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Since there are very few wholesale deals in my area, I’ve been trying to do wholesale deals virtually in other areas. Once I get the property under signed contract via the mail, I then market the property on-line and send prospective buyers to view the property. Generally the buyer tries to deal directly with the seller and I get cut out of the deal with nothing. How can I handle this virtually wholesaling?
The only way you can handle wholesale flips virtually is to have someone on the ground in that market who shows the properties for you. It could be another investor or a real estate agent. But you have to worry about them stealing the deal too. You need to make it perfectly clear what they will get for showing the property, getting the contracts signed by buyers, and getting everything turned in to a title company (which you select). Have a written agreement.
You do not ever EVER want to put your buyers in contact with your sellers.
We just posted some new training about virtual investing in the premium section.
If there are not many wholesale deals in your area, you could switch to doing Highest Bidder Sales instead. You get the same (or better) results with non-wholesale type properties.
There are a couple of things I would recommend with doing these types of deals.
1) As Jackie mentioned, you will need someone else to show the property besides the owner/seller. Maybe a notary, home inspector, or someone else that can be that “boots on the ground” person in that market.
2) You can have the seller sign a memorandum of option or other notarized, recorded document that the local title companies will not go around.
3) Once your seller signs the agreement, get the paperwork to a title company to check title, and then have the seller sign the closing documents. Just instruct the title company to hold the documents until you actually want to close. Let the buyer know that the title company will have them ready so that the closing can occur when you want it to. This will help put the seller in a mindset that the house is already sold.
Also, these types of deals are much better with vacant houses. If the seller still lives in the house, its much more difficult to keep from getting cut out of a deal.
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