Wholesaling real estate is an excellent way to earn extra money as a side hustle. In fact, many wholesalers scale their business and earn hundreds of thousands and even millions in assignment fees. You may have heard about virtual wholesaling real estate. In order to scale your wholesaling business, it may require the wholesaler going into additional markets. Virtual wholesaling is a great way to accomplish this, but how does it work?
Before we get too far into virtual wholesaling real estate, it’s important to understand the basics of wholesaling first. In a nutshell, wholesaling involves putting a deal under contract, and then assigning the contract to a cash buyer for a fee (assignment fee). That is how wholesalers earn money. Most wholesalers operate in their own local market. That way, they can meet directly with the sellers and give them their sales pitch about buying their house fast for cash with no closing costs, no fees and no commissions. Virtual wholesaling real estate, on the other hand, allows the wholesaler (or wholesaling business) to wholesale properties in any market. Let’s take a deeper dive.
What is Virtual Wholesaling?
The concept of virtual wholesaling real estate is pretty simple. Instead of operating solely in your own market (or the market you live in), you branch out and enter other markets. Any wholesaling business that is looking to scale should consider virtual wholesaling. Once you have established yourself in your own market and have a business model that is repeatable, you can replicate that model elsewhere.
Conventional wisdom suggests wholesaling in your own market is easier and more effective. The assumption is, sellers generally prefer to work with local businesses and meet with local people. This was my belief system when I first started out, and the idea of virtual wholesaling real estate sounded intimidating. In fact, I remember telling myself that I would never get into virtual wholesaling because I was convinced it would not work.
After I doing few virtual wholesale deals, my belief system quickly changed! So much so, I am now virtually wholesaling in other markets. Interestingly enough, I found that virtual wholesaling real estate is easier and takes less time. It’s more efficient when you are not meeting with the seller in person.
With virtual wholesaling, most of the acquisitions is done over the phone. Instead of meeting with the seller at their house and taking photos, you gather information and make the offer over the phone. As a wholesaler, you will still need photos to eventually market the property to cash buyers. This can be done by asking the seller to send you photos of their house or by sending a photographer to the house to take pictures for you. There are companies that specialize in taking photos of houses and oftentimes they can do it for less the cost of a professional photographer.
Best Marketing Channels for Virtual Wholesaling
Any marketing channel will work for virtual wholesaling real estate, but there are certainly some that are more effective than others. Let’s explore a few marketing channels and how each one performs with virtual wholesaling.
- Direct Mail: If you are entering a new market, direct mail is a good option because you don’t need to have a website, company logo, etc. Just pull a good list, keep the messaging short and instead of using a company name just use your name.
- SMS Marketing: Like direct mail, SMS marketing does not require you to have an established local presence to bring in leads quickly. Pull a good list, skip trace it and make sure your initial messages are on point. Use an SMS service provider like Launch Control to run your campaigns.
- Google Ads – SEO: The best motivated seller leads come from a well put together website. This is because the seller is actively searching the internet for a company to buy their house and they found you. This will take a lot more time, but once your site is ready and you have an establish local business on Google, it will be worth it!
Finding a Buyer for a Virtual Wholesale Deal
In traditional wholesaling, most of the dispositions side of the business is done virtually anyway, so this won’t be much different. The biggest difference is you won’t be physically present to show the house to potential end buyers. In our wholesaling business, we rarely are present for these walkthroughs anyway and have found that it’s not necessary as long as you prep both seller and end buyer.
If you are entering a new market with no cash buyer relationships, there are a few proven strategies you can utilize to quickly find a buyer for your wholesale deal.
- Post the wholesale deal in local Facebook groups: in FB, search for real estate investor groups in the city where your deal is located. Look for groups with at least 1,000 members and join those groups. Make sure you read the rules first but most of these groups allow wholesale deals to be posted. If you have a good deal, you should be able to find some buyers!
- Reach out to local wholesalers. In Google, search “companies that buy houses in [City, State]” or “We buy houses in [City, State]. Many of these websites are local wholesalers and that already have established buyer relationships. Contact them and ask if they have any buyers for your deal. Most wholesalers will JV the deal with you and split the assignment fee 50-50.
- Agent Outreach. Use Zillow to find houses that looked like they were recently flipped in the same area as your deal. Call the listing the agent who sold the flipped the house and tell them you have a deal for their buyer. Keep in mind, you may need to pay the agent a 2-3% commission so make sure you factor that in!
Selling Your Virtual Wholesale Deals with Investor Lift
If you already have an established wholesaling business, I would highly recommend signing up for Investor Lift. Especially if you plan on entering new markets. Investor Lift is a marketplace for off-market wholesale deals and they have a huge database of buyers doing flips all across the country. They even provide the buyers contact information (phone, email if available) and information about their flips (address, margin, etc).
The robust software allows you add your existing buyers list so you can send email and text notifications to your buyers when you have a new deal. Each buyer is assigned a “Buyer score” based on how active they are on the platform. Every time they view a deal, request an address, or buy a deal they get points. The best part? Most buyers are already in the Investor Lift database with verified contact info. This is GOLD! If you plan to virtual wholesale in a new market you definitely want Investor Lift to make your life easier.
Investor Lift also provides useful analytics about house flipping and wholesaling. They track volume of flips in every county, city and state and provide average gross profit. You can filter by year and quarter. This data can be especially helpful if you plan to virtual wholesale real estate in other markets.
It’s a little pricey but worth it in the long run if you are serious about building a wholesaling empire! 💪
Pros of Virtual Wholesaling
- It’s Faster. By eliminating the in-person appointment with the seller, you can get from lead to contract much quicker. These efficiencies will allow you to get more out of your team.
- Save Money on Travel. In addition to being faster, virtual wholesaling will save you money on travel expenses and allow for larger profit margins.
- Easy to go into New Markets. Once you have the virtual wholesaling blueprint established, you can enter into new markets with ease. If your goal is build a $1mm + wholesaling business, virtual wholesaling is growth strategy worth implementing.
- Utilize a Software Like Investor Lift to Move Deals Fast. Once you have the acquisitions side established, you can use Investor Lift to quickly dispo your deals.
Cons of Virtual Wholesaling
- Some Sellers Prefer an In-Person Meeting. While most sellers won’t care if they meet you in person or not, there are some sellers who have old school values and insist on meeting in person. They value “local” and if they find out you are not, they may move on to the next buyer.
- Relying on Pictures to Make Offer. With virtual wholesaling, you are making an offer based on seller provided information and pictures. This is risky since a seller could be hiding something and pictures don’t always tell the whole story.
- It Takes Time Learning a New Market. Every market has its nuances, and it takes time to learn a new market. There will be a learning curve when it comes to understanding neighborhoods, ARV and what your buyers are looking for.
- Building New Buyers List. It also takes time to build a buyers list in a new market. Even if you put deals under contract virtually, it may take more time to find a buyer initially without existing relationships.
Overcoming the Objection of Not Being Local
There are certainly some challenges with virtual wholesaling real estate. The biggest one is convincing the seller you are a credible business in their local market. Many sellers seek out local businesses online with good reviews and chose to do business with them based credibility. If you don’t exist online, some sellers may be hesitant to work with you.
We already discussed 3 solid marketing strategies to bring in seller leads. If you are using direct mail and SMS, you probably don’t have much of an online presence. Don’t worry about it. You can still get leads and overcome the “not local” objection.
Since your end buyer will be local, technically you are local. If you get a lead, don’t make it known that you are not calling from their city or state. If they ask, you can be honest and tell them where you are. Otherwise, make sure they understand your are buying houses in their market. You can say you run a small business and the website is a work in progress, but always maintain that you are local.
If the seller is motivated, this is usually a pretty easy objection to overcome when wholesaling virtually. They won’t care too much about your business or where you are located if you can get their house sold quickly at a fair price.
The Bottom Line
Yes, virtual wholesaling real estate is legit and you can make a ton of money doing it. If you are new to wholesaling, I would highly recommend wholesaling in your own market first and learning the ropes. There is a plethora of useful resources on my site and my YouTube Channel. If you are eager to get your first deal in 30 days or less, I have a step-by-step guide for that too! It’s only 10 bucks on Amazon. You can get it here.