Becoming a real estate virtual wholesaler is no rocket science — no license, no capital or a huge learning curve required — basically no obligations. Oh, and it’s pandemic proof!
However, actually being successful as a real estate virtual wholesaler is a totally different ball game.
This is the focus of this insightful article. We are going to share expert advice on how to navigate the virtual wholesaling real estate landscape like a pro and get it right the first time without breaking the bank or pulling your hair out.
Traditionally, wholesaling real estate is the act of finding properties selling under low market value, getting the property under contract (for example, a house), and then selling the rights of that contract to buyers at a higher price and pocketing the difference.
Virtual real estate wholesaling follows the same pattern as traditional wholesaling, except that in this case, everything is done virtually. That means you don’t need any upfront capital for logistics and can work beyond your local area, and sometimes, borders.
Statistics from the National Association of Realtors show that an average realtor spends up to $1400 on vehicle expenses alone. For those traversing the whole currently, transport expenditures can quickly pile up and reach $6,290. Fortunately, as a real estate investor, you can avoid all these expenses altogether by switching to virtual wholesaling.
As a virtual wholesaler, instead of moving around seeing houses, you only need to spend your time on the internet looking for motivated sellers. For instance, within a few hours on Google, you can get the contract rights on a property worth $100,000 and assign the contract rights to another buyer for 110,000 and pocket $10,000. This is just one wholesale deal. The more deals you close, the more money you’ll make. Similarly, the more deals you close the higher your reputation as a virtual wholesaler, translating to a sizable wholesale fee on every deal.
Virtual wholesalers can find property owners who want a quick cash buyer on various online platforms, such as Multiple Listing Service (MLS) resources, Facebook Marketplace and Craigslist among others.
There are many ways of making money as a real estate investor, among them wholesaling, wholetailing, and flipping. As noted earlier, wholesaling entails getting the rights of a property’s contract and transferring them to a motivated seller to earn a wholesaling fee. Virtual wholesalers typically do this online.
On the other hand, wholetailing means getting a property for a lower market value and doing minor cosmetics before selling it. This real estate investment strategy works well if you can get a cash buyer. Flipping includes buying a property and renovating it fully before selling it. Comparing the three, becoming a real estate wholesaler sounds less cumbersome and demanding in terms of expenses.
Becoming a virtual real estate investor is the simplest among other options, such as wholetailing or flipping. A virtual real estate agent can work from anywhere because the whole virtual wholesaling process happens online.
That said, here is what you need to become a virtually wholesale dealer in real estate.
It will help if you have excellent digital marketing skills to profit from wholesale properties selling. This includes leveraging multiple online marketing tools that can give you access to homeowners, as well as motivated sellers on the go.
A stable internet connection will ensure that you're in business 24/7 to engage potential sellers.
Although you can work with a PC, a smartphone is convenient and can even scan various documents, such as selling contracts from the title company. Moreover, a smartphone will help you harness the full power of SMS marketing in the real estate wholesaling business.
NB: It’s worth noting that you don’t need a real estate license to become a virtual real estate wholesaler. You’re good to go with all the tools above.
While real estate deals can be lucrative, every strategy has its advantages and kickbacks, whether traditional wholesaling or real estate virtual wholesaling.
The advantages of real estate virtual wholesaling include:
Probably the biggest advantage of virtual wholesale real estate is that you don’t need cash for buying properties. Most importantly, you don’t even need a real estate license.
Unlike flipping houses traditionally, selling properties in wholesale virtually is fast and comes with little to zero expenses. You don't need to do any renovations or pay for transfer costs. You only reassign the selling contract rights.
Real estate virtual wholesaling doesn’t limit you to your local market. In fact, your target audience is typically spread across multiple markets outside your area.
None of your money is involved in virtual wholesaling. At the same time, you don’t need to worry about your money tied up in a property that you intended to flip but can’t get a ready cash buyer.
Virtual real estate wholesaling has its drawbacks too, including:
Even if you have a consistent deal flow in virtual wholesaling, other real estate investing options such as flipping will still bring in more money. Moreover, you’ll still need to cater for marketing costs, which can sum up pretty quickly, especially when you’re just starting.
It’s never a guarantee that you’ll close real estate deals with this strategy because most homeowners prefer dealing with cash buyers. You’ll need a convincing wholesale deal if people are going to trust you with their property contract rights.
In virtual wholesaling, you don’t know the kind of property you’re dealing with. For instance, you can get involved (indirectly) in the purchase of a distressed property, something that can taint your reputation in the real estate industry.
Ambitious entrepreneurs with limited resources often turn to virtual wholesaling. But how do you start virtual wholesaling real estate? You’ll need to:
Selling properties in wholesale real estate virtually can be pretty daunting at first. Even if you have some background experience in real estate investing, dealing virtually is different because you’re targeting sellers outside your local area. That said, it will help if you learn from an experienced investor with a proven track record. Check the last five deals they closed to determine whether it's worth learning from them.
Alternatively, you can approach other real estate investors who are interested in co wholesaling. That means you’ll always split responsibilities, starting with you taking less demanding tasks until you fully understand the game. Moreover, a seasoned partner can even refer you to homeowners when you finally branch out to start on your own.
After learning the game, build a list of potential homeowners that you can target with your offers. Just like any other real estate investment strategy, the longer the list, the higher the chances of closing multiple deals in virtual wholesaling. Most importantly, target homeowners in areas with complementary infrastructures, such as parks, fitness centers, or schools.
A successful virtual wholesaling process requires streamlined marketing. Choose whichever option that is likely to convince a homeowner to trust you with their property, such as SMS marketing. You might also need email marketing if you’re going to get selling contract rights from a title company.
Virtual real estate wholesaling doesn’t involve cash buyers. That means it might take time before your efforts eventually pay. Moreover, many homeowners will turn you down the first time you are approaching them. Either way, be consistent with your marketing to build a name in the industry.
Build trust and relationships in the industry to close more deals with sellers who can access multiple cash buyers. Depending on your reputation, you'll even refer to other sellers directly from time to time.
It goes without saying that clients are always happy when you solve problems for them. Approach homeowners as a problem seller and they’ll be more than willing to sign a wholesale contract instead of approaching a direct end buyer. For instance, you can help them with filing property taxes or deal with any bottleneck that hinders them from selling their property, such as a stubborn tenant.
As a beginner in real estate wholesaling, it will help if you optimize your marketing strategies if you’re going to close deals with potential sellers who have ready cash buyers. Remember, sellers will often take on your deals only if they have potential buyers in mind who are interested in your real estate products.
You can employ various marketing strategies for real estate wholesaling, such as SMS or direct mail campaigns. Text messages have a higher open rate of up to 97%, translating to more real estate deals.
Even better, you can leverage a platform, such as SmarterContact to send multiple text messages to your target audience simultaneously. The platform serves as a one-stop SMS marketing tool for real estate investors that need to send bulk messages to prospects and manage the campaigns from one easy-to-navigate interface. It also comes with a skip tracing feature that helps you verify the contact information of your leads to ensure you always reach the right people.
With pocket-friendly prices, a wide range of innovative features and a shallow learning curve, Smarter Contact is one of the best solutions out there for real estate investors to reach prospects and close deals with minimum effort.
Unlike traditional wholesaling, you don’t need money to become a virtual wholesaler, save for a few marketing costs when you are beginning. In that case, you can turn to business lenders and pitch the idea of wholesaling real estate to them. However, you can still get started without a marketing budget. You can take a cold marketing approach by texting and calling homeowners directly from your phone.
You don’t need to be a certified real estate agent to start closing wholesale deals. However, background knowledge and certification in real estate can help you close more deals because many homeowners prefer dealing with licensed real estate agents. But still, many people want to buy houses in the real estate market—go for it even without prior experience.
Virtual real estate wholesaling typically happens in external markets. It won’t make sense if you want to transfer selling rights virtually in your local area because the potential sellers will definitely want to meet you in person.
Definitely yes. Look at it as a hustle that doesn’t follow the 9 a.m. to 5 p.m. rule. Even better, you can do business traversing the globe, provided you have reliable internet connectivity, as well as effective marketing skills.
Virtual wholesaling is a seamless and unique way of making money in the real estate industry as opposed to traditional wholesaling. All you need are virtual networking skills to engage property owners, as well as motivated sellers with ready home buyers. Even better, you get a wholesale fee even before the real estate agent gets a cash buyer.
Leverage SMS marketing to reach out to your target market instantly. Moreover, SMS marketing is powerful when exploring a new market, thanks to higher delivery and opening rates. SmarterContact is your number one SMS platform with the highest conversion rate in the real estate industry. Sign up for a free trial today and begin your virtual wholesaling journey.