The Pros & Cons Of Remote Wholesaling
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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