Precisely how much value do marble countertops add to a property’s overall valuation? How is rent affected by the proximity of public transportation?
These are the kinds of questions Enodo is aiming to answer with data.
Enodo is an automated underwriting platform for multifamily real estate. It uses data pulled from hundreds of thousands of listings within individual markets to predict how overall property market values and rent incomes are affected by individual attributes and regional specifications.
“Our algorithm asks, if the only difference between two properties is that one has a pool and one doesn’t — everything else is held equal — what is the impact of having that pool?” said Marc A. Rutzen, co-founder and CEO. “It will look through every single amenity and characteristic of those two properties and quantify individually — what does each one contribute to value?”
Rutzen, who co-founded the company in 2016, worked as a real estate broker and consultant within the multifamily market segment. He was often asked to provide analysis and insight to clients based on data aggregation, and discovered that much of the process could be entirely automated.
We analyze the data then tell you what that means for your investments.”
“We offer the opportunity to hire Enodo to be your data scientist and deliver the results you would get if you had a team of data analysts,” Rutzen said. “We put that in the hands of the everyman consumer and investor in real estate.”
The platform, which currently hosts around 2 million properties, pulls its data from property management software, property listing websites and user uploads.
Rutzen wants Enodo to help investors “find the worst house on the best block,” which is a common goal for professionals in the real estate community because it presents an opportunity for a remodeling-based investment that leads to increased property value, he said.
One of the challenges Rutzen is taking on in building his company is changing the perception of data analysis in the industry, as those within it are generally hesitant to adopt new technologies because they feel things worked fine before.
And while other like-minded companies are aggregating data, they are not doing much to synthesize it for their users.
“We are not a data provider, we are an insight provider,” said Rutzen. “We analyze the data, then tell you what that means for your investments.”
Enodo is currently in the process of beta testing a new product iteration that allows for greater insight into quickly determining a property’s market value and what its investment potential may be.
To date, the company has raised $2.5 million and currently serves five of the top 10 private equity lenders in the country.