GPT-3 Potential Applications in Multifamily Investment Due Diligence

GPT-3, the latest GPT architecture by OpenAI has strong prospects for applications of AI in commercial real estate (CRE) investment due diligence.

At Clik.ai, a large part of our strategy is to support the automation intiatives for the multifamily and commercial real estate industry so that the deal process is streamlined and unnecessary human capital deployed can be minimized.

AI will play a huge role in the future of the multifamily investment process. We develop a combination of proprietary and open-source software to make the due diligence, communication, and investment process more efficient.

We are currently exploring the potential of GPT-3 in the process of multifamily due diligence. There are a variety of reasons for this, but a major one is to enable investors and banking institutions to drive analytics from the messy due-diligence vault which generally contains hundreds of messy PDFs, scan documents like PSA, Appraisal reports, insurance documents and so many more.

What are some CRE applications for GPT-3?

AI-powered due-diligence

Machine learning systems are best applied to situations where there are repeatable patterns and fine-tuning these models.
Automate the cash flow analysis and modeling various IRR and loan scenarios from documents like Rent Roll and Income Statements
This is particularly useful during due diligence when looking for patterns of fraud, reports like environmental, fire safety, insurance documents, creative accounting service contracts and so much more.
Analysts and deal team may get tired, make mistakes, and cannot review as much data as a machine
Within the real estate world, many companies like Leverton.ai offer tools with AI-based due-diligence features, however, such technologies have been lacking at large in CRE. The favorite tool we know for CRE due-diligence is from ProDeal that streamlines due-diligence document collection which enables easy access to information for deal teams.

Generally, we see a few applications where GPT-3 could be valuable in the due diligence:

Answering questions or finding results from CRE due diligence vault. CRE due-diligence might be an area where it will make a big impact.
Generating text to create Investment Memo. Think Google’s auto-complete but even more sophisticated. That capability has potential applications in contract drafting, but the system would have to be trained on the right data.

Here are some examples of GPT-3 in different industries like private company private equity, legal, and customer support etc.

Examples listed on OpenAI website - visit at https://beta.openai.com/examples

Extract data from invoices and real estate bills

Real estate operators store their monthly invoices for reconciliation purposes. Today this job is done by a team of property managers. Surprisingly enough, in many cases, even the property owner of a multifamily property or a partner of the deal syndicate is doing this job.

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Create a balance sheet and potentially a financial model project cashflows

A bot that can create balance sheets directly from instructions in plain English sentences.

Financial Statement and Cashflow Analysis from any document

This GPT program extracts financial metrics by simply copying and pasting the Income Statement from the quarterly press release

Decrypting complicated legal jargon in CRE legal doc & agreement into simple understandable text

Summarizing legal language and complicated paragraphs into a '2nd grader' English can help avoid some unnecessary legal bills.

These are just some very basic examples of AI being applied to the multifamily CRE industry and its processes. We are seeing strong adoption of AI into CRE investment processes from various institutional and non-institutional investors in multifamily and commercial real estate properties including banks, apartment owners and syndicates, institutional private equity shops.

To learn more about us, feel free to schedule an introductory call with one of our partners here: Meet with Clik.ai team