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Buying Property? Why It Always Pays To Meet The Neighbors First

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on Thursday, 27 April 2023
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It is almost always best to get boots on the ground and meet the neighbors of a property before you make new acquisitions.


Failing to do so can bankrupt you fast. It only takes one or two duds weighing down your portfolio, or eating up all of the profits and cash flow from your other flips to really kill your flow.


So, how do you balance these best practices with efficiency? Why is meeting the neighbors so important and valuable?


Remote Versus Local Wholesaling

Virtual or remote wholesaling has become far more popular in recent years. Especially thanks to COVID lockdowns, new technology, and real estate investing courses promoting it.


It works. It can be hyper efficient and profitable. Especially at high volumes. However, while buying property sight unseen can be great in so many ways, it can also be risky.


Fortunately, you can find some balance. There are still ways to get the best deals and most fast, without getting lumbered with dead weight properties. For example, going out to meet the neighbors of a pending deal after you already have a contract signed with contingencies on it. Or hiring local contractors to go out and do some leg work for you.


So, why can meeting the neighbors make all the difference?


Avoid Grossly Overpaying

The last thing you want is to proudly show up at a property you just closed on, only for the neighbors to tell you that you paid double what it is worth.


Identifying Problem Neighbors

It is not uncommon for there to be problem neighbors. Some just don’t want neighbors or may be mad because they hoped to buy the property themselves. They can make it hard to do what you want with the property, or can actively block resales or rentals, versus becoming allies. You don’t want to be stuck with a property that you can’t flip or rent.


Problem Properties

There’s only so much you can see on Google maps or other virtual tools. There is only so much that you can see in person on any given day and time. Neighbors have a lot more information on whether there have been environmental problems, frequent flooding, or other issues that you just would never uncover until it is far too late.


Summary

By all means go fast and do a high volume of real estate deals remotely and out of your immediate area. Though, whether it is yourself, or a team member, meeting the neighbors before you close on a new deal can save you large amounts of stress and money, or cost you everything if you neglect it.

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The Pros & Cons Of Remote Wholesaling

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on Wednesday, 07 August 2019
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Virtual or remote wholesaling is becoming a hot trend. Many influencers are pushing it as the way to get into real estate and scale your business. What are the real pros and cons?

Remote wholesaling is promoted as being a way to flip houses and invest in real estate right from your phone or laptop. Using the best transactional funding you can even get 100% financing for your deals, even with no credit. Find deals online, then flip them to cash buyers online, get paid fast. Is it really that easy? What are the advantages and disadvantages?

The Pros of Remote Wholesaling

Little Cash Needed

There are always some small expenses when doing business. That may be covering your due diligence and phone and WiFi bill or initial deposit. Though, being able to use 100% financing dramatically reduces risk, and makes it possible to profit from real estate on a large scale, even if you are strapped on cash and credit

Invest Anywhere

Being able to invest from your phone or laptop online means you can do deals anywhere. If your local market is tapped out for deals or just too competitive, you can start doing deals in another market this afternoon.

Invest From Anywhere

You can also use this strategy from anywhere you have an internet connection. On the beach in Nicaragua, from your cabin in the country or in another country with less taxes. You never have to commute or being tied to an office again.

Easily Scalable

All of the above makes this strategy easily scalable. It means being able to do 10 or more deals a month. Even more if you start automating and building a team around it.

The Cons of Remote Wholesaling

Understanding the Local Market

It’s great that you can use this strategy to invest anywhere, but do you really understand the dynamics of supply and demand in Alaska, Hawaii, or rural Tennessee? It still may be wise to specialize in markets you know and understand.

Knowing What You are Buying

It can be hard to know what you are buying from 1,000 miles away. You can’t afford to visit potential deals all over the country every day. If you don’t know the condition it is hard to make a wise offer or to be able to resell at a good price. Make sure you make up for this with better online due diligence and using local partners.

Having the End Buyers

There are millions of properties to buy across America. Even in some strong markets bank owned property levels have gone up 150% this year. Yet, cash buyers have also shrunk by over 40% in some of these markets. The key to wholesaling and using transactional funding is having a strong buyer list. Make sure you have them lined up and are thinking about how will be buying your deals in 6 months and 6 years from now, not just today.

Standing Out with Good Messaging

Thousands of people are being turned onto remote wholesaling every week. You can copy a direct mail template that 1,000 of your competitors will use, or put up the one millionth ‘we buy houses for cash’ website and try to compete against the likes of Zillow, who is happy to lose $2B this year to starve you out of business. You may not get far unless you find a way to stand out and be unique. That includes your direct mail, phone scripts and making winning bids on properties.

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Should Wholesalers Inspect Properties Before Flipping?

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on Thursday, 14 February 2019
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Is it worth getting a home inspection if you are wholesaling houses? Many don’t. Yet, there could be far more profit it in than you think. Here’s why, and how much difference it could make to you…


The Pros & Cons of Virtual Wholesaling

Virtual wholesaling or ‘real estate day trading’ has become much more popular in the past few years. This is essentially just finding and flipping houses online. Often out of area and sight unseen. That has worked well for some. Especially in a speculative and fast growing market. Though if you track ads for properties on Craigslist, you may find some have been stuck with them for a year or more.


Un-inspected, sight unseen deals can be a goldmine. They can also be highly risky and become dead weight on your books if you own them. Or damage your reputation if you keep backing out of contracts.


The Value of Personal Inspections

Even if you aren’t a professional home inspector or contractor, there is value in getting out in person to see what you are really buying.


It can reveal a lot about location and views, as well as property condition. Many things can still go unnoticed using Google and listing photos. Big things like the electric not being updated, or the fact there is only the front of a house and nothing else.


The Advantage of Professional Home Inspections

Hiring a professional local home inspector can add a lot more value than you think. It may even be more efficient than going yourself. Especially as most of the big and expensive repairs may not be seen by your eye on the surface. This includes items like plumbing, electric, roofs, mold, foundations, etc.


You may not intend to fix any of these items as a wholesaler. Yet, it can make all the difference in how fast you can flip them for, and for how much.


First of all, this is about certainty and de-risking the investment for end buyers. There is nothing that kills a sale or investment like uncertainty. That’s true for any consumer and business item. It’s the unknown that breaks you. Without knowing the real situation, any smart end buyer will have to price in the worst case scenario. That is a complete rebuild or teardown. They may still buy that, but at least they know what they are getting into.

Compare that with having an inspection and knowing the private well, electric, foundation, roof and AC are okay. Even if the rest of the house is a complete gut rehab, that can instantly add $50,000 or more in real value. Even if one of these things is an issue, the end buyer can comfortably offer a lot more. You’ll also be able to make the property appeal to a far larger buyer pool.


Imagine two listings side by side. Both distressed looking properties. One is a complete mystery. The other has a home inspection report that shows most of the mechanicals and structural items are good. Both are priced the same. Which do you buy?


That could easily make a home inspection the best ROI of anything you can do.


If it’s not possible to inspect, then you may be able to get your own remote teammate out with a camera, along with a contractor. Or ask if the seller has a recent inspection report they can provide.

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Real Estate Wholesalers: Now You Can Live Anywhere, Where Will You Live?

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on Thursday, 18 January 2018
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With virtual real estate wholesaling being made increasingly easier, investors can live anywhere they want. Where will you choose to live?

Virtual Wholesaling

Thanks to technology, real estate investors can live in one place, and wholesale houses anywhere in the country. It isn’t just possible, but more accurate than it has ever been before. For many it is an increasing necessity to be able to flip houses in other markets, and to stay diversified in multiple markets in order to keep profits up, business growing, and income consistent.

If you’ve got a laptop, or even just a phone, you can do it.

Driving Factors in Where We Choose to Live

As a mobile business owner, it can seem crazy to hear about people living in the street or out of RVs in high priced San Francisco and other cities. There is just no need to live in super-expensive neighborhoods, when you can work from anywhere. Of course, if those are the places you’d prefer to own your own home, and can afford it comfortably, why not?

Yet, for many others, there is far more profit to be retained, and earlier retirement in more affordable destinations.

Other drivers in this decision of where to have your home base this year may include property tax rates, and limitations on the mortgage interest deduction, and state and local taxes. For others it is being near family. It could be lifestyle. If you love the water, then go live in a top boating, surfing, or diving destination.

Or maybe you still want to optimize where you live for business. That may be in the heart of the most inventory right now. Or where the most investors and capital is located, so that you can build personal relationships.

Destinations

Here are some of the trending destinations this year:

Florida: for the sun, homestead exemptions, and no state income tax

Atlanta, Georgia: for a fast moving property market, fun environment, with all four seasons

Detroit: Still one of the most affordable cities in the US, and a great community of entrepreneurs

Nicaragua: One of the last truly affordable countries left in Central America

Dominican Republic: Proximity to US, easy residency requirements, weather

Thailand: Affordability, weather, culture, and a growing fan base of entrepreneurs

Where will you live?

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Make It Cyber Monday Every Day, With Virtual Wholesaling

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on Thursday, 23 November 2017
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Is virtual wholesaling what you need to make it feel like Cyber Monday, every day?

Cyber Monday is one of the biggest shopping and sales days of the year. Billions of products are bought and sold on this day each year, and the numbers are only growing. It has been severely underutilized by the investment and real estate industry, but holds massive potential for investors. If only every day was like Cyber Monday, investors could be finding a lot more deals, and moving a lot more inventory.

Virtual wholesaling could be the ideal strategy for investors who want to increase their business, and incomes, with the ease of shopping and selling online.

This is also the perfect real estate strategy for those who may have been reluctant to invest before, or who feel held back from their full potential by thinking they have to do certain activities they don’t really care for. Not everyone is an extrovert who loves working on the phone or in-person networking and sales. Others hate the hands on maintenance and tenant hassles and liabilities associated with traditional fixing and flipping or DIY landlording. Some would rather just use email, a mobile phone, or a website and outsourced assistants to make money in real estate. All those are options with virtual wholesaling.

One of the biggest benefits of this approach that may mean the most to many investors is the freedom to invest anywhere, from anywhere. It means you can profit from the most profitable markets as they change, yet live and travel wherever you like.

Wholesaling is also considered the lowest risk real estate investment strategy. It enables investors to get in, out and paid in just days or hours. There is no exposure to market changes. No worrying about getting stuck with a dead weight property.

Perhaps most importantly, wholesaling offering many financial and liquidity advantages. It doesn’t matter how much money you start out with. Sooner or later it gets tied up if you are paying cash for properties or plow it into rehabs. With transactional funding investors can use 100% financing, without needing to tie up their credit, waste time with conventional loans, or burn resources trying to raise private money.

It may not be for everyone, but there are many advantages and perks of virtual wholesaling. If you are doing any shopping this Cyber Monday, or wish your bank account was a little more flush, it’s worth thinking about this as a strategy.

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Using Virtual Real Estate Wholesaling

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on Thursday, 04 May 2017
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When certain trends start to pop up in your market, you could turn to virtual wholesaling. These trends include:

Lower response rates for direct mail marketing

Sellers say they are getting too many marketing offers

Sellers don't seem as motivated as they were last year

These trends often point to a seller's market, which means deal flow will start to decrease. As a wholesaler, this means your marketing budget will go up and your ROI will go down. When this happens, it may be time to pivot into virtual wholesaling.

What is Virtual Wholesaling?

Virtual wholesaling is similar to traditional wholesaling, but allows you to enter into a different markets, remotely. It will include many moving pieces to successfully facilitate the transaction. If you have great conversational skills, excellent organizational skills and the ability to network, you can use virtual wholesaling to your benefit.

Building a Virtual Wholesaling Team

Before you even think about handling a transaction, you need to build your virtual wholesaling team. This team will need to include:

A Title Company

An Attorney

Wholesale Partners

In some cases, your local title company will work great, if they are a national company. However, if they don't handle title on the national level, you will may need to find a title company that does.

An attorney is the next member of your team you will need to find. Getting a local attorney, in the market you're working in, requires good recommendations, which may come from the title agent or even the real estate agent in the local market. Make sure to compare a few options before adding an attorney to your team.

Along with your title company and attorney, a few wholesaling partners can be helpful. Having local JV partners to help you will make selling in a new market much easier. Make sure you put a solid agreement in writing about how you will split the profits.

Enter a New Market with Virtual Wholesaling

Real estate has historically been up and down, favors the buyer one year and the seller the next. As a wholesaler, you have to stay on top of your market, but you don't have to be limited to just your local real estate market.

With virtual wholesaling, you have the ability to enter into any real estate market you want. All you have to do is build your virtual wholesaling team first. Not only will you have the ability to wholesale in a new market, but you may also be able to increase your rental portfolio and even start flipping properties.

 

Authored by Best Transaction Funding BestTransactionFunding.com is the leading source of transactional funding for real estate wholesalers in the US, where 100% financing, and saying “Yes” is what we love doing all day long.

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