Virtual Wholesaling in Real Estate: A Comprehensive Guide

Virtual wholesaling in real estate is an innovative strategy that allows investors to buy and sell properties without being physically present at the location. This method has gained popularity in recent years as technology has made communication and transactions more seamless. Essentially, virtual wholesaling involves sourcing off-market deals, negotiating with sellers, and assigning contracts to buyers—all online.

What is Virtual Wholesaling in Real Estate?

In wholesaling, you’ll sign a purchase contract for a property, then reassign it to another investor or final buyer for a higher price. The difference (minus expenses) is your profit. For example, if you sign a purchase contract for a commercial office space for $300,000, and then reassign it to another investor for $330,000, you’ve made $30,000 in gross income. Typical wholesaler fees are 5% to 10% of the total property price.

Real estate wholesalers often look for distressed properties priced below market value to maximize returns. These properties often need significant renovation, and the owner is often motivated to sell directly to a wholesaler instead of through a real estate agent.

Virtual wholesaling is the same concept as traditional real estate wholesaling, except that you don’t have to be physically present at the real estate site or wholesale where you live. Instead, you’ll use the internet, email, digital signatures and Zoom calls as needed to close the deal.

How Much Money Can I Make With Virtual Wholesaling?

In theory, you’ll have unlimited monetization opportunities with virtual wholesaling. Whether you wholesale one property per year or one per week is up to your skill and the options you locate. Average wholesaling profits are $5,000 to $10,000 per deal or about 5% to 10% of the property value.

Starting virtual wholesaling of real estate involves in-depth market research and networking to establish connections, but the growth potential is unlimited.

Real Estate Virtual Wholesaling Step-by-Step Process

If you’re interested in virtual wholesaling of real estate, this step-by-step guide can help you get started.

1. Market Research and Analysis

Begin by researching and analyzing target markets. Use online tools and data sources to assess market trends, property values and demand. Talk to local real estate agents and network with other wholesalers to understand what to look for and where to find off-market opportunities.

At this stage, check local market regulations to understand whether you need a wholesaler’s license or registration to reassign contracts in a specific area.

2. Building Your Network

Establish connections with local real estate professionals, including agents, appraisers and contractors. A strong network enhances your ability to gather accurate information about properties. Attend regional real estate investing conferences and join online groups to continue to build your network.

3. Lead Generation and Acquisition

Employ online marketing strategies, such as search engine optimization (SEO) and social media campaigns, to generate leads. Focus on distressed properties or motivated sellers.

You can also generate leads by paying someone to drive through target neighborhoods and reach out to owners of properties with deferred maintenance, asking about opportunities. Also consider specialized sites for real estate wholesalers with a dedicated suite of tools like PropStream, LandGlide, Realeflow and DealMachine.

4. Property Evaluation

Leverage virtual tours, photos and property reports to evaluate the condition of potential deals remotely. Consider working with a local real estate agent or appraiser who can give you their professional opinion on the state of the property.

5. Negotiation and Contract Signing

Engage in effective negotiation to secure properties at favorable prices. Once agreed upon, ensure contracts are assignable to other buyers, as this is the essential point for real estate wholesaling.

6. Marketing to Buyers

Craft compelling property listings using high-quality images and detailed descriptions. Leverage online platforms to attract potential buyers, including Zillow, Realtor.com and others.

7. Assigning the Contract

When a buyer expresses interest, assign the contract to them for a fee. This fee serves as your profit. Generally, the wholesaler’s fee will be 5% to 10% of the property value.

8. Closing the Deal

Facilitate the closing process between the buyer and the seller. Ensure all legal requirements are met. In most wholesaling transactions, closing can take between seven and 30 days depending on the buyer and seller’s situation.

9. Scaling Your Virtual Wholesaling Business

As you gain experience, consider expanding your operations to different markets and diversifying your investment portfolio across types of wholesale properties and real estate investments.

Advantages of Virtual Wholesaling

The advantages of virtual wholesaling come down to the flexibility to earn real estate investment returns from home. Here's why you might consider virtual wholesaling:

Geographical Freedom

Virtual wholesaling breaks down geographical barriers, allowing investors to tap into lucrative markets nationwide without being limited by their physical location.

Lower Overhead Costs

Traditional real estate transactions often involve significant costs, such as travel expenses and office overheads. Virtual wholesaling eliminates many costs, contributing to higher profit margins and simplified administration and management.

Wider Deal Pool

Investors can access a broader range of properties, increasing the likelihood of finding profitable deals that align with their investment goals. Instead of limits based on where you can drive, you’re free to wholesale across the country or around the world.

Efficient Marketing

Online platforms and social media channels provide efficient avenues for marketing properties, reaching a wider audience of potential buyers and sellers.

Time Flexibility

Virtual wholesaling allows investors to work on their own schedules, making it an ideal option for those with other commitments. You can do virtual wholesaling as a side hustle while working full time or around scheduling needs like children’s school.

Disadvantages of Virtual Wholesaling

Virtual wholesaling, while appealing for its convenience and flexibility, comes with its own set of disadvantages that wholesalers should be aware of.

Lack of Personal Relationships

Building rapport with sellers and buyers can be challenging in a virtual setting, where interactions are often limited to emails, phone calls, and video conferences. This can result in miscommunication, delays in closing deals, and a general lack of trust between parties.

Technical Difficulties

Relying solely on online platforms and technology increases the risk of cyber threats and data breaches, which can compromise sensitive information and disrupt business operations. Additionally, poor internet connections, dropped calls, and glitchy video conferencing can impede clear and timely communication between wholesalers and clients.

Limited Ability to Physically Inspect Properties

Without being able to physically inspect a property, investors may miss out on important details that could impact their investment decision. Issues such as hidden damage, structural issues, or environmental concerns may not be easily identifiable through virtual means alone. This limited ability to thoroughly evaluate a property could lead to unexpected costs or complications down the line, potentially affecting the profitability of the investment.

Is a Real Estate License Required for Virtual Wholesaling?

Whether a real estate license is required or not for virtual wholesaling depends on the regulations of the state in which the transactions take place. In many states, real estate licensing laws specifically address wholesaling activities, making it necessary for wholesalers to hold a valid real estate license. This is because wholesaling involves the solicitation of properties for sale, negotiating contracts, and facilitating the transfer of real estate interests, all of which are generally considered real estate brokerage activities that require a license.

However, some states have exemptions for individuals engaging in wholesaling activities as long as certain criteria are met, such as not advertising properties for sale, not representing themselves as real estate agents, or limiting the number of transactions completed in a year. It is crucial for virtual wholesalers to research and understand the specific licensing requirements and exemptions in their state to ensure compliance with the law and avoid potential legal issues.

Virtual Wholesaling Real Estate With No Money

One of the biggest attractions of virtual wholesaling is that you can get started with no money. You can do it part-time, on weekends or build a full-time virtual wholesaling business. Take virtual wholesaling real estate step by step and be patient to locate the best opportunities. With time, it can be a fulfilling career and a profitable income stream. Consider also managing rental properties, real estate investment trusts (REITs), buying your first rental property or real estate crowdfunding for other real estate opportunities.

Frequently Asked Questions