What Do You Guys Think About Virtual Wholesaling?

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What Do You Guys Think About Virtual Wholesaling?

Raheem Jamaal
Fredericksburg, VA · Member since 2016 · 28 posts · 12 votes
What's up, BP Family! I know this is not a new concept, but it is fairly new to the overall 30,000 foot view of wholesaling. What I want to know from the people that are experienced in running a virtual wholesaling business, is it actually doable for someone just starting out? Is it more cost effective and worth the time and effort to structure a business like this as opposed to just trying to wholesale in your local market? I know a lot of you will probably ask "Well, what are your goals? Well, based on your answers, my goals will look like this. My Short Term Goal (pertaining to virtual wholesaling based on you guys opinion if it's doable for someone starting out): 1. Do 5 virtual wholesale deals a month that profit me at least 50,000 dollars a month after overhead. 2. Put that money into a house hack. 3. Continue scaling the wholesaling business while working a full time job. My Long Term Goal (pertaining to virtual wholesaling based on you guys opinion if it's doable for someone starting out): Now that the virtual wholesaling business has scaled and I have a solid team; now I want to put that money into income properties. 1. 10 virtual wholesale deals a month that profit me at least 100,000 dollars a month after overhead 2. Roll that money into a SFR every two months so 6 SFRs a year divided into 3 different states and 1 local market each state so for example 2 SFRs in Orlando, Florida, 2 SFRs in Clayton, Georgia, and 2 SFRs in Somewhere, Michigan...you get the point... (possibly leveraging conventional loans or private money as well) 3. Rinse, Repeat until I feel like I'm ready to scale that business and do commercial multifamily. (don't know too much about commercial so those goals are blurry) All in all the big end of the road goal is to have 250,000 dollars a month in net rental income long after I've retired from my 9 to 5. (maybe late 30s-early 40s) OR... If you guys think that newbies should stay away from trying to virtual wholesale, I can do it the somewhat traditional way of building a long time rental portfolio. Maybe house hacking a few times, network with people and find private lenders to do other rental deals with, and just do buy and hold until I'm where I want to be. Anyway guys, I'd like to hear what you guys think of the whole concept of virtual wholesaling, can it be done by newbie investors or not? Should newbies stay away from it? Any feedback or advice helps guys. I really want to start my journey into real estate investing. I'm just not sure where to sow my seeds. Thanks BP Family!
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Andrew Johnson
Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
9y
Raheem Jamaal I'm going to set aside the idea of having a business that makes you (near term) $600K per year and choosing to house-hack instead of living where you want. Onto the practical matter of virtual wholesaling. From an investor perspective who gets pinged from time-to-time by new wholesalers via BP where they are (way) off is: ARV and rehab cost. If you're doing it virtually how are you going to estimate rehab costs? Do you know the labor rates in different cities? If the locals can't get it right, how are you going to? Do you want to virtual wholesale in different markets, how will you gain that local knowledge? Don't you think it would be more prudent to state near (or in) your own backyard?
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  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y
    Raheem Jamaal I'm going to set aside the idea of having a business that makes you (near term) $600K per year and choosing to house-hack instead of living where you want. Onto the practical matter of virtual wholesaling. From an investor perspective who gets pinged from time-to-time by new wholesalers via BP where they are (way) off is: ARV and rehab cost. If you're doing it virtually how are you going to estimate rehab costs? Do you know the labor rates in different cities? If the locals can't get it right, how are you going to? Do you want to virtual wholesale in different markets, how will you gain that local knowledge? Don't you think it would be more prudent to state near (or in) your own backyard?
    2Reply
  • Raheem Jamaal
    OP
    Fredericksburg, VA · Member since 2016 · 28 posts · 12 votes
    9y
    From what I understand, yes, there is a lot that goes into virtual wholesaling, but somehow people manage to do it in other markets. I think that's the point of going virtual because you can wholesale in other markets, but I completely understand your concerns with it. I may just go the traditional route of acquiring SFRs and house hack.
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  • Dalia S.
    Coral Gables, FL · Member since 2017 · 9 posts · 1 vote
    9y

    I'm in Ireland and I don't know any market in US but I still believe virtual wholesaling will work for me and I'm working on building the sysytem/process. I'm starting with one market and learning about it by networking, research and attending REI meetings every time I visit the US (twice a year). This way I can meet local contractors, investors, etc who can be the part of my team and when needed help me with ARV, rehab/repairs costs, take pictures of the property, etc. Everything else can be done online, over the phone and email. I think the most important thing is to network.

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  • John Thedford
    Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    9y

    There is a lot of misinformation, some illegal, promoted. You want to broker real estate without a license and call it by another name..ok--I get it. Sounds more respectable than unlicensed broker. If you choose to operate in Florida forget it unless you are a licensee. See 475. Those that choose to broker real estate without a license end up like this guy did:

    https://www.myfloridalicense.com/sto/unlicensedact...

    He had contracts on the properties but Florida realized all the game players and scammers were skirting laws so they wrote the statutes to put an end to that. The only way around the law is to OWN IT and then sell it or become licensed in this state. IMO it is a shame there are so many people victimized by FRAUDS claiming they are providing a "service", are "transparent", and other BS. They don't. "Wholesaling" is the art of screwing sellers out of equity without them realizing it, all the while the FRAUDS are telling the sellers how they are doing them a favor. 

    1Reply
  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y
    Raheem Jamaal For what it's worth, I wouldn't necessarily conflate "people doing it" with "people are successful at it" or with "successful people started out-of-market (virtually) one day one". Take a few minutes and Google "survivorship bias" and you'll see what I mean. And (as pointed out) if you do it in a market where wholesaling is illegal, good luck with that! Read up on posts from other wholesalers who aren't at double-closings and got cut out of the deal at the last minute. Wholesaling isn't easy. I've never done it but I've seen enough "nobody calls me from my mailers" posts to know that it isn't. Starting out attempting to do it virtually is just another weight you've added around your neck.
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  • Louis Davis
    Flipper/Rehabber · El Paso, TX · Member since 2015 · 379 posts · 201 votes
    9y

    @Raheem Jamaal Being a virtual wholesaler and knowing others, it's all in gathering the facts. I live in Vegas and wholesale properties in California, Tennessee and Georgia. I have to gather as much info as I can to determine the ARV, condition and rehab cost. It is best to start off in your own backyard so you can pick up the patterns in the markets. Once you have mastered your own market, then you should feel comfortable enough to network with other investors in other cities and states to conduct business.

    Hope this helps, 

    Louis

    2Reply
  • Sean Walton
    Wholetailer & Architect · San Francisco, CA · Member since 2015 · 544 posts · 298 votes
    9y

    @Kurush Italia is doing it maybe he can weigh in. It can be done but I would double check that it isn't possible within 1 hour drive of where you are first. 

    Check listsource to see if there are a lot of cash buyers (Absentee owners 100% equity purchased within the last 6 months) free to view # of properties that meet your criteria for any list parameters you generate. 10 cash sales in a city with about 40,000 SFRs is probably workable as long as it isn't a place where people are buying a lot of 2nd homes

    0Reply
  • Kurush Italia
    Wholesaler · Los Angeles, CA · Member since 2016 · 20 posts · 32 votes
    9y

    HI @Raheem Jamaal,

    I like seeing the drive and high goals for yourself. Virtual wholesaling is not for the faint of heart but with proper research and guidance it's definitely possible. I too have started while working a full time job. It's def quite hectic but super rewarding when you wholesale your first property.

    To build up to 5 deals/month is not going to happen overnight. I would sit down and think about how much money you have available to invest into wholesaling on a consistent monthly basis for the next 6 months. People think wholesaling is free but it's free if you have time (cold calling, door knocking, driving for dollars). Since I have a full time job I looked into paid marketing like direct mail.

    I was on the sidelines all of last year trying to figure out what I wanted to do in real estate because there are so many avenues to choose from. If you are set in virtual wholesaling and really want a step by step way of getting there then I would recommend spending some money and getting a mentor that will give you even more laser focus. If you or anyone needs recommendations on a mentor please PM me.

    There are a lot of components that go into wholesaling which isn't impossible but if you end up doing 1 thing wrong (like mailing a bad list) it can set you back even longer. Just be wary of people telling you it cannot be done. It can be done. Like @Sean Walton says I would take a hard look at places that are only an hour away to you. If you are from VA I would look there first. I know for a fact it can be done in Richmond. Remember grass is always greener on the other side. Gluck :)

    1Reply
  • Marcus Spurlock
    Investor · Cypress, TX · Member since 2017 · 28 posts · 5 votes
    9y

    I virtual wholesale. My first deal was virtual and I'm still a newbie. There is a lot of extra work involved but with the right planning, team on the ground, time on your hands, and right market it can be rewarding. I have since closed deals in the city I live in also and it is a big difference. Feel free to PM me. I'm more than willing to let you in on my strategy.  

    0Reply
  • James Green
    Wholesaler · Waldorf, MD · Member since 2015 · 459 posts · 245 votes
    9y

    @Raheem Jamaal why the fascination with virtual wholesaling? Your market is not that expensive as areas of California. Have you done any deals in Fredericksburg? You have a ton of opportunity where you live. 

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