Real Estate Wholesaling

Virtual Wholesaling: How to Wholesale Properties in Any Market From Afar

Expertise: Personal Development, Real Estate Wholesaling, Real Estate Investing Basics
96 Articles Written
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Hot markets can be fabulous for investors—buy and hold owners, for instance, can score a sweet deal selling. But wholesalers may struggle to compete against the tide of eager buyers. Worried? Don't be. Virtual wholesaling may be for you if you're you seeing these trends occurring in your market:

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  • Response rates lowering on your direct mail campaigns
  • Sellers are not as motivated as they were a year ago
  • Sellers stating they are receiving too many marketing pieces.

These trends indicate a seller’s market—which means your deal flow and ROI may decrease and your marketing budget may increase. Our solution: Virtual wholesaling.

Related: 7 Tasks Wholesalers Can Easily Outsource to Virtual Assistants

What Is Virtual Wholesaling?

Virtual wholesaling is similar to traditional wholesaling—except in a different market. (Note that beginners may be ill-suited for this strategy.) Facilitating a transaction involves manipulating many moving pieces. To succeed, you need excellent conversational skills, great networking abilities, and an organizational mindset.

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My Virtual Wholesaling Experience

I speak from experience: While I live in Phoenix, I currently working another market—my hometown of Chicago. As I am writing this article, I have one property set to close today in Phoenix, one set to close in Chicago, and two more in Chicago under contract.

So how did this come about?

It occurred literally by accident. About a year ago, I began posting some of my Phoenix success stories and testimonials on Facebook. A lot of my Facebook friends live in Chicago, and they asked if I could buy their houses. At the time, I was focused exclusively on the Phoenix market.

When a close friend of the family wanted out of an inherited house, I worked on the project as a courtesy. I was timid at first. This was a close family friend, and business and family normally don't mix. I had never wholesaled virtually, so I had no connections with title agents or attorneys, and I didn't want to over-promise and under-deliver. She sent me pictures and had confidence in me, so I got to work.

Building My Virtual Wholesaling Team

I faced the fear and began to assemble my team. How hard could it be?, I thought. Here’s who I gathered.

1. Title company

The title company I use in Phoenix is a national title company, so I knew I could use them. First, I contacted my local escrow agent, and she connected with an agent in Chicago. After that, everything went smoothly (for a bit)—I had the property under contract, and the title company was in place.

But different metros have different laws, standards, and regulations. Chicago is different than Phoenix. In Phoenix, the title company does all the title work, but in Chicago, an attorney has to facilitate the transaction.

This was my first road block. I remained positive—but I needed to find an attorney.

2. Attorney

The Chicago title agent recommended three attorneys. I interviewed each one and finally decided on who I wanted to use. Boy, did I make the right decision! During our conversation, he explained some key differences between Phoenix and Chicago, which helped me understand the process a lot more. For example, in Chicago, you have to pull a water certificate during closing. After that, we discussed fees and what we both needed to close the transaction. We shook hands, and I immediately sent him the contract and wired the title company the earnest money deposit.

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Related: How to Find Your First Real Estate Wholesale Deal

3. Partners

Everything was in place, but the biggest piece missing was the buyer. I knew the deal was solid—a slam dunk with tons of equity. The house was in a great neighborhood, and the price was already solidified. But I seriously had to find a buyer or all my work would be in vain, and I wouldn't be able to help this close friend.

Drawing on my experience with doing deals in Phoenix, I used the internet to market the property. First, I posted ads on Zillow and Craigslist and joined a Chicago Facebook group of wholesalers and investors. But I didn’t find a buyer—I found someone better. A JV partner. After we spoke, I learned he had a very solid buyer’s list. He would move the property. We agreed upon a 65-35 percent split, with me securing 65 percent, and signed the JV agreement. We were in business.

Having an in-place tenant made the transaction easier, too, because I didn't have to have boots on the ground. However, since this transaction, I have found my boots-on-the-ground guy in Chicago—my best friend. He was very interested in learning real estate, and we agreed that he would receive 12 percent on the profit of every deal. His responsibility is to walk the property, meet with the sellers to take pictures, meet buyers, and secure the contract. He is doing a fabulous job.

I think back on what would’ve happened if I hadn’t overcome my fear and ventured into virtual wholesaling. I would be scrabbling to try and work with a 0.5 percent response rate in Phoenix. The majority of my marketing is to Chicago, and I’m doing more deals there than in Phoenix and doing less work to secure more profits.

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What is stopping you from virtual wholesaling? What resources do you think you need to be successful?

I can surely answer those questions for you and many more.

Marcus Maloney is a value investor and portfolio holder of residential and commercial units. He has completed over $3.3 million in wholesale transactions. Currently, Marcus is a licensed agent who ...
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    Bailey
    Replied over 3 years ago
    Great article. In my research, I can’t seem to find a ton detail on how to actually wholesale. Do you have any suggestions on where to find motivated sellers from afar? Is there ever a point where you have to actually go to the city or can you do everything virtually? What mid west cities would you suggest is a good starting point? Thank you
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied over 3 years ago
    Bailey, I did go to Chicago just to meet the Attorney face to face so we could get a feel for each other. However it was not needed. You can find leads at listsource.com, rebogateway, and experian. There are other places as well. You will need to know what you demographic is going to be before pulling list. St. Louis, Kansas City, Milwaukee these are all good cities. I suggest if you haven’t done a deal to start in you own backyard first. You can get more info about wholesaling at equityrealestateblog.com
    Paul Merriwether Investor from Oakland, California
    Replied over 3 years ago
    You wrote >> I posted the property on Zillow and Craigslist. <> Why marketing homes on social media that you don’t own or just have a contract on is 100% illegal<< It appears you fall in to this category. As an ex realtor in CA … as I read your article it sure appears to me you were acting as a real estate agent for hire. A client approached you to sell their property. You took on the task some what reluctant that suggested no license or authority to do so in another state. You might want to contact John Cochran The King of Systems at realestateu (dot) com for his upcoming webinar to make sure you're legal. I have no connection to him or his company. I'm only an interested party in real estate transactions and making sure if I were to do any wholesaling with an active license it's legal. Wishing you continued success.
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied over 3 years ago
    Paul, Thank you for your input, as a wholesaler the contract was wrote as my company (which is registered with the state) and/or assignee as the buyer. I had equitable interest in the property and did not falsify my credentials as an active agent in that state. We legally marketed the contract for assignment and not the property. Which is completely legal and ethical. Again thank you I could see how someone (not implying you) would need clarity on facilitating a wholesale transaction.
    Randy Phillips
    Replied over 3 years ago
    I’m amused how realtors or ex realtors think they are experts in re law. If you have a contract on a property with a small earnest deposit you have equitable interest. You have the legal right & can advertise that property on any medium and even hold a sign on the corner wearing a gorilla suit. Realtors take note… stick with what you do for your chump change and leave us investors alone. I have virtually wholesaled several properties so far and will definitely do more. For me it was a simple process, I advertised for bird dogs to find properties. I give them instructions what I’m looking for. I email my contracts and let the buyer use his Title company, the bird dogs will take photos and do the leg work, the last deal my bird dog and I made $3,000 each. It was a junk house with a bad roof that sat empty for many years, inside was completely destroyed by the rain. There was also another wholesaler involved that found it and he made 6K. seller got 6K and we split 6K. Buyer was a local rehab contractor and was happy to get it at 18K Of course we tried to get more, but the house was in such bad condition. Everybody walked away happy.
    Jessica T. from Bronx, NY
    Replied over 3 years ago
    Hey there, This was very helpful. I live in NYC, but was planning on wholesaling some properties outside of my area due to the high prices and the limited amount of personal capital I have to invest. However, you suggested starting in your own backyard, I’m sure for obvious reasons. What are some suggestions you have for people that live in a high priced area that want to start wholesaling?
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied over 3 years ago
    Jessica, Great question, even with high priced areas the process is still the same. You may have to furnish more earnest money to lock down the deal but remember its all relative because the earnest money is never at risk unless you exceed you inspection period. I have put up no to very little earnest and I have put up 5,000 knowing that I will always receive back what I put. I did however learn a great lesson in the beginning. I put up $5000 EM on a 700k house and overlooked my inspection period time by a day and lost $5000. Again this was in the beginning my 2nd deal. I was crushed and almost gave up but through that lesson I learned to focus on my inspection period day. If it seems as if I will not make the deadline I will either get a signed extension from the seller or pull out the contract. Also in high market areas why not look a little further out this usually works.
    Vernon Miller
    Replied over 3 years ago
    Great article! Love the idea of wholesaling in different areas that could be more productive. Really liked Randy Phillips advise , spot on! Like the rock band Lynyrd Skynyrd says ‘ don’t ask me no questions and I won’t tell you no lies’ Equitable interest can be in many legal forms as a realestate investor. Again Great article..
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied over 3 years ago
    Vernon, thanks for reading
    Randy Phillips
    Replied over 3 years ago
    This may be of interest to wholesalers. I received a call and letters from the Ca realtors board demanding I bring in all the hud statements and copies of checks I received. He tells me they got reports of me selling real estate with out a real estate license. I explained the term, equitable interest to him, he acted like he never heard of it. I told him how I as an investor was operating legally and he had no jurisdiction over me. He then tells me to show him in the real estate book where it says I can wholesale re w no license. I was getting annoyed. He threatened me with a subpoena and a cease and desist order. I told him he would be liable for harassment against an investor acting legally. I wrote a complaint to the state board against this guy. I never heard back from any of them. Don’t allow realtors to intimidate you. Get out there and make some Money… Rando
    Morenike Arraheem from Richmond, Virginia
    Replied over 3 years ago
    Do I need a business licence to wholesale, or can I just submit a DBA? Asked this in a new post, but haven’t gotten a reply yet.
    Morenike Arraheem from Richmond, Virginia
    Replied over 3 years ago
    I am just starting out and needed to see this, I am studying for my real estate license so the term equitable license is valid and made perfect sense. Great info!
    John David Mueller
    Replied over 3 years ago
    Thank you for this.
    John David Mueller
    Replied over 3 years ago
    Thank you for this.
    James Barnhart Rental Property Investor from Deland, FL
    Replied over 3 years ago
    Thank you for this great article and the interesting comments.
    Fernando Marquez Investor from Kansas City, Missouri
    Replied over 3 years ago
    I live int he Kansas City area and have done 1 rehab job and 4 wholesale deals. I am very interested in wholesaling all over the country yet I really have no idea how to get started in that aspect. Can you point me in the right direction? thanks
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied over 3 years ago
    Fernando, Virtual wholesaling is using the same techniques as in your home market. The key is to find someone in the market you want to work and generate an agreement with them to assist with acquisitions and possibly disposition. This person is essential when walking the property to get photos and to aide in building rapport with the seller. This person can also help with getting a physical contract signed if needed. Most of the contract signing can be done via technology. You really need to know the state laws, if you close with a title company or with an attorney that is the biggest thing you need to know. To find this person you can use BP, and craigslist. It is really good to make sure you coach your seller on their responsibilities and what you and your team will offer. Most people are concerned with their deal being stolen from them but if you truly are looking to do volume you will find the right person that is willing to work with you as long as they know deals will close. For disposition its best to work with a local wholesaler that has an extensive buyers list that will be able to move your contract.
    Ashley Evans Real Estate Agent from Nashville, TN
    Replied over 2 years ago
    Hey Marcus, I’ve run into another one of your great articles! I always get a ton of knowledge and ideas after reading your content! Thanks and keep them coming!
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied over 2 years ago
    Thanks for reading, when ever you want to see me do step by step instructional videos I have a youtube channel as well. PM and ill send the details
    Ben Travis Flipper/Rehabber from Nashville, TN
    Replied over 2 years ago
    Hi Marcus, very helpful article. Is a boots on-the-ground guy the way this all happens? I’ve watched some gurus tryin to sell their program, i.e. Cris Chico, for virtual wholesaling and they make it sound like they somehow make offers on homes themselves just based on what the homeowner says and a few pics. I don’t know if that’s true, but if so (I’m wure some out there do), is that even possible/ethical? Thanks.
    carl
    Replied over 2 years ago
    Great article… I’m looking for a complete step by step guide on how to start and run a virtual RE wholesaling business. Can you recommend a good book or downloadable course. Thanks
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied over 2 years ago
    Carl, As crazy as this seems I just jumped since I’m from Chicago I started to reach out to some of my connections and things begin to happen. I have no problem sharing what I know. PM me and I can go over the details and send you some resources.
    Mike Snyder from Seminole, Florida
    Replied over 2 years ago
    Really liked this article Marcus and I have very much enjoyed your others! Especially since my response rate as absolutely tanked over the last year to where we can’t even get a deal going in my market. I have given virtual wholesaling Samsung in your article really is motivating me to pursue it. I know finding the attorneys, title company, buyers, except era will require legwork but my bigger question is how to determine a market area? Sounds like things worked out very well for you kind of falling into it, but if you were going to start fresh and pick another location, aside from throwing a dart at a map how would you go about deciding? Very much appreciate your advice, insight, and willingness to share! Thanks my man!
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied over 2 years ago
    Mike thanks for reading man. Picking a locale takes market research. The national market is such to where the coastlines and the coastal/south (all TX), is on fire and all the activity is starting to move to the center of the nation. Markets in the midwest are seeing increased consumer activity. So markets like Chicago, Indianapolis, Detroit, Cleveland, Nashville, Memphis, Minneapolis, St. Louis, those that are considered to be a part of the rust belt has picked up a lot of steam and some of them have been hot for a while as well like Nashville and Memphis. Although zillow is not the best for determining market value for a property they do however provide great insight on market trends. They’re good on a macro level but on a micro level their data lack consistency. Hope this helps.
    Brandy Fowler from Miramar, FL
    Replied over 2 years ago
    Awesome read Marcus, thank you. Do you recommend having a boots on the ground person in other states? Are their any other creative techniques if you dont have this person and want to maximize your margins?
    Marcus Maloney Wholesaler from Queen Creek, AZ
    Replied over 2 years ago
    Brandy, I would recommend having someone in the local market. This person is needed to validate the condition of the property and to provide your buyers access once its under contract.
    John Sterling from Federal Way, Washington
    Replied almost 2 years ago
    Wow this is an amazing threat! Great Article Marcus! Have you ever heard of a virtual wholesaler using offshore VAs to almost run the entire operation? With the exception of boots on the ground and talking to buyers. The VAs using scripts sometimes actually tie up the deals. ( Sadly all my sales friends in other fields simply laugh at me about this idea. ) If this is true, which I actually think that it is, this virtual wholesaler makes 15X of what I do? John
    Gregory Lewis
    Replied over 1 year ago
    Hey marcus how do i get started in virtual wholesaleing can tell me step by sterp
    Saheed Oseni Rental Property Investor from Dallas, TX
    Replied about 1 year ago
    Great article Marcus!
    Jessey Kwong Investor from Seattle, WA
    Replied 9 months ago
    Marcus I totally agree with building a team first. Here's an episode of 2 guys who focused hard on building their wholesaling team (they work out of Canada). A bit of a breakdown on building their team as well: http://reiconversion.com/reicon019
    Jorge Hidalgo
    Replied 4 months ago
    Your story is very interesting. I live in Managua,Nicaragua. In Nicaragua don't understand this new market or new way to wholesale online. What advice can you give me to start making money with this idea more right now? Thanks in advance. Cheers!
    Dwight Powell
    Replied 2 months ago
    Is your company formed as a foreign entity?