Wholesaling real estate is a great way to become a real estate investor. However, this fact is becoming increasingly obvious, and competition is growing across the United States. Additionally, as inventory quantities change nationwide, serious investors are looking for options outside their local markets.
Thankfully, they don’t have to travel to other states to find great deals. Wholesaling virtually allows investors to find opportunities in any market, no matter where their business is located.
If you’re interested in virtual wholesaling real estate, this step-by-step guide will tell you everything you need to know to take your real estate business beyond your local market.
Generating virtual wholesale real estate leads
Traditional wholesaling involves generating leads locally by driving for dollars, attending property auctions, placing bandit signs in highly trafficked areas, and leveraging your network. These strategies can be highly effective because you know your local area and the neighborhoods where you are most likely to find motivated sellers.
However, wholesalers who live in competitive real estate markets and smaller suburban or rural areas often run out of opportunities. Many of them are now using real estate lead generation software to identify opportunities in and outside of their local markets, otherwise known as virtual wholesaling.
Virtual wholesalers start generating leads by selecting a city they want to invest in. Then they use their lead generation software to filter properties based on a combination of distress factors and property or owner characteristics. Finally, they compile these properties into lead lists.
Lead generation platforms like BatchLeads also give users access to quick filters so they can filter opportunities based on common distress factors. These quick filters include pre-foreclosures, absentee owners, probate listings, etc.
One benefit of virtual lead generation is how fast you can put together lists. Another benefit is the control you have over how specific or broad your lists become. In BatchLeads, you can generate property lists based on as many or as few criteria as you want. You can also access property information you would never find simply by canvassing a local neighborhood.
Skip tracing wholesale real estate leads
The next step in virtual wholesaling is getting property owners’ contact information, including phone numbers and email addresses, and close relatives’ information. This process is known as skip tracing.
To skip trace a list of real estate leads, you’ll need a reliable skip tracing service or a lead generation platform with reliable skip tracing data built-in. Then all you have to do is choose the properties you want contact information for. You’ll receive a completed report within a few minutes.
Skip tracing your real estate leads is simple, but you should carefully choose a reliable data provider. Many skip tracing services only return right-party contact results 2-18% of the time. Thankfully, choosing a reliable service is easy. With a proprietary combination of tier-one data sources and in-depth public records, BatchService provides market-leading accruacy and a pay-per-match guarantee so you can trust that your skip tracing data is reliable.
Marketing to motivated sellers
Once you have a property owner’s contact information, you’re ready to launch your marketing campaign. There are several marketing strategies you can leverage to reach out to sellers.
Direct mail is highly effective because it gives property owners something they can keep. They may not be ready to sell when they receive your mailer, but if they’re considering it, they may keep your letter or postcard and call you when the time is right. Real estate investor Scott Oots reports that this is common when his business sends direct mail campaigns.
Cold calling is a tried and true real estate marketing method. It gives you the chance to start building a relationship with your contact immediately. However, cold calling is a skill-based strategy, and it will take time to master this marketing channel. We recommend using scripts you can trust to help you get started. Once you get comfortable cold calling, this will be one of your most successful marketing strategies for virtual wholesaling.
Texting has the highest deliverability and connection rates of any marketing channel. In fact, most people read their texts within five minutes of receiving them. Texting is also a great way to start the conversation before calling your leads so that your cold call doesn’t feel as cold.
However, you should be aware of how new regulations have changed SMS marketing, especially in real estate. Knowing the best practices to follow before you get started will help you make the most of your time and maximize your ROI.
Signing real estate contracts in other states
Once you launch a marketing campaign and agree on a price with a motivated seller, you’re ready to place the property under contract.
While most states are friendly to wholesalers, some have laws you should know about. Do your due diligence before signing a contract so you don’t end up with a wholesale deal you can’t follow through with, or worse, are legally required to buy.
Wholesale real estate laws you should know
Wholesale real estate laws vary from state to state, but there are a few best practices you should always follow:
- Don’t bring the buyer to the deal before you sign a contract with the seller. If you do, you’ll be acting as an unlicensed real estate agent, which is illegal.
- Verify how many deals you can do per year in the state. Some states require you to have a real estate license before you exceed a certain number of deals.
- Include a clause in your real estate contract that clearly states your intent to double close or assign the contract.
- Disclose if you are a real estate agent
- If you are a real estate agent, be careful not to mix the two roles, especially when acting as a seller’s agent. As a seller’s agent, you are responsible for getting your client the best possible price on their home.
Finding cash buyers
Congratulations! Once you sign a real estate contract, you’re ready to assign it to a cash buyer.
Ideally, you should have a cash buyers list before you sign a contract, but if you’re new to virtual wholesaling in an area, you may need a property to offer before you’ll catch anyone’s attention.
Thankfully, finding cash buyers virtually isn’t as hard as it seems. Real estate lead generation software like BatchLeads has built-in filters that reveal cash buyers and prospective investors. You can also reach out to real estate agents in your target area for help connecting with buyers.
Once you find a cash buyer, show them the deal, and then get ready to negotiate. Just like wholesalers, cash buyers are looking for a great deal, so be ready to talk them into a better offer.
Pros and cons of virtual wholesaling
Virtual wholesaling is a great way to expand beyond your market, but there are some downsides you should consider.
First, it can be hard to determine the quality of a deal if you can’t see the property in person. Property photos and details can help, but you’re still missing some information. Thankfully, satellite view and street view can help fill in the gaps.
Second, you may not know the surrounding area as well as you think. Local trends often affect property values in ways you don’t expect, so if you’re wholesaling virtually, you should learn as much about the local area as possible. This isn’t as hard as it seems. Network with local real estate agents or join local Facebook groups. People love talking about what’s happening in their market.
Despite these risks, virtual wholesaling has some great benefits. It lets you invest anywhere, focus on whatever area is hot at the moment, and consider new markets if yours gets oversaturated or the assignment fees are too low. With virtual wholesaling, you’re in complete control of your business at all times!
Virtual wholesaling is a great option for wholesalers who want to expand beyond their market. Wholesaling pros like RJ Bates III have mastered this approach and closed hundreds of deals as a result.
If you’re ready to expand your wholesaling real estate business, just remember to choose a lead generation system you can trust, market effectively, and always pay attention to state and local real estate laws. If you follow those simple steps, you can leverage virtual wholesaling to build the real estate business of your dreams.