Volume Wholesaling: Anyone out there successfully wholesale outside their home market sight unseen? Any tips or tricks?

Question

Hi Guys,I was wondering if any of you market and close deals out of your local market and if so, how do you do it without getting yourself in a jam? If there is very stiff competition in your local area or the volume needed to be where you want to be is just not there, does it even make sense to market somewhere else?I have a ton of questions about this. How do you guestimate needed repairs? Is it any more difficult to establish yourself outside your local market with regard to finding cash investors? Do you need to use state specific contracts customized to the area you are marketing to?Are you just shooting out lowball contracts hoping to snag something that works?What does it take marketing-wise to get to a level where you can wholesale 8 to 10 houses per month?Thanks for your input!-Phil

Will Barnard · Answer

No question teams are important as is due diligence. For wholesaling from afar, you need systems, boots on the ground (don't have to be yours), and you have to play the numbers game. Direct marketing is both a numbers game and a persistence game along with consistency. Making offers on the MLS is also a numbers and persistency game.I have several threads in which I talk about how to estimate rehab costs as well as comp properties. In fact, I recently posted a thread with a video walkthrough showing exactly what I do. While you cant personally do that from afar, you can train your team members to do it and from experience, you can get a pretty good idea from enough pictures and video of the site location. A quick search of my previous posts from my profile and you should be able to find them.

Tim Leslie · Answer

I have a guy who I market for who flips/wholesales properties in Milwaukee/Chicago and he is from California. Like others have said...you need a team and systems. His ways of marketing include direct mail and mls/referrals. His team includes an investor friendly realtor who provides comps, neighborhood assessment, etc. A contractor he trusts...gives him accurate rehab estimates. Between his realtor and contractor he gets pictures and sometimes a video walk through. Those are the two main ones...however he also has a local title company he always uses and a local attorney. It's a little tricky getting set up but once you get going it's just investing in your own market.

Shane Woods · Answer

It would seem that without boots on the ground to estimate rehab costs, one of two things will happen...you'll either underestimate rehab and local investors will think you foolish and unable to offer then legitimate deals....or......you can be conservative and assume every property is almost a full gut, and snag a killer deal every once in awhile, and leave lots of money on the table with properties that didn't work for your conservative analysis.There are lots of ways to look at it, but if you have the ability to do the market research and get good mailing lists, why NOT mail to some high equity owners assuming the place is trashed and see who bites? If you follow @will @Will Barnard , he talks about making offers on REO's this way. Just assume it's trashed, offer accordingly on lots of properties, and you'll get some real winners.You just have to be really REALLY careful with rehab numbers, and have somone you trust helping you with market research/comps, etc.

Jeremy T. · Answer

I think the overwhelming response will be "don't do it", but I certainly think it is possible. I think it is imperative to have trustworthy partnership/relationship(s) with "boots on the ground" to perform due diligence and close deals. For example, I think the marketing, initial lead processing/screening, document processing, logistics, etc can be performed virtually. In the end, we are still dealing with people in tough spots, so having that human element (and not some dude/woman on a phone), IMO, is very important.It all depends on the strength of your team. Some people thrive on marketing, research, and developing systems. For others, their strength lies in combining empathy with the ability to close. Regardless, for this to function with any sort of success, what is required is a shared vision built on a foundation of trust. Unfortunately, that is probably the most difficult variable to align, and why this is probably much more difficult to accomplish in practice than in theory.Then again, you do have the ability to vet people over time (coughBPcough)...

Will Barnard · Answer

I highly recommend starting out in one area, learning that area like the back of your hand, and build your teams, contacts, and buyers there. Then advance to another areas trying to do too much will likely result in you spinning your wheels or making big mistakes.

Phil B. · Answer

Thanks Will. I'll check out your info.I'm interested in picking out 2 or 3 markets and putting a system in place. It may be too aggressive of a plan at my early stage though. Well see.

Phil B. · Answer

I tend to agree. My initial thoughts were all about systems as well. If you take great pain defining, refining and implementing a "foolproof" system, it might be able to get done properly. I also agree you need the boots on the ground aspect, even if its just one reliable and well trained person in the local area to be your go-to guy. If you are making money by expanding to other areas, a decent salary and a piece of the profits could buy this kind of talent possibly.