As the number of online tools for real estate investors increases, virtual real estate wholesaling is becoming one of the top real estate investing strategies that anyone from anywhere in the country can get into.
If you need a refresher on real estate wholesaling, check out our guide here. You'll see a lot of overlap between traditional and virtual wholesaling, but you'll also see how the steps differ when you're virtual as opposed to in-person.
We're excited that virtual real estate wholesaling is on the rise - so here’s a step-by-step guide to getting into it.
What Is Virtual Wholesaling Real Estate?
If you're a real estate investor who wants to get into wholesaling - what if you could do it from anywhere in the world?
Virtual real estate wholesaling works in the exact same manner that traditional real estate wholesaling works, except it's all online. It’s a process in which wholesalers buy and sell properties - but virtual wholesaling means the wholesaler never sees the properties in person.
Let’s take a look at a step-by-step guide to virtual real estate wholesaling.
5 Steps To Virtually Wholesaling A Property
Step #1: Find Motivated Sellers
The first step in the wholesaling process is the same virtually as it is in person - finding properties that are being sold at a discount. Investors can do this by searching for properties that are in foreclosure, have liens on them, or are being sold by owners who are in a rush to sell.
Protip: Sifting through local records using skip tracing is how you can find motivated sellers for free - but it's not very scalable. To scale this process, investing software is a must.
Step #2: Connect With Seller
Once a virtual wholesaler identifies a target property, it's time to establish a relationship with the property owner.
By establishing a relationship, you can better understand exactly why the property owner is selling. You'll learn what they want out of the deal, which will help you tailor your offer to be more attractive to them.
Additionally, building a relationship will help to build trust and ensure that the transaction goes smoothly. And this trust starts and stops with honesty from both sides of the table. Treat the seller with respect and honesty, and they'll likely reciprocate that once they're confident you're not just trying to make a quick buck off them.
So - how do you start that initial conversation? Leadflow' s app gives you property owner contact info right at your fingertips. But if you're not ready to try the app just yet, try out direct mail marketing or SMS messaging to kick off that conversation and relationship.
Step #3: Assess Property Value And Repair Costs
Once you've established a relationship with the property owner, it's time for a property inspection.
This step is the most important difference between in-person and virtual wholesaling. Why? Because you can form relationships and sign deals virtually, but you have to be able to accurately assess property value and repair costs in order to build your reputation as a wholesaler.
How To Asses Property Value And Repair Costs Virtually
Honestly, this is a tricky one. You can have property owners walk you through the property on a video call and do a detailed inspection this way, but we only advise this method if you're trust levels with the property owner are through the roof. Otherwise, it would be very easy for property owners to gloss over potential problem spots on video.
Method #1: Find A Boots-On-The-Ground Investor
Finding an investing partner who can physically visit the target property and perform a detailed inspection is a great way to inspect a property virtually. Ideally, this investor would have experience in estimating property repairs, so you would be able to have a higher confidence level in their overall assessment.
Finding an on-location investing partner is especially useful if you plan to scale your virtual wholesaling operation in this specific area.
Method #2: Hire A Property Inspector
If you don't know any investors with previous property inspection experience, hiring a property inspector is a great option to take. It's a one-time payment and you know the inspector is experienced and will provide a very accurate picture of the state of the property.
Now, all that's left to do is crunch the numbers and estimate repair costs to determine the property's ARV.
Step #4: Negotiate Sale Cost & Put Title In Your Name
The next step is to negotiate a purchase agreement with the seller. Investors can do this using a plethora of online contract and electronic signature tools.
We'd recommend using Legal Zoom to find a real estate lawyer that specializes in wholesale agreements to draw up a one-time contract, then signing that contract with an online document signing tool like DocuSign. You can then use Legal Zoom again to find local real estate attorneys to make any contract tweaks needed to accommodate for local ordinances.
Once the sale price is established, you'll need to put the contract (not the property) under your name. This will give you a window of time find a buyer for the contract and the property.
Step #5: Find A Contract Buyer
Once you've completed your due diligence and are satisfied with the property, it's time to go out and find a buyer for the contract.
This buyer is typically a real estate investor that will rehab the property (using your recommendations) or an end-user who is willing to pay a higher price for the property.
Remember to negotiate the sale price to the end-buyer. The difference between the negotiated purchase and the negotiated sale price is where wholesalers make their money.
Virtually wholesaling real estate is a great way to get your foot in the door of real estate investing and help you gain valuable experience in the industry - all from anywhere in the world. And Leadflow is the ultimate lead generation and marketing tool stack that virtual wholesalers can use to identify properties and close deals.
Ready to get started? Grab the free app below!