Hey everyone! I was thrilled to recently join Kyle, AJ, and J on Episode 92 of the Drunk Real Estate podcast. See the end of this post for the video. I was super excited to finally pick their brains (and maybe share a few of my own!) about how AI is impacting our world, especially the realm of real estate investing.
First off, let me say that Kyle, AJ, and J are hilarious! Despite my (and AJ’s) designated driver status for the evening, the conversation was lively, engaging, and full of insightful (and often hilarious) perspectives.
The main focus of our discussion was, unsurprisingly, how AI is changing real estate investing forever. We dove deep into some key implications that I believe every investor needs to be aware of.
One of the first big topics we tackled was the deflationary power of AI. I highlighted that historically, new technologies tend to drive down the price of goods and services. AI is no different. By enabling businesses to save on employment costs and automate processes, we’ll likely see downward pressure on prices across various sectors. This could be a significant factor, especially if we continue to grapple with inflation or even face stagflation.
Of course, the question on everyone’s mind, particularly for real estate investors, is: what does deflation mean for our assets? While inflation has traditionally been seen as a tailwind for real estate, driving up rents and property values, deflation raises concerns. We discussed how, on the flip side, controlled inflation can lead to cheaper borrowing costs, which benefits leveraged real estate investments. The key takeaway here is that we need to be mindful of both sides of this coin.
We also spent a significant amount of time discussing the impact of AI on the job market. The common saying in AI circles is that AI won’t take your job, but someone using AI will. This really resonated with AJ’s experience of leveraging VAs and now seeing AI as a way to further enhance their efficiency. There was an interesting debate about whether AI is primarily replacing skilled or unskilled labor, with AJ offering a more optimistic view that AI could actually help solve the impending labor shortage due to retiring baby boomers.
Another fascinating aspect we touched upon was the democratization of real estate investing through AI. Suddenly, tools and research capabilities that were once exclusive to large institutions are becoming accessible to individual investors. This leveling of the playing field could open up new opportunities for smaller players to analyze markets and make informed decisions. However, AJ also pointed out that this could increase competition for more established investors.
We also had a very important conversation about trusting AI. While AI offers incredible potential, it’s crucial to remember that it’s not infallible. Kyle brought up the concept of AI “hallucinations” where it can generate incorrect or even fabricated information, like non-existent legal case law. The distinction between automation and true artificial intelligence was also highlighted. The consensus was clear: human oversight and critical thinking are still essential when using AI for significant investment decisions. As AJ wisely put it, we need to control the inputs and understand how AI draws its conclusions.
Looking towards the future, I briefly mentioned the exciting possibilities of AI agents that could handle complex tasks autonomously, like booking travel. While still in its early stages, this hints at a future where AI plays an even more integrated role in our lives.
Finally, we touched on the crucial role of data in the AI landscape. The more data an AI has, the more powerful it becomes. This led to a discussion about the potential future value of proprietary data and how companies might leverage it.
Overall, my appearance on the Drunk Real Estate podcast was a fantastic experience. We covered a lot of ground, from the immediate deflationary impacts of AI to its long-term potential to reshape the real estate industry. It’s clear that AI is no longer a futuristic concept; it’s a present-day reality that’s rapidly evolving.
I want to thank Kyle, AJ, and J for having me on the show. It was a great opportunity to share my perspective and engage in a thought-provoking discussion.