Everyone is talking about AI. It’s a huge trend. One with many potential benefits, as well as risks, and plenty of controversy.

Let’s take a look at how AI is already helping to boost some real estate investment businesses, while potentially bankrupting others.

The Good

Good AI tools with some intelligence in their application may help create more efficiency for real estate investors and business owners. They might be able to help streamline tasks and your day so you have more time for the most important work, and more free time.

When curated well, AI tools can help feed your high quality, original, human generated content to prospects and potential leads online.

If your business has true, high value AI tools you’ve developed of your own, then you may find that you are able to raise substantial amounts of additional capital for your business right now.

Even if you don’t, then all of the other entrepreneurs and investors in the AI space who are making out like bandits can become great clients with lots of cash to spend with you.

The Bad

Of course, most people have already encountered negative AI experiences. Especially with customer service apps that are worse than having no chat support at all.

Others have run into AI decision engines in lending, credit, and for other approvals. Often ended up confused on why they were denied, and at the lack of actual intelligence in this so-called AI.

The Ugly

Continuing from the above, if you are trying to implement tools like this for your own customers, you may be turning away countless qualified prospects, and be turning them off with horrible customer service experiences.

Be sure to regularly walk through the process as a customer yourself. If they aren’t making things 100x better for your customer, they are likely costing you an enormous amount of business and income.

If you don’t 100% understand the algorithms being applied and can’t convey them clearly and explain how they are applied evenly to all, then you may run into serious legal issues, compliance problems, and investigations by regulators.

Today, one of the biggest dangers of AI is those being lured into using it to create content. Which often ends up being misleading and incorrect junk. This will rob you of your marketing results, ROI, and both new and existing customers. It may work in another 10 years, with a lot more human input, or for creating fun memes. It’s just not ready for business.

Then lastly, the massive shift to AI is also fueling more unemployment. Even AI leaders and CEOs are concerned about how we will need to address poverty in a world where we only need a fraction of the workers we do today. While the population is also increasing.

In the short and medium term this may lead to a lot more financial distress for consumers and homeowners. Which in turn can make for great opportunities to buy deals at discounts. Though may lead to lower renter and borrower performance.

The vast majority of Americans now fear an impending economic shift for the worse. How is the average person responding with their finances? What are experienced investors doing differently right now?

A New Recession Seems Inevitable

Between rising interest rates, gas prices, shifts in federal monetary policy, sinking stocks, and declining GDP in the first three months of 2022 most believe a new recession is imminent. There is a good chance we are already in one, but the data to show it hasn't been released yet.

According to recent surveys, 81% of American adults fear a recession this year. In fact, more than half already report that they are under financial stress already.

Even more pressing than the loss of their savings and incomes, close to half of those surveyed in the Momentive Poll say their thoughts are consumed by rising prices all of the time. Only 1% do not seem to be thinking about it.

According to respondents, the bulk of financial stress is coming from:

Gas prices

Housing costs

Food costs

Medical costs

How People Are Reacting

According to the data, consumers are already frantically responding to this financial stress by:

Cutting back on dining out

Cutting back on driving

Canceling monthly subscriptions

Canceling vacations

As we saw by the $54B overnight loss for Netflix investors, it is already having a big impact.

Investors

Many individuals are already crying out in desperation over the outlook for their stock accounts and 401ks.

More experienced investors who have been through these times before are adjusting by getting out of stocks, diversifying, choosing more liquid investments, choosing real estate wholesaling over flipping or rentals.

They are looking for assets that will benefit from these changes, investing short term to grow their money faster than inflation, and putting money back in the bank to seize upcoming opportunities in the recession. They are not holding devaluing cash, but know cash will be king when sellers turn desperate.

REI Businesses

Real estate investment businesses led by experienced managers that have been through it before are preparing by building out their infrastructure so they can scale, building databases of sellers, investing in follow up marketing, and readying to buy a lot at discounts.

Summary

The fact that so many fear an imminent recession, and are reacting with their dollars already is likely to bring it about. The financial stress is already mounting, and will directly impact savings and investments. The experienced know exactly how the cycle plays out, and are getting ahead of it, and positioning to benefit and thrive through it.