All Forum Posts by: Renjie Song

Have you tried mashvisor.com? They seem to do what you described.

Totally agree with you @Danny Kaminsky. Tesla's stock could go 10% either way based on what Elon twitts.

Also a data scientist and investor here. I think one major challenge I am facing and perhaps many others as well is to identify properties and markets to invest in. 

Most of the properties that hit MLS these days are either way over-priced or got bid up with multiple offers. It will be ideal if an investor can reach out to property owners before the building goes on the market. I've done that in a small market and seen some success. It's less of predicting who is likely to sell but more so gathering data from multiple sources, applying appropriate filters and reaching as many owners as possible (with the correct addresses :)).

On a higher level, identifying good markets to invest are just as important. I live in Chicago which is a moderately expensive market. But with the every increasing property taxes and unfavorable tenant-landlord regulatory environment, I would rather put my money somewhere else that generates a better return. I am a cash-flow investor and look for markets that have good rent to price ratio. I have been looking for something that provides this and other factors to evaluate the worthiness of potential markets.

Would love to chat further to learn what you are working on. Just added you on Linkedin as well.

@Matt W.

For A) You can probably lookup some direct mailing companies. You can usually send them a list and they can do the mail merge, etc. They can probably help you with postcard/letter design as well. I haven't really used one, but seems like a lot of options based on just google search.

For B) For addresses and basic property details, I have written code to scrape them from the assessor or county tax website. I might even able to help out on that. Including zoning will be a little bit more tricky depends on how the zoning data is structured by the building/zoning department.

I've recently started trying out a website called Landgrid.com which allows you to upload data and filter. It's pretty cheap compared to other data vendors I've seen and you might want to check it out.

I think zillow used to have something like that free. Even better i think they used to have a price to rent ratio API on zip code level which is more relevant to us. I think you might want to look around that.

I feel like I have seen paid API available somewhere, but if you want data down to zip code across the US, costs might be prohibitive.

@Kurt S. Fellow data scientist and real estate investors here. I think lead generation is always gonna be huge. For example, I recently started a mailing campaign with data I collected from the city's building department. I didn't use any fancy algorithm, but did try to clean up the data as much as I could, and applied a few filters. So far, we are closing on 2 buildings out of 200 letters, so the ROI is not bad if not including my own time. I will be trying data vendor like ProspectNow next to see if I can scale up the process now that I know direct mailing is not a waste of time and money. A lot of time I feel like getting high quality data is more than half of the work. The rest is a numbers game and good negotiation.

Similar to what James was saying I think a tool to understand and identify potential markets will be really useful as well. There might be companies like Mashvisor already kinda doing that, but I don't think they have the analysis down to the zip code level or outside major metros yet.

On the operation side, i can think of a tool to not only track the expenses but also let owners know if their property managers are doing actual repairs and if the costs are reasonable. I think there is always an agency problem here, so a tool to help manage that will be helpful.

I am curious what data you used and how you predict owner age based on the addresses. Just added you on LinkedIn. Would love to continue the conversation. 

One of the main benefits of Stessa is that it's free for the most part. I think there are other property management software that does accounting and book keeping, but at least I haven't used one that does scenario analysis like you just described. If you are familiar with building model in Excel, you can probably use the "goal seek" function to find the break even point.

@Simon W. You are definitely right on that a lot of smaller landlords might not even be aware of cost segs. I myself wasn't aware of this until I read a tax book right before my first tax filing with real estate ownership. 

It's definitely not a simple procedure like a lot of tax-related stuffs, but I do think even small landlords can benefit from it if they can prepare the study using a professional app kinda like TurboTax with reasonable pricing.

I did some quick research online. There are estimates between 15-25% of a rental's depreciable basis could be reclassified at shorter duration (i.e. 5-15 yrs). With the new bonus depreciation, this translates into significant savings for a landlord. Obviously, there are recaptures at sales and such, but time value of money and max 25% recapture on real properties are on your side.

I do agree that there needs to be more awareness on this subject in the real estate investor community. I am glad BP provides such forum for us to ask and discuss. :)

Totally agree, Steve. That's why I think this should be a much cheaper service for smaller buildings since their tax savings from cost seg might not even justify the study costs at higher price.

Yeah, unless you have real estate professional status you are not gonna be able to write off the loss against regular income. However, I do think properties that are cashing flowing between the 1 and 2 percent rule can probably benefit from this pretty early on due to bonus depreciation.

@Steve Morris Thanks for the feedback, Steve!

The reason for the pricing above is that if I am offering similar online survey-style estimates some firms are providing, I can probably charge way less for that. And good point on the IRS audit, that's why the audit defense is usually offered as a premium service (i.e. a $100-$200 add on). 

The motivation behind this is to provide smaller landlords like myself with a unified cost seg and asset tracking portal at an affordable price. I know quite a few ppl, including myself, are using excel to track cost seg, but a centralized portal is probably better for record keeping, especially in case of an IRS audit. 

Thank you, @Yonah Weiss! Would love to connect with you at some point. I have a background in AI/machine learning, so drawing insights and building models from past or large datasets has been my bread and butter.

I do agree that a lot needs to be considered before this becomes a production-level product. I will probably start with SFH, then move on to smaller multi's, while referring more sophisticated and larger projects to more established companies like yours.:)

The motivation of this project comes from me seeing a lot of small landlords around me not aware of cost segregation, thinking its too expensive, or doing it themselves in excel. This will hopefully offer them a unified portal at an affordable price.