Whether you’re just getting into wholesaling real estate or you’ve already been at it for a while, you may run into a situation where it becomes tough to find and close deals. What do you do? Think outside the box. Or rather, outside your geographic perimeter. Consider virtual wholesaling instead. There’s actually not a big difference between virtual real estate investing and regular wholesaling. You’re just doing it in a remote market.
When does virtual wholesaling make sense? You may be in a small town or a challenging market where below-market inventory is scarce, indicating that asking prices are too high or it’s an expensive market. Maybe your marketing efforts are flatlining, with little to no return on your investment of marketing dollars and time. Or, perhaps there is too much wholesaler competition in your area.
What you need to do virtual wholesaling
You’ll need the same things you would for regular wholesaling: a laptop or desktop computer, an internet connection and a cellphone. Because you’ll be dealing remotely, you also need a scanning device or a smartphone app to scan and store documents.
You’ll also need your marketing arsenal: a simple website, and direct mail postcards or letters.
And if you don’t already have one, get a mentor/coach, or at least take a class from a pro. They’ll teach you the ins and outs of wholesaling and, just as important, the mistakes to avoid. You may be able to find in-person classes or coaching sessions, or you could take the same approach as your wholesaling: go virtual.
One thing you don’t need for virtual wholesaling is money. Why? Because you won’t be digging into your own pockets to do any deals. While it could be considered virtual real estate investing, you’re not technically investing in any properties. Rather, you’re using paperwork to your advantage by transferring the purchase contract from a seller to a buyer.
How do you find other markets?
Here’s a good starting point: Think of all the places you’ve visited or lived that you liked. It could be a neighboring town or state, where you went to college, where some of your family or friends live or where you had an awesome vacation. These places are familiar to you, so draw on your own experiences and knowledge of the areas.
Next up: Queue up your web browser and search for “wholesaling houses in <your target city>” or similar. Do any of your familiar places listed above appear in the results? If not, don’t worry. Do a broader search for “best markets to flip a house” or “top cities for real estate investing,” for example. Check several sources and see which areas are mentioned the most.
And of course, there’s good old networking. But rather than going anywhere in person, you’ll be cold-calling local wholesalers to potentially partner with or jumping on Facebook real estate investing groups in the areas you’re considering and asking questions.
You’ve got your target market list … now what?
The markets making your final cut ideally have a lot of cash buyers and minimal competition. Housing properties should be within the purchasing range of cash buyers, and rents should be reasonable. You may run into local legal regulations, particularly if you don’t intend to live on site. So do some due diligence ahead of time so you don’t run into these limitations.
Contact a mailing list service (like Listability.com) to purchase lists to send your direct mail. Look for ones that include foreclosures, vacancies, tax delinquencies, currently in probate court, etc. Owners are more willing to sell at a lower price to unload the responsibility or to get quick cash so they can move on (particularly in situations like divorce or relocation, or they can’t afford upgrades to make it sellable on the open market).
How do you organize everything?
If it all seems overwhelming, we get it. It’s a lot of information to collect and manage. Doing it all yourself is going to take considerable time and effort.
But there is one thing you can do to make it easy on yourself: Get a real estate investing software system to organize and track your virtual wholesaling efforts. Sure, you could use a generic spreadsheet program already on your computer instead. But it can’t do what specialized software does. You want to make the most of your time and efforts by automating as many steps as you can, freeing you up to make more deals. (One option to try out is our Deal Automator tool, created especially to help you get your wholesaling game on.)
What comes first: The deals or the buyers?
There are two ways to look at this. On the one hand, you may think “How can I develop a good buyer database if I have nothing to show or can’t otherwise convince them I’m a reliable wholesaler?” There could be a nugget of truth to that. You don’t want to waste buyers’ time; that’s one thing they have little of. But they do have cash. Buyers are ready for deals from someone else (you) who’s done the legwork on local deals.
But there’s a key challenge with getting the assignment contract first before lining up a buyer: You may not find a buyer in time, or they might back out before the closing. This risk is reason enough to have a solid buyer list that includes the types of property they’re interested in (rehabs, rentals, nothing above a certain purchase price, for example). Not only that, doing it this way can make the virtual real estate investing process go a lot faster.
In the end, there’s no reason not to be working on these simultaneously. You’re always going to be finding deals and buyers.
Where do you find the buyers? Through those Facebook real estate investing groups, Craigslist ads, and by contacting wholesalers local to the area you’re interested in who may be open to partnering with you. (In fact, co-wholesaling is a good way to break into a remote market as you’re building your business and your buyer database. Pre-qualify them by finding out how much experience they have and how many wholesaling deals they’ve closed.)
These are the same ways you can find investor-friendly closing agents and other wholesalers who understand the local market. Since you can’t physically be there, you may find someone willing to help you get to know the local nuances, such as the closing process in that state.
We’re here to help
While you can do virtual wholesaling on your own from anywhere, that doesn’t mean you have to go it alone as you’re getting started. We’ve developed a full range of real estate investing resources to help you, whether you’re a seasoned pro or just getting started. Not quite sure what you need? Your answers to our quick quiz will help us customize a resource kit for you.