in today’s world.
Better data results in easier-to-use models. If we are confident the inputs are of high quality, we can have the confidence to develop our models in a more dynamic, durable way. It allows the team to focus more time on creating original insights and predictions and less time cleaning unorganized data and transitioning it to a usable state.
Having the best data also gives us a competitive advantage over other multifamily investors as we can identify trends and adjust our individual property strategies more quickly. Having access to good information is imperative in adapting and overcoming obstacles.
Having better data helps us be better investors, and understanding how markets will behave in the future is essential to executing the best investment strategies for our partners and us.
Breneman Capital for You
Breneman Capital is a data-driven multifamily investment firm pushing the real estate industry into the future with a modern approach to direct real estate investments.
We focus on providing our investors with the best risk-adjusted investment opportunities in carefully selected markets across the U.S., researched and underwritten with extreme detail from our headquarters in Chicago.
Breneman Capital has sourced millions of data points, striving to create an exhaustive database that informs our investment decisions.
To begin receiving high-quality investment opportunities from us, sign up today: