Episode #147 – How Real Estate Investors Can Get Ready For AI

You're listening to the “REI Marketing Nerds” podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords Nerds, a high-tech digital agency, focusing exclusively on helping real estate investors like you get more leads and deals online, outsmart your competition, and live a freer, more awesome life. And, now, your host, Dan Barrett.

Dan: All right, hello, and welcome to this week's episode of the REI Marketing Nerds podcast. As always, this is Daniel Barrett here from AdWordsNerds.com. If you need help getting more motivated-seller leads online, you know where to go. It's AdWordsNerds.com. [01:00.9]

It is lovely to see you, lovely to see you this week. I'm so happy you are here. This week, we're going to talk a little bit high-level and I want you to stick with me because this is going to be an immediately actionable podcast. I'm going to give you something to think about and do. But I want to take a step back and orient you a little bit in what is happening in the online-marketing world and the real-estate-investing world, and just in the world, in general.

I view one of my jobs on this podcast as letting you know about developments in the tech world and the marketing world that are going to affect you as a real-estate investor. I think that's why people listen to the show. We're going to get a little bit high-level because I think you need to understand the high level, and then we're going to talk about what you can do about it, all right. [01:55.7]

Now, if you are paying it any kind of attention right now, things in the tech world are all over the place. As I'm recording this, Facebook is dealing with whistleblower scandals and I always say the only bipartisan issue in American politics is that everybody hates big tech, right, for various reasons.

Conservatives hate big tech because they think conservative views are being deplatformed. Liberals hate big tech because they think that they give a mouthpiece and a megaphone to misinformation of various types. I mean, there are people that are concerned about privacy and people that are concerned about security, and then all sorts of different issues. These are all incredibly important issues, okay? Incredibly important.

But if you're only paying attention to the hubbub that is our current tech ecosystem—and I do think that in the next 10–20 years, we will likely see some kind of regulation of big tech that will, hopefully, keep spurring growth and innovation and all these things, but put that to the side for a moment—put that to the side. What are the big tech companies thinking about, worried about, and moving towards? [03:15.7]

What they are increasingly moving towards is an intensely algorithmic- and artificial-intelligence-driven future. When you look out at these big channels, Google, Facebook, Apple, when you look at these huge players, what you see are industries and companies that are essentially data stores, and on top of those data stores sits artificial intelligence.

Now, artificial intelligence is a word that can mean a lot of things, depending on who is defining it. Here I'm basically just saying it's some kind of combination of machine learning, a learning algorithm that is then going to make some kind of decision based on what it sees. [04:15.8]

Okay, for example, if you are on Facebook, Facebook is gathering constant data about everything that you do, everything that you liked, how long that you spent on it, what you watched, how long you watched it for. It's feeding that into, basically, a giant database.

No person is really looking at that, your individual data points. Instead, what's happening is the algorithm is looking at it and it's learning over time. It throws something out onto your timeline to see if it improves your time on Facebook number, and if it does, it gives that a little positive score, and over time, decisions emerge. Things on your timeline take on a certain tone or a certain hue. You start to see certain types of content more, right? These are decisions being made by a computer, a big-brained computer. [05:14.3]

Now, artificial intelligence in many ways is a lot less intelligent than people think it is, but there are certain types of tasks that artificial intelligence is very, very good at. Spotting patterns, figuring out correlations, making predictions, these are some things that artificial intelligence can do with a better accuracy than people can do all right.

Now, all of these companies understand that and all of these companies also understand that we right now are in the absolute beginning stages of what artificial intelligence will be. We are in the Stone Age of artificial intelligence, and that's with increasingly complex artificial-intelligence tools and open-source tools and stuff that's available to you, the consumer. You can start to tap into this stuff now for very cheap. [06:18.4]

But we're only in the beginning. This is the absolute beginning. These companies all understand that, and so whatever their business model is today—Facebook sells ads. Google sells out. I don't think any of that's going to change. Whatever, Apple sells phones and apps and everything, right? But whatever their business model is today—you can think of what they produce almost as waste or exhaust, or a by-product of that process of making money. That's the data, right?

Google is showing you search results and serving you ads. The by-product is the data you produced by using their product. Facebook is generating content and giving you a way to like baby pictures and send your mom a message, but the by-product is the data of the stuff that you’ve liked and what you’ve looked at. [07:14.4]

You could think of these big companies almost like factories and the smoke that they're producing, the by-product, is the data. Now, in the factory metaphor, the waste is something you want to get rid of, right? The smoke goes up the smoke stack. You send it into the sky or you do carbon recapture, whatever you do. You're trying to get rid of it. But if you can recapture and use that by-product, it can be incredibly useful.

For example, if you are a logging company that is cutting down trees and then bringing them into the factory, and putting them through the saw mill and getting out planks on the other side, the by-product you produce is sawdust, and you can simply eliminate that, throw it in the dump or whatever, or you can recapture it and reuse it. You can turn it into paper. You could sell sawdust to people that are trying to soak up gasoline spills or whatever, right? [08:14.7]

You can do something with the waste and you can make additional revenue, and sometimes that way of producing additional revenue ends up being more valuable than the thing you were initially doing. This is the case when the paper you make from the sawdust ends up being more valuable than the plank of wood it came from.

Now, for all of these tech companies, whatever they are doing now, what they are really focused on and what they are really producing are proprietary datasets. Big, big piles of data, numbers, patterns, behavior. That's the by-product, but it's also the point. That's the thing that they are banking on. [09:04.2]

Now, why are they banking on it? Because we don't know what we're going to be able to do with artificial intelligence in the future. It blows my mind to even think about the possibilities, but we all know that no matter what artificial intelligence can do, what is it going to need in order to do that? It's going to need data. It's going to need numbers. It's going to need patterns. It's going to need behavior.

Artificial intelligence is only as intelligent as the dataset you give it. All of these companies are in a race to produce the biggest and most valuable and most comprehensive dataset. That's the game they're playing. [09:56.1]

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Now, the reason that I bring this up is I truly think that in the future—and I'm not talking about the distant future. I'm talking about the very near future, in the future—being reliant on someone else's datasets is going to be a massive liability. It's going to be a massive liability.

If the decisions you need to make in your business are relying on information that you need to buy or lease or rent from someone else, and then that information is also available to your competitors, it's going to be very, very hard to get a competitive advantage. [11:08.1]

I look at everything that I do in AdWords Nerds. AdWords Nerds, that's my agency. We work with investors. We only work with investors. We only do motivated sellers. We produce as a by-product of that process of delivering deals to our clients, we produce a lot of data.

Which keywords and which formats get how much volume?

Which keywords and which formats in which positions get the clicks?

Which landing pages get conversions and why was that? And what kind of conversion? Was it a phone call or a click on a mobile link, or a form fill or a chat, or something else?

We produce, as a by-product, a lot of product, a lot of data, and it has been incredibly important for us over the last couple years to collect and gather and start to analyze that data. [12:01.0]

Now, I will be honest, today it can often be hard to use that data wisely. It's hard to know what to do with it. There are limited ways in which you can feed that data back into the lead-generation process. There are ways, but they're kind of hard or they're technically demanding, or it's just kind of finicky.

But we are moving to a world, and you can see this happening in Google, for sure, right now, and it's certainly happening in Facebook as well, we are moving to a world where you are reliant on their algorithm to deliver you leads. Even if we set up your ads and we manage it, we manage your landing page and we manage your bins, and we manage all this stuff, ultimately what's running on the backend is Google's algorithm.

Google's algorithm is only as good as the dataset that you've given it, so if you can give it a complete and comprehensive and extensive dataset, that means that algorithm is going to perform better for you than it's going to perform for your competitors. [13:10.6]

Historical data is the new keyword. Everything used to be, what keyword are you choosing and which keywords do you select? What keywords and what match types? Yes, that's still important, but I'm going to be honest, folks. I'm going to be totally honest with you. Our best-performing campaigns, they’ve got way less keywords than you think they do, way less, because we don't really rely on keywords anymore. We rely on historical-performance data, a very different game. Very different game and very different results.

Here's the thing. As a process of your real-estate-investing business, right now, you are producing data as a by-product. Every click you generate, every lead you generate, every contact you generate, every appointment you generate, every deal you generate, this is data. [14:08.7]

This is data that an artificial intelligence could one day sit on top of and help you make extremely valuable decisions. How much should you pay for this house? How much will you make from this deal? How much should you pay for a lead?

Now, I'm not telling you that those tools are ready today. There are some tools that are really cool and valuable. We use a whole bunch of them. I highly guarantee, getting into consumer artificial intelligence. It's fascinating, but like I said, that's the Stone Age. We're in the Stone Age. But even though we're in the Stone Age now, we're not going to be there for very long, and when we get to where we're going, you're going to wish you had the dataset already. You're going to wish you had been collecting it all along. You're going to wish you had prepared. [15:07.0]

Here's the thing. You can start building your custom dataset right now. Right now. My dad always used to say this, the best time to plant a tree is 10 years ago and today, so start doing it now.

If you're asking yourself, How do I do that? look, a couple of easy things you can do.

One, get a real basic set of website-analytical tools to set them up and forget about them. I would suggest Google Analytics and Google Search Console. Really easy to set up. They're free and you just set them and forget them. They're going to collect everything that you're going to need on your lead flow and yada, yada, yada.

If you've got a CRM, you can export your lead data from that CRM. I would just start putting all the leads and their status and their information, every bit of information you get from every lead, export all that stuff into a spreadsheet, CSV format, Excel format, Google Sheets format, whatever. Just start collecting it. [16:15.0]

Look, you don't know what format it's going to need to be in and you don't know what you're going to wish you had to collect and yada, yada, yada. You're not going to know the specifics. That's okay. Just get started.

For us at AdWords Nerds, every single lead we generate, we track. The time of day, the day of the week, obviously, right? We get the name and email, and the phone number and the address, right? We get all the second-step form stuff like if they're motivated, whatever we can learn about the property. Then we get the channel, Google, Facebook, Bing, whatever. Then we get the campaign. Then we get the ad group. Then we get the keyword. Then we get the device. We pull everything. [16:59.5]

Then we're starting to pull now working with our clients, Did you contact? Did you close them? How much did you make? We could start to feed that data back into Google. That makes Google smarter. That makes Google better for us at getting leads for our clients.

This is the name of the game, folks. Like I said, we're only in the beginning, so no matter how you get started, just think to yourself, I am generating data. Everything I do, I'm generating data every minute of every day. How can you capture that for your business, so you can profit off your own data, rather than just giving that to the big tech companies so that they can do it and pocket that money for you? Think about it because this is going to be one of those things you are going to wish you did.

I hope that makes sense. I hope this was useful. As always, you can go over to AdWordsNerds.com for a ton more podcast episodes like this. Plus, we've been doing blog posts. I've been posting all the time long-form stuff on every single type of real-estate investor marketing. I highly suggest you go check us out at AdWordsNerds.com. Just click the link that says “Blog” and check it out. [18:15.2]

As always, I really appreciate it and I appreciate you listening to this podcast every week. I will see you next time. Cheers.

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