Virtual Wholesaling?

Question

Hello BP,

Does anyone have experience relating in this area?  With technology increasing, this seems a wise way to go.

Thanks

Chris,

Account Closed · Answer

Some people are stuck in their archaic ways of thinking and aren't willing to venture into unknown territory in order to expand, maybe they don't need to (who knows).

If you're not discouraged by the comments above mines check out this link: https://youtu.be/piHYkThW5Eg

It's a podcast about virtual Wholesaling, the real deal not some "guru" trying to sell a program.

With any business there is risk, it is possible to get screwed over but that's why you have to establish relationships, maybe you could even partner with someone on BP?

Just remember it truly becomes a business when you expand into a different market, McDonald's doesn't just sell burgers in Kentucky...

Dev Horn · Answer

I cannot make an offer on a property that either I or someone I trust as much as me (a long-time biz partner or family member knowledgeable about RE) has not personally inspected.  That's me.  So I cannot fathom "virtual" wholesaling.

However, I know a guy who does it with a well-established relationship with an inspector (contractor) that sends a standardized report with a full set of photos to him and he makes remote offers.  But it's in a city where he lived so he still knows the area very well.

That's my concern - you cannot buy real estate "blind".  If you aren't there, you need a super trustworthy, knowledgeable person who can "be you".

Davey Wilde · Answer

@Dee Miles Most of the houses we purchase come from our absentee out of state mailing so I don't meet with the sellers in person very often. All you need to do is email over the contract and have them sign it and send it back. Then take it to a title company and they can set up the account and contact the seller to let them know everything is moving forward.  DocuSign works great for being able to sign a contract on your smart phone with a swipe of your finger but they charge $30 per month for this service. The only time I've needed a mobile notary was for an elderly lady in another state who didn't have access to the internet... long story so I won't get into that.

@Dev Horn If you plan to wholesale the house, why does it matter if you can't see the property before you put out an offer? You most likely have an inspection/feasibility time period that allows you to back out and get your earnest money out.

Account Closed · Answer

What a great topic. I haven't extended outside my area just yet. I'm working on a plan and doing some research. My question is how do you go about getting the contract signed? How do you know that the seller you spoke with on the phone is actually the seller? Do they get a notary? Any help is dealing with a long distance seller would be great!

Happy Thanksgiving

Account Closed · Answer

Chris I would be careful how you go about doing wholesaling, if your paperwork and advertising are not "in order" you could be in violation of your State's real estate licensing laws.

Dev Horn · Answer

Yeah, @Davey Wilde at least for me I think you still need to see it - or have a trusted person there in market who can see it and act on your behalf.  Even if we're wholesaling, we are still "buying the house" and just because we have an inspection clause we should not be making an uninformed offer to purchase real estate.  Plus, these days other investors are striking that inspection clause altogether to better compete against wholesalers, so I cut it out all the time now and warn sellers about others using it to bail out on them (hey, all's fair in love and war......).

I think you want to be building a real estate business here, and that business will live or die based upon our integrity and our ability - that we can and will do what we say.  When I wholesale, if I don't find a cash buyer - that's now MY DEAL and I have to figure out how to deliver what I said I would to the seller.

Now, don't get me wrong - we have discovered things after we sign that make the deal completely unviable.  In those cases, I go back and sit down with the seller(s) at the kitchen table and explain to them that based up something we didn't know before, we cannot do the deal and I must cancel the contract.  This is another aspect of simply being there that I think is important.  Sitting at that kitchen table and creating win-win agreement with sellers (and sitting back down to talk if things go south...).  I love that, and I'm just not sure how that's replicated remotely.

Chris Piper · Answer

Virtual wholesaling is possible and do-able. With technology now, all you need is a smartphone. The only difference is that you will need to ballpark the repairs. If a seller says the house is perfect, expect at least $10K in repairs. Otherwise, figure $20-$30 per square foot for rehab costs. I'm sure you will be able to fine tune this with practice in a given area. But that is the safest way to estimate without seeing a property. Coogle "Virtual Wholesaling 3.0." It's a pretty simple system that shows you how to wholesale from anywhere with just your cell phone or a laptop.

Robert Edwards · Answer

Hi Colin

Over the many years in real estate in Spain, I have successfully concluded various sales to buyers, over the phone and by email, without the client coming to view the property prior to finalising their purchase. I have also done this various times on new-build projects. So I agree with you, it depends entirely on the trust of the person on the ground.

Kind regards - Robert Edwards - LPG SPAIN

Colin G Murphy · Answer

Technology is great for opening up new niches in real estate, but I´m completely with @Dev Horn on this one. Buying remotely is fine (I do it from Spain) but you should have knowledgeable people that you trust completely on the ground to inspect in person.

Austin Davis · Answer

I think its possible, but very hard. Large potential to get screwed or to screw things up. With that being said I'm in the process of engaging in the Virtual wholesaling business, kind of.  I'm in Tampa and looking to wholesale in Seattle. The catch is that I'm partnering with my best friend (fraternity brother, best man at each others weddings , I trust him with my life) who has some background in REI. I'm fronting 3/4 the marketing budget (and taking a bigger piece of the profits for the first few deals). We compliment each other weaknesses and strengths. I'm good at analyzing data, setting up processes, talking to people on the phone, tracking data/leads, analyzing numbers, etc. He's good at the rehab side of things, estimating repair costs, and he's a good salemen/ negotiator. So I'm setting up the mail campaigns, handling in-coming leads, pulling comps, and running the numbers. My friend will inspect the property, estimate costs, and then give those numbers to me  which I then use to figure out a Max Acceptable Offer. He will then close the deal, and take the deal to closing. I would not be venturing into this deal with anyone else except my best friend. I know I  can trust him and he's got the right skill sets needed to pull this off.

Virtual Wholesaling?

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