Do you find yourself losing more and more deals to local investors lately? It’s time to consider a virtual wholesaling strategy, in which you could easily deal in incredibly high volume and comfortably level the playing field with your local competition. You can reap all the benefits of a huge virtual market and see comparable profits to what you’d earn by investing in your home market.
What Is Virtual Wholesaling?
Virtual wholesaling of real estate means purchasing and selling a property long-distance using online references, computers, fax machines and smartphones. Similar to virtual jobs and remote virtual assistants, virtual real estate wholesaling is wholesale real estate transacting that is done mainly through a variety of electronic means.
Wholesale real estate involves entering into a contract for real estate and then assigning that real estate contract to a different buyer. It is worth mentioning that investing in wholesale real estate differs from other types of real estate investments, mainly because the wholesaler does not assume ownership of the property in question. Keep in mind that the wholesaler identifies potential sellers with properties that they want to move quickly and who do not want to use real estate agents.
One of the main advantages of virtual real estate wholesaling is that as an investor, you can easily spread your efforts across several markets in the country, maximizing your return on investment (ROI). When you experience a slowdown in your local markets, growing your investment portfolios to other areas through virtual real estate wholesaling can have a significant financial return.
Steps To Start Virtual Wholesaling
Investors ready and eager to learn how to start virtual real estate wholesaling will be glad to know that the process is not as complicated as they may believe. Also, keep in mind that wholesaling real estate is often a short-term investment strategy. The process of wholesaling real estate does not change from one market to another. If you can find and analyze a good real estate deal in California, you should be able to do the same in New York, Texas or Florida. If you are a modern virtual wholesaler, then the internet is the best weapon in your arsenal — it gives you the whole world and all the relevant data right at your fingertips.
1. Do your homework.
As with most things in the modern real estate industry, the more prepared you are as an investor, the better. An excellent place to start when it comes to virtual wholesaling is to familiarize yourself with a comprehensive overview of the virtual wholesaling process. You should conduct thorough research on your local market. Get a clear idea of what property prices look like, what kinds of properties are available in different areas and where different neighborhoods are.
2. Choose suitable real estate investment areas.
Virtual wholesalers have to work remotely and need easy access to the area’s local data, such as incomes and crime rates. In the past, that implied extensive and time-consuming web searches that yielded few actionable search results. Now, with the help of tools and resources like Zillow and Pinpoint Profits, you can easily select any city nationwide and get comprehensive and relevant data focused on motivated real estate sellers in that area.
3. Find the right property.
When it comes to virtual wholesaling, distressed properties — homes and commercial properties that are in disrepair or properties with owners who are willing to sell quickly — are usually the best because you can purchase them under market value. With the internet and online tools at your disposal, finding distressed properties is not that difficult. You can typically sell a distressed property for more than the amount you put it under contract for.
4. Get in touch with motivated sellers.
Note that with the launch of several tools and apps, big data is now easily available to any virtual investor, in any market, on any device. It is no secret that comprehensive information can make it easier and quicker to find and get in touch with motivated sellers and start making offers.
Many online tools provide crucial seller data, such as pre-foreclosure data (including relevant information on the debt), property details and, most importantly, the contact information of potential sellers. That can include their phone number, social media accounts and email addresses, and it enables you to make immediate and direct contact.
5. Perform due diligence remotely.
Due diligence is an essential aspect of all real estate deals, and virtual wholesaling is no different. As wholesaling real estate is all about the numbers, it is advisable to verify the exact value of the relevant property. You also have the option to network with both agents and investors to know and understand the market. You can use a repair estimate tool for getting competitive bids on the amount of work your property needs so that you can work up and offer it to your seller.
6. Present the real estate contract to the seller.
After finding and contacting the seller, determining the property’s value and repairs and running the numbers on a potential deal, it is time to present your offer to the seller.
7. Market your wholesale contract to interested buyers.
Due to technological advances, building a big and difficult-to-manage buyers list is now a thing of the past. Technology steps in to make the entire wholesaling process more effective and efficient. As soon as you have the property under contract, it will only take a couple of minutes to get your real estate deal in front of hundreds of cash buyers in the market.
8. Assign the contract.
Technology steps in to help here, too. With programs like Contract Genie and PandaDoc, you can easily assign the contract to the interested buyer from wherever you are.
The more you practice it, the more comfortable you will get with the process. Virtual wholesaling is a great way to tap into new markets and expand your portfolio.