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Real Estate Wholesaling Aug 19, 2020

Virtual Wholesaling: How to Wholesale

Properties in Any Market From Afar
Marcus Maloney
Expertise: Personal Development, Real Estate Wholesaling, Real 96 Articles
Estate Investing Basics 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:

Response rates lowering on your

direct mail campaigns
Sellers are not as motivated as Want more articles like this?
they were a year ago
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Sellers stating they are receiving
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too many marketing pieces.
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These trends indicate a seller’s market
:
 —which means your deal !ow 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 di"erent 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.

My Virtual Wholesaling Experience

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 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 #rst. 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 con#dence 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 di"erent metros have di"erent laws, standards, and regulations. Chicago is
:
 di"erent 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 #rst road block. I remained positive—but I needed to #nd an attorney.

2. Attorney

The Chicago title agent recommended three attorneys. I interviewed each one and
#nally decided on who I wanted to use. Boy, did I make the right decision! During our
conversation, he explained some key di"erences between Phoenix and Chicago,
which helped me understand the process a lot more. For example, in Chicago, you
have to pull a water certi#cate 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.

Related: How to Find Your First Real Estate Wholesale Deal

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 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 solidi#ed. But I seriously had to #nd 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 #nd 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 pro#t 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 pro#ts.
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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.

By Marcus Maloney
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 wholesales
virtually in multiple states while building his investment portfolio. He has
also converted some of his deals into cash-!owing rentals. Marcus holds
seven rentals, two of which are commercial units. He’s even purchased a
school, which was converted into a daycare center. His overall goal is to
turn what is a marginal pro#t into a signi#cant equity position. He
leverages the equity by using the BRRRR (buy, rehab, rent, re#nance,
repeat) strategy to increase his portfolio without any money out-of-
pocket. Marcus has been featured in numerous podcast such as the
Louisville Gal Podcast, The Best Deal Ever Podcast, The Flipping Junkie,
and many others. He contributes content regularly to his YouTube
channel and blog.
Read Less

32 Replies

Bailey
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 Replied over 3 years ago

Great article. In my research, I can’t seem to #nd a ton detail on how to

actually wholesale. Do you have any suggestions on where to #nd
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 #nd 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
#rst. 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
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 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.
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 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 de#nitely do more. For me it was a simple
process, I advertised for bird dogs to #nd 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

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 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 di"erent 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..
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 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

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 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

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 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 #nd 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 #nd
this person you can use BP, and craigslist. It is really good to
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 make sure you coach your seller on their responsibilities and
what you and your team will o"er. Most people are concerned
with their deal being stolen from them but if you truly are
looking to do volume you will #nd 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

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 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 o"ers 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.
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 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 #nding 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 #re 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
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 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 o"shore 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 #elds 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 10 months ago
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 Marcus I totally agree with building a team #rst. 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 3 months ago

Is your company formed as a foreign entity?

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