One of the best ways to invest in real estate with little to no money of your own is by wholesaling real estate. However, most beginner wholesalers experience a low deal flow because they only focus on their local real estate markets. If you want to level the playing field with your competition and take your real estate wholesaling business to the next level, it’s time to consider taking wholesaling into the virtual realm. The virtual wholesaling strategy can significantly increase your deal flow and profits.
So, what is virtual wholesaling and how can beginner real estate investors get started?
What Is Virtual Wholesaling?
Virtual wholesaling refers to the buying and selling of property by exploring several real estate markets using a variety of electronic means such as computers, smartphones, fax machines, etc. Just like in traditional wholesaling, you identify potential sellers, enter into a wholesale real estate contract, and then assign the contract to another buyer. In other words, you don’t assume ownership of the investment property.
When your local housing markets are experiencing a slowdown, the best way to improve your deal flow and increase your financial returns is to spread your deal search to other markets. This can be done easily through virtual wholesaling. By spreading your efforts across multiple real estate markets in the country, you’ll be able to maximize your return on investment.
Another reason to consider virtual wholesaling real estate is the difference between the typical online leads and offline leads. Offline leads from lead generation strategies like door-knocking, direct mail, and bandit signs are usually proactive. This means that not every door knock, mail, etc. will even result in a lead. Moreover, only a few of the leads will actually result in a deal. On the other hand, online leads tend to be reactive. Therefore, most online leads you receive are usually motivated.
With the right technology and skills, you can do virtual real estate wholesaling easily and successfully from the comfort of your home.
The Virtual Wholesaling Process
The virtual wholesaling process is not as complicated as most people may think. Below is our step-by-step guide on how to start virtual wholesaling.
1. Do Your Research
Before you even get started, you want to familiarize yourself with the overall virtual wholesaling process. Make sure you know what to expect and all the legal requirements. Consider consulting someone who has ample experience in wholesaling real estate.
2. Find Profitable Real Estate Investment Areas
Location is a crucial factor when looking for good real estate deals. In virtual wholesaling, you use the internet and real estate investment software to access real estate market data remotely. This includes crime rates, incomes, average occupancy rates, return on investment (ROI), etc.
The easiest and fastest way to find good areas for real estate investment in terms of ROI in the US housing market is to use Mashvisor’s real estate heatmap. With this tool, you can easily select any city inland the US and get a comprehensive neighborhood analysis based on selected metrics.
3. Search for the Right Investment Properties
When looking for investment properties for sale to wholesale, you want to focus on distressed properties. These are properties that are in disrepair or whose owners are motivated to sell quickly.
Distressed properties are usually the best for virtual wholesaling because you can get them under contract for below market value. Therefore, you can often sell it for more than the amount of money you put it under contract for.
You can find distressed properties in the US housing market using the Mashvisor Property Marketplace. The tool allows you to find off-market investment properties for sale such as foreclosures, short-sellers, bank owned homes, and auction properties. With the following filters, you can narrow down your investment property search:
- Location
- Miles
- Budget
- Rental strategy
- Property type
- Number of bedrooms
- Number of bathrooms
- Cash on cash return
- Cap rate
- Listing type
Related: How to Find Distressed Properties for Sale
4. Conduct Investment Property Analysis
Investment property analysis is a crucial aspect of the virtual wholesaling system. To know whether an investment property is a lucrative one, you have to crunch the numbers.
There are a number of metrics that can help you estimate the profitability potential of an investment property. First, you should verify its fair market value. This is done by researching comparable properties in the area that were recently sold. The comps will help you gauge the right price to set in the contract and to agree upon with the buyer. You can easily get real estate comps for investment properties for sale in the US housing market using Mashvisor’s investment property calculator.
You should also take into account other property data such as rental income, cash flow, cash on cash return, and Airbnb occupancy rate. These metrics can also be calculated using Mashvisor’s calculator.
5. Find Seller Data and Get in Touch with Them
The next step in the virtual wholesaling process is finding and getting in touch with the motivated sellers so that you can begin making offers.
Mashvisor allows real estate investors to access crucial homeowner data such as property address, email address, and phone number through a tool called Mashboard. You can then get in touch with the property sellers and begin negotiations.
Related: How to Find Out Who Owns a Property for Off Market Deals
6. Present the Wholesale Real Estate Contract to the Seller
After finding and contacting a property seller, it’s time to present your offer to them. If you have done your investment property analysis well, you should know how much to offer for the property. If you put in an offer that is too low, you risk losing the deal. On the other hand, if your offer is too high, you may not be able to make a good profit once you pass the deal onto the buyer.
7. Market Your Wholesale Contract to Interested Buyers
Marketing is a crucial aspect of the virtual wholesaling process. Once you have found a profitable investment property and put it under contract, you need to get the deal out there, in front of investors.
Fortunately, technology has made real estate marketing much easier. You can use a number of modern strategies to get your deal known to hundreds of potential cash buyers in the market. You may consider creating a professional website, using social media, content marketing, email marketing, etc.
8. Assign the Contract
Once you find an interested buyer, you can use technology to assign them the contract from wherever you are and close the deal. There are several programs you can use such as PandaDoc and Contract Genie.
The Bottom Line
Virtual wholesaling is a great way for real estate investors to tap into new markets and maximize their return on investment. By following our virtual wholesaling step by step guide, you will be setting yourself up for success. When searching for investment properties for sale, remember to always use Mashvisor, one of the best virtual wholesaling software.