Virtual Wholesaling! Your experience?

Question

Hi guys! Im new to Real Estate & Wholesaling and I was wondering if anybody has tried Virtual Wholesailing? How did you start? What was your biggest challenge?  What would be your best tip to give me? And did you catch the solar eclipse today?

Rich Hupper · Answer

@Aisha Prince

In my experience good wholesalers are expert marketeers and market analyzers. They know what properties are worth in their current condition to certain buyers, they know what they will sell for if x work is done to it, and they know how to find the off market property owners and get in touch with them. They are like a really good broker but without the license. I bet some wholesalers are better than brokers.

Brokers use listings agreements and have fiduciary responsibilities to their seller clients, while wholesalers use purchase agreements that do not have fiduciary responsibilities.

Either way wholesalers in my opinion need boots on the ground to be effective. If they plan on assigning the contract to a rehabber they need to have a firm understanding of the rehabbers costs to get the property to sell for x while leaving enough meat on the bone for wholesale fee, rehabber profit, holding costs, and selling costs.

A lot of people online make wholesaling out to be easy however IMO, it is probably the hardest part of the game. You are dealing with the owners trying to get property at a price that works for all parties. This becomes especially challenging when there is very little equity in the property due to a large mortgage.

Andrew Franzen · Answer

There are tons of people who have virtual wholesaled. Lots of people do it exclusively. If you listen to the Biggerpockets Podcasts, you will hear different individuals discuss it. If you get the resources in place and some boots on the ground, youll be off to a good start. You just have to put in the work upfront!

@Anson Young discusses it in podcast 34 some. He's a good resource, take a listen...Also could check out Chris Chico for good resources but you'll also be spending some money there (guru warning)

Either way, have fun, educate yourself, and keep driving forward!

Account Closed · Answer

This is a great question and, being new myself, I'm curious about this as well.  Do you plan to just invest in CA or expand out-of-state since you're looking at doing it virtually?

John Thedford · Answer

Here is the Florida statute making it illegal to advertise and market properties you do not own regardless if you have a contract on it:475.43 Presumptions.—In all criminal cases, contempt cases, and other cases filed pursuant to this chapter, if a party has sold, leased, or let real estate, the title to which was not in the party when it was offered for sale, lease, or letting, or such party has maintained an office bearing signs that real estate is for sale, lease, or rental thereat, or has advertised real estate for sale, lease, or rental, generally, or describing property, the title to which was not in such party at the time, it shall be a presumption that such party was acting or attempting to act as a real estate broker, and the burden of proof shall be upon him or her to show that he or she was not acting or attempting to act as a broker or sales associate. All contracts, options, or other devices not based upon a substantial consideration, or that are otherwise employed to permit an unlicensed person to sell, lease, or let real estate, the beneficial title to which has not, in good faith, passed to such party for a substantial consideration, are hereby declared void and ineffective in all cases, suits, or proceedings had or taken under this chapter; however, this section shall not apply to irrevocable gifts, to unconditional contracts to purchase, or to options based upon a substantial consideration actually paid and not subject to any agreements to return or right of return reserved.

Some of the cheerleaders have chimed in, but unless they know state laws in each state, obviously cannot give good advice. There are also others that believe they can break state laws if they don't live in FL and cannot be held accountable. Wrong. They can be charged with a felony for brokering without a license. Other states have enacted similar laws to deal with FRAUDS AND SCAMMERS that try to skirt state laws and broker without a license. Most operators that use the word "wholesaling" know it is actually code for unlicensed brokering.

Aisha Prince · Answer

Account Closed You are probably right its just I live in California and Its really expensive. And I noticed most people that do wholesale do it across the country.

@JohnThedford Wow that sucks but thank you, Would you say your best advice would be to just get a broker liscense?

Matt Horwitz · Answer

If you're starting out I strongly recommend against virtual wholesaling. You have so much to learn and are out of the loop to start... going into a new market without your feet on the ground and detailed knowledge is usually a mistake for most. Start local. Stay focused. Stay patient.

John Thedford · Answer

Odd are it would be illegal in many states. I know the BP cheerleader group will chime in, but giving bad information and promoting illegal activities isn't the best business advice.

John Thedford · Answer

Odd are it would be illegal in many states. I know the BP cheerleader group will chime in, but giving bad information and promoting illegal activities isn't the best business advice.

Rich Hupper · Answer

What is virtual wholesaling? All your marketing is done online? No paper? Or you never visit the property but manage to get the owner to contract with you?

Virtual Wholesaling! Your experience?

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