KPS has spent several years and over $2 million developing and perfecting a software system called ADAPT that enables the Company to underwrite thousands of assets in just hours. It can determine the appropriate home value, rental pricing and disposition strategy (rent or resale) to yield the greatest return, on an asset-by-asset basis. The ADAPT system was built for scaled underwriting applications and third party marketability. It can be utilized to assist Lenders, nonperforming loan buyers, mortgage originators, REO service providers and REO aggregators, for Acquisitions and for BPO/Appraisal validation.
ADAPT has proven extremely accurate at predicting net yields using proprietary algorithms developed by KPS based on the considerable fund experience of its team and vast data pulled from verified sources. ADAPT consolidates best in class data and is continually being updated with new data points. The underwriting process identifies value and rental income by neighborhood, census tract and/or school district and produces net rental yield estimates based on fully-customizable components of basis and NOI.
ADAPT uses multiple regression analysis to estimate renovation costs. This regression is reviewed often and refined to ensure accuracy given changing market conditions. Its renovation regressions have demonstrated extremely high, statistically significant coefficients of determination–over 80% for homes built prior to 1980 and over 90% for homes built since 1980.