Does anyone think that its possible that in the "not too distant" future, "big money" artificial intelligence and fully automated systems will eventually drive down flipping margins to the point that small scale individual investors will no longer be viable/practical in this space?
If you look at the house flipping business, it’s at least 20x more competitive, expensive, complicated and risky, and yet somehow beginners still find ways to enter that business and make it work. I mean... anything is possible, maybe the machines will take over in the future, but it seems like a long shot to me.
I suppose we can sit on the sidelines and wait for it to happen, or we can jump in and make hay while the sun shines (and it’s shining brightly my friend)!
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Okay all joking aside. I think AI is not as black and white as most people make it seem. There's still a lot of work to be done/tested in this area - TONNES of huge challenges (heck we can't even get a car to fully drive autonomously yet, even though that has been said that we would be there by now) and we're probably another few years from even just that. I believe that machines/software/maybe even partial AI can assist with some things, but that's already happening. I just don't think it'll be as clear as black and white as you may think - for the next while I'd say. I think movies/media has sort of drawn this picture in our minds that machines will take over everything. If you're interested in listening more or learning more about AI, I'd encourage you to check out the Artificial Intelligence podcast with Lex Fridman. Great show.
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I think it is viable but like anything you need multiple sources of income. I like how Jack Bosch put it in his book "Forever cash" there are 3 types of income; earned- paid once, recurring temporary (like owner financed land), and forever income (like from rental houses/agricultural rents).
So go nuts with land and invest in some forever streams with the proceeds.
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@jawollbrink do you have any resources on agricultural rents? I’m all in on land and want to just compound my profits into larger pieces of land I can cash flow from as well as create notes from.
@andrewl AI is vastly overrated.
Any organization that depends on AI to make deals will eventually lose its shirt, like Zillow and Redfin.
@andrewl no, for several reasons:
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It’s still a person to person business. Somebody has to talk to the seller, establish rapport, negotiate, handle questions etc. AI / chatbots may improve in their capabilities for initial screening, faq, but people want to talk to a real person before they make a sale of purchase of this size.
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The data is still a mess. Every county is different, with different data, formats, naming conventions, etc. Anybody who has pulled and scrubbed lists knows this well.
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Big money wants predictability and repeatability. Those things result from consistency. A 3/2 house is, in many respects, interchangeable with another 3/2 house. And the differences are well defined. Sq ft, features, age, etc. Compare to raw land, a 5 acre parcel could be almost anything from swamp to desert to forest to prime commercial next to a freeway. You won’t know until a human looks at it. That adds cost, and big money doesn’t like throwing human labor at a problem because it does not scale.