Virtual wholesaling can sometimes scare real estate investors – mostly because of the virtual part.
But the reality is: virtual wholesaling is totally do-able. And it can help you build a successful business in various areas of the country.
Still, before you start virtual wholesaling, it’s crucial to do your research, learn the ins and outs of this business strategy and make meaningful local connections in your virtual market.
Hey Moguls, Cris Chico at your service, and I recently did a great lesson about virtual wholesaling, which I encourage you to quickly read. It’ll be useful with the series I’m about to kick off…
To help you get your virtual wholesaling business off the ground, today we’re talking about the 5 simple steps you should implement. Because each step is essential, I want to spare no detail. So this post will be #1 of a 5-part series. Be sure to check out the other parts to come to get an all-encompassing look at virtual wholesaling.
So, what are the 5 steps for creating a virtual wholesaling biz? They are:
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Find Highly Motivated Sellers
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Find the Best Cash Buyers
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Implement the Right Marketing
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Work Less by Using Systems
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Make Offers & Close Deals
Now – not to keep you waiting any longer – let’s dive into the first step of virtual wholesaling: tracking down practically desperate sellers.
Virtual Wholesaling Step #1: Find Highly Motivated Sellers
One thing’s for sure: there are a lot of ways to find property deals.
A few that you’re probably familiar with are:
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Pre-foreclosure lists
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Bankruptcy lists/bankruptcy attorneys
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Eviction lists
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Divorce lists/divorce attorneys
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Delinquent tax lists
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Fire damaged properties
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Probate lists/probate attorneys
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Code violations or health code violations
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Tax liens
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30/60/90-days’ late
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Mortgage brokers, Realtors, builders, investors
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Vacant properties
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Quit claim deed
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Sheriff sale lists
Although there is value in using a list like these, the fact is... you cannot go after every person or every property on this list!
As someone who has made that mistake, let me repeat myself: You don’t want to go after everything on this list.
A better idea is to focus on one or two of these areas. Learn everything there is to learn about your one or two methods of choice, figure out how to do them well, and then you can eventually add more strategies for finding motivated sellers with amazing property deals.
Just the Tip of the Iceberg? Not Good Enough
When it comes to the seller leads I listed above, I would even go so far as to say – you might be better off not pursuing any of these methods. These lead sources have a few HUGE problems, such as:
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Heavy competition with other investors
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A lot of manual labor (like placing bandit signs)
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Dealing with rejection (especially with FSBOs)
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It’s hard to do a larger volume of deals with these
Let’s talk about disadvantage #1 in that list for a second...
The lead sources I listed above are the ones that most investors target:
Imagine an iceberg, which is made of two distinct parts – the small tip that’s visible above the water and the large mass that’s hidden underwater. Those lead sources represent the tip of the iceberg. They’re highly “visible,” which means everyone and their mother goes after them – creating heavy competition for you.
everyone and their mother goes after them – creating heavy competition for you.
But if you want to be an exceptionally savvy REIer, you need to go after the “underground seller leads.” What I mean by that is... the leads that other investors aren’t thinking about. In the iceberg analogy, these leads would be the massive part of the iceberg that’s under the waterline.
To discover the “bulk” of the iceberg, you need to:
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Determine which type of seller lead is available in abundance in your particular virtual market.
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Make sure your lead source is something that other investors don’t realize they should target.
So, the million-dollar question is: Which is the best type of seller to target?
And the Award for the Most Motivated Seller Goes to...
...the tired landlord.
Think about it: When a landlord is at the end of their rope with tiresome tenants, repetitive repairs and monotonous management of their property, this is the perfect time for “opportunity” (a.k.a. you!) to knock on their door.
Why are tired landlords the best type of leads to pursue? Well, there are many reasons:
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They are easy to find.
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You can start small and then ramp up as you do more deals.
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You’re not in competition (as much) with other real estate investors.
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Most investors market to them in an absolutely wrong/horrible way.
When I’m looking for the best property deals, I don’t go after just any landlord. To find the best opportunities, look for tired landlords with these characteristics:
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Owner of single-family, duplex, triplex or fourplex properties (stay away from commercial properties).
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They have owned the property for at least 10 years (the longer, the better).
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They own the property in their own individual name (not as a corporation).
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A property/properties in zip codes that have the most investor buyer activity (because this shows that the neighborhood is highly sought after).
As you continue to work with tired landlords, you’ll discover even more characteristics that are desirable for securing the best property deals.
Don’t think of it as taking advantage of tired landlords – instead, think of it as solving a problem for them. When you score an amazing property deal and the landlord rids himself of the rowdy 20-something tenants that are destroying his house, everyone wins!
Recap: How to Meet Your (Motivated Seller) Match
So remember: Don’t go after every method of finding leads. It’s way too overwhelming, and you won’t reap the benefits you’re hoping for.
For me, what worked best was focusing on 1 area of leads – particularly, the tired landlord.
Now this is just one piece of the virtual wholesaling puzzle. Next time, I want to chat about finding the best cash buyers. That’s another bit of insight that you don’t want to miss – trust me.
Ready for the Motivated Seller Hunt?
It’s time to start building your motivated seller list. What are some of the best methods you’ve discovered for finding highly motivated sellers? Let me know in the comments section below.
Drive for Dollars. Take some time to cruise around your desired zip codes, and take note of any interesting properties that have “For Rent” signs, including the phone number. You never know when a tired landlord might answer the phone.
Compile Your List. It doesn’t have to be 10 pages long. Don’t set unrealistic and unattainable expectations for yourself. Just start with a short list of high-quality seller leads.
Get to Work. Make it a priority to strike up a convo with a tired landlord every day. You’d be surprised how quickly the property deal leads start coming in.
Cris Chico
is a successful real estate investor in Florida who specializes in wholesaling in local and long distance markets. Over the last two years he successfully flipped 116 properties and generated over $1,452,108 in profits. He rarely personally inspects any of the properties that he flips or meets with any buyers or sellers. In fact, most of the markets that he operates are thousands of miles away.