The Ultimate Guide to Virtual Wholesaling
Jared Vidales operates a virtual wholesaling business that completes 15 virtual deals per month. Although, when he first began wholesaling, he only focused on his local market, Arizona. After partnering with an online marketing genius, Jared took wholesaling into the virtual realm, which he as been able to turn into a profitable, full-time real estate business. Fortunately, in our recent conversation, he provided a specific approach that any investor can follow to replicate his online wholesaling success. This includes the leads process, building a team, and a step-by-step approach from lead generation to assigning the contract.
The Virtual Wholesaling Leads
The main reason why Jared decided to take wholesaling online was due to the substantial difference between the typical offline leads and online leads. When Jared was wholesaling deals strictly in his local market, his offline lead generation approach was the same as everyone else’s – direct mail, door knocking, bandit signs, etc. The problem with offline leads is that they are proactive. Therefore, not every letter, door knock, etc. will even result in a lead, let alone a deal. However, with online leads, it is reactive. Every online lead that they receive is completely motivated. It is someone that is actively looking on Google on “how to sell his or her home.” Therefore, almost everyone is going to sell. It is simply a matter of whether or not there is equity in the deal and if the deal can be monetized.
The Virtual Wholesaling Team
Currently, Jared’s virtual wholesaling team consists of 5 employees, and he is looking to hire 2 more. For businesses that require employees, you must take overhead into consideration. You cannot scale the business unless you have the deal flow to support it. If not, you are going to be underwater.
Initially, Jared and his partners were performing all the job duties. They were answering and making phone calls, making offers, getting the contracts, and selling the properties. At that point, the lead volume was very low. However, as the company started ranking higher on Google, leads started increasing. Subsequently, the increase in volume of calls coming in, amount deals to manage, and number of closings were too much for them to handle.
As a result, they made their first hire – a leads manager. The leads manager was the first hire because Jared and his partners wanted to remove themselves from any of the inbound/outbound initial phone contacts. Contacting leads is extremely easy to automate through scripting. This hire allowed the partners to focus on more critical tasks – negotiation and selling the deal.
The second hire was an acquisitions person. Their responsibility is to call homeowners, negotiate deals, build rapport, and lock up contracts.
After creating the leads management and acquisitions team, Jared and his partners found that the next critical task was managing title and finding buyers. Therefore, the next hire was a transaction coordinator, whose responsibilities include managing the title process from start to finish, as well as being the point of contact for the seller. They also hired a disposition manager, who focuses solely on selling properties.
The final hire was an underwriter, whose role is to calculate the purchase price.
The Virtual Wholesaling Process
On average, Jared and his team receive 40 to 50 leads per day. To support such a high volume, he has created a virtual wholesaling process that every single incoming lead flows through.
When a lead is received, the lead management department initially receives it. The benchmark for incoming leads is two-fold. First, every inbound call must be answered. Secondly, anyone that submits an online web form must be called within 5 minutes. Jared finds that for every minute after 5 minutes, the ability to make a deal significantly decreases. When calling the lead, the goal is to qualify them and gather all the property information (i.e. property condition, motivation level, etc.). After the call, the lead management department will upload all of the information to the CRM.
The next step of the process is underwriting. The underwriter, using the information uploaded to the CRM and market research, will come up with a fair purchase price.
Since this is a nationwide wholesaling operation, it is the underwriter’s responsibility to learn and understand the subject market. To accomplish this task, the underwriter reaches out to the local real estate agents, investors, contractors, etc.
After the underwriter has determined what they will offer for the property, the lead moves to the acquisition department. Using the number calculated by the underwriter, they will negotiate the purchase price and structure a contract. Overall, the acquisitions department’s goal is to get as many deals to fit within their specific buying model as possible.
If the contract is accepted, the deal goes to the transaction coordinator. They will call the homeowner, introduce themselves and the company, tell them who they are, and reiterate the purchasing process. The last thing you want is for a homeowner to be in the dark on the process. If so, they will be calling constantly wanting to know what next steps are, which is a complete waste of time and inefficient. Therefore, the transaction coordinator eliminates all of those questions up front. Also, they are responsible for the entire title process.
Finally, the lead will be sent to the dispositions manager. Their sole focus is on selling properties. They are constantly on the phone, managing existing buyer relationships, making new buyer relationships, and finding buyers to assign the properties too.