Will real estate based technology replace the human touch? Does it matter? Waypoint Real Estate Group is harnessing technology to purchase homes – thousands of them at the rate of about five to seven every day – and that same technology is being used to keep track of them.
Current real estate conditions across the country – home prices are down by more than a third from their highest levels – are highly appealing to investors as multiple property buying is fast becoming en vogue.
Ordinarily, investors are individuals or corporations who buy only a small number of homes, however as technological advances provide the ability to streamline many operations, thereby cutting down on personnel needed to maintain control of a large portfolio, it’s likely we will see more large investors materialize.
The lure of profit is difficult to pass up, and with more than 650,000 foreclosed properties in the possession of lenders, as reported by RealtyTrac, another 710,000 in the foreclosure process, and a reported 3.25 million delinquent borrowers according to the Mortgage Bankers Association, that profit is quite substantial.
The “mega investors” believe that rental returns will provide better returns than treasury securities or even stock dividends. Economists believe that these kinds of investors could help stabilize areas hardest hit by the housing crash. Diane Swonk, chief economist at Mesirow Financial stated that, “If you have a lot of foreclosures in one community you will improve everybody’s home values if you take them off the market.”
With financial backing by GI Partners, a private equity firm in Silicon Valley, Waypoint’s plan to purchase from 10 to 15 thousand homes by the end of this year is well underway. This is a huge volume of property that certainly could put distressed areas into the black, however critics of this trend fear that such large portfolios of homes will be too difficult to properly manage.
Waypoint executives, however, are confident that the technology systems and workflow procedures they have in place will allow them to not only purchase profitable properties, but maintain them as well.
Despite offering a potential rescue for certain markets, such as foreclosed and distressed homes, is it possible for large investors like Waypoint maintain a “human touch” despite, or in conjunction with their advanced technological methodology?
What do you think?