Back in 2018, a New York-based startup founded by four Israeli entrepreneurs called Skyline AI acquired two multifamily residential complexes in Philadelphia for $26 million. You might think that, so far, there’s nothing new under the sun, and you would be right. Except this deal was driven by artificial intelligence and, specifically, a machine learning algorithm capable of spotting real estate opportunities by assessing a property's market value and its possible future price.
This evaluation process was carried out taking into account a multitude of factors, including the asset's features, the local real estate scenario, the access to facilities, and many others. However, the analytical capabilities of this machine learning system turned out to be much deeper than one might have expected, investigating even the most subtle nuances. For example, the algorithm recognized potential signs of mismanagement, "betting" on the fact that the owners would be willing to get rid of their property at a price lower than the actual value, consequently suggesting a lower bid. And it worked, as the company settled the deal for 12% less than previously expected. Below is a simple analysis done to build a model that could predict sale prices but as can be seen from the above, the applications in the real estate industry is vast.