March Blog
Using AI to Screen Commercial Real Estate Deals
Most investors do not have a deal flow problem. They have a filtering problem. Too many deals seem promising at first glance, but only a handful are truly worth deeper analysis. The key question is simple: Is this deal worth my time?
That answer should not require an hour of review or a full underwriting model. This is where AI can be a valuable tool. Not as a substitute for judgement, but as an efficient first-pass screen.
A practical approach is straightforward. Upload the offering memorandum into your AI tool and ask it to extract the key financials, summarize the opportunity, and identify the biggest risks. Then provide basic assumptions such as rent, expenses, and financing terms, and ask for a quick estimate of returns, cash flow, and break-even occupancy. Finally, ask it one more important question: What could go wrong? Real estate has a way of answering that one eventually, so it is better to ask early.
In just a few minutes, you can get a clearer sense of whether a deal deserves serious attention. The goal at this stage is not precision. It is prioritization. Most deals should fail the first pass, and that is a good thing. Successful investors are not the ones who look at the most deals. They are the ones who spend the most time on the right ones.
AI also helps reduce emotional bias. It forces you to examine downside risk before you become attached to the story, the pitch, or the "off-market opportunity" that somehow landed in twelve inboxes that morning.
The best way to start is simple. Pick one AI tool. Learn it well. Use it consistently for prescreening. Once a deal clears that hurdle, then move into full underwriting and deeper analysis.
We use this process to evaluate both on-market and off-market opportunities so we can spend less time on weak prospects and more time advising clients, understanding properties, and facilitating transactions at a high level.
AI is going to reshape nearly every part of business, including commercial real estate. You do not need to become an expert overnight. You just need to start using it in ways that make you more efficient and more effective.
I would also love to hear how you are using AI in your life. If you would like the exact prompt I use to quickly screen deals, reach out and I will send it to you. Email Mark Ellsworth and put "PROMPT" in the subject line.