virtual wholesaling strategy

14 Replies

I've just jumped into virtual wholesaling! I've researched and I'm a little stuck I wanted to know are there any auction sites that I can wholesale from it's a little hard trying to get hard money loans for auctions.

@Ashley Walker you need to look into the terms and conditions of the online auction sites. Some of them only require a $2,500 hold on your credit card and then you have a period of time to actually close on the transaction or you lose your earnest money deposit which I believe is typically around either a $1,000 or a set percentage of the purchase price. That's "time to close" is really your wholesaling window. 

All that being said you do not have to buy properties on online auction sites in order to do virtual wholesaling. Virtual wholesaling is about leveraging online resources and delegating responsibilities to boots on the ground. You could also partner with local wholesalers and co-wholesale their inventory to your buyer's list in specific areas. 

Hope it helps!

State laws will come into play where the property is located. Many states prohibit advertising properties you do not own unless licensed in that state. It isn't as easy as everyone says. Where are the multi-millionaire "wholesalers". Even though I COULD legally wholesale, I make a LOT more money doing buy and hold rentals. All that takes is OPM.

@Marvin McTaw    few additions to your post

we buy ALOT from auction sites.. not only do you have the 2500 which they process and that is per deal.

but the EM in most cases is 10% or about 5k per deal as well.. not often is it 1k and actually I have never seen it.. but then again I am not buying 20k houses either.

Then you need to have a REAL proof of funds and you need to then CLOSE in the name of the company you provided proof of funds in.. you can't assign.. and with the off shore or nationwide title companies they use.. double closing is virtually impossible.

So for me I like Auctions they keep the no money wholesaler out of the game and allow us access to the inventory without running up prices from those that can't actually close.

@John Thedford   John do you follow auction sites ?

@Jay Hinrichs

Not at this time. Most of my debt is short term private money. They will start dropping off the spread sheet next year allowing me to pursue more if I wish. I am shedding about 100K a year but on top of that this year is going to be hell for Capex. Can you spare me a dime?

@John Thedford   whats cap ex.... Oh ya that's for those that own rentals  forgot.. having just liquidated all of mine.. not looking to go back into that game.

Originally posted by @Jay Hinrichs :

@John Thedford  whats cap ex.... Oh ya that's for those that own rentals  forgot.. having just liquidated all of mine.. not looking to go back into that game.

what are my options? Liquidate and pay uncle SCAM a huge amount? 1031 into a larger deal is tough because selling a bundle of SFR at once is tough unless the price is reduced. If I have do that, might as well eat the tax. I love my rentals and playing monopoly with REAL money and REAL ESTATE--but if I had to do it all over again, I would want a HML EMPIRE you you!

@John Thedford   that's one thing I don't think people look ahead at when they launch into the rental game.. recapture..  once your in you can't get out.. and then if you buy in a non appreciating market and then you tire of them and want to sell you will pretty much LOSE money .. flat out..

Or you need to do the long game and set up for your Heirs.. or you can look at a Charitable remainder trust.. many of my wealthier clients have used that strategy ... I bit the bullit this year cost me over 100k in tax.. but now I am out of YOKE around my neck and never have to deal with a tenant or PM again..

NOTES Baby the only way to go.. make money pay tax and relax.. LOL

Originally posted by @Jay Hinrichs :

@John Thedford  that's one thing I don't think people look ahead at when they launch into the rental game.. recapture..  once your in you can't get out.. and then if you buy in a non appreciating market and then you tire of them and want to sell you will pretty much LOSE money .. flat out..

Or you need to do the long game and set up for your Heirs.. or you can look at a Charitable remainder trust.. many of my wealthier clients have used that strategy ... I bit the bullit this year cost me over 100k in tax.. but now I am out of YOKE around my neck and never have to deal with a tenant or PM again..

NOTES Baby the only way to go.. make money pay tax and relax.. LOL

My goal: give the properties to the wife and kids. Hope they don\t have me for that:)  although I do think of selling out. Our market is crazy high. Would make life easier, but in all reality it isn't that bad being a landlord IF you are lucky enough to get good people you can retain. 

BTW Jay,..debit is at 10% of FMV. Just mostly short term.

@Jay Hinrichs thanks for the update. I certainly appreciate it! I haven't used auction sites in about two years to find inventory and even then I still didn't win any because I thought the prices people were willing to pay were crazy at the time. 

@Marvin McTaw   has not gotten any better.. we find our buys are best at 200k and above.. weeds out the competition.

Interesting because I just thought of something similar and just bought 3 houses from a website. I just started using BiggerPockets to find people in those areas to team up with! I am excited to win 3 bids today!

I purchased 8 properties from auction sites in 2017. There are markets where the prices paid are crazy high, but there's also some deals to be found. I love that you're only competing with real cash buyers, not trying to compete with wholesaler offers who cannot close. The bid deposit is almost always at least $2,500 and the cheapest EMD is typically $3,000 due within 48 hours with POFs, even on cheap properties. A few of the auction sites are pretty organized, a few others are very unorganized and known for delays in closing. I purchased one that took over 6 months to close.

Originally posted by @Jeff Filali :

I purchased 8 properties from auction sites in 2017. There are markets where the prices paid are crazy high, but there's also some deals to be found. I love that you're only competing with real cash buyers, not trying to compete with wholesaler offers who cannot close. The bid deposit is almost always at least $2,500 and the cheapest EMD is typically $3,000 due within 48 hours with POFs, even on cheap properties. A few of the auction sites are pretty organized, a few others are very unorganized and known for delays in closing. I purchased one that took over 6 months to close.

 @Jay Hinrichs

References for the auction site preferences Jay and Jeff?

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