If you want to learn how to start getting into virtual real estate investing and you are a beginner in real estate investing you are probably thinking “How do I do this? How do I invest in property when I'm in Texas and I'm buying property in Nevada?”
In order to really get a good idea of a real estate market, there are basic things you can do online. There are good resources.
Zillow is the best real estate website out there right now. Another good real estate website is Redfin. Redfin will give you good data. If you want to pay for some data, Realtytrac will give you some good real estate data. There are other good companies to purchase real estate data out there as well.
What you are looking to do is find out what type of real estate market the area is. For example, what the demographics are? Is the real estate market a good area for buy-and-hold properties, or is the real estate market good for fix and flips?
Personally we like real estate markets that are a combination of both homeowners and renters. St Louis for example as a pretty good real estate market where you're going to have rental properties. Properties the cash flow. You will also have properties that you can fix and flip and make profits. One of the reasons we like those types of real estate markets better is because we're going to have a bigger pool of home buyers. Which means you can market to real estate investors that fix and flip properties and real estate investors who buy and hold properties.
You will have potentially twice the amount of home buyers, than you would if you were in a market like Phoenix Arizona where not many people are buying cash flow properties. Investors in Phoenix are looking for appreciation, so they're going to fix and flip in that real estate market. Tucson Arizona you can cash flow properties. Otherwise a real estate market like Phoenix you're not really going to be able to buy cash flow rental properties.
St Louis, Philadelphia, Kansas City, Detroit Michigan and many midwest cities some you will be able to buy cash flow rental properties. This is important when you are first looking to get into a new real estate market, to have as many potential cash buyers as possible.
Everybody is worried about not having boots-on-the-ground. If you're doing a direct mail to get potential homeowners to sell to you, you will probably need to have someone local. Otherwise you will have a lower closing rate if you only try to have a homeowner sell you a house over the phone. However, if you want to get into virtual wholesaling where you don't need boots on the ground, you can buy property from MLS in different real estate markets, bank REOs and auction properties.
We can teach you how to buy at online auctions at REO Auction Academy.
If you want to have boots on the ground in a real estate market then you need to have or make contacts or maybe have relatives in a certain market where you can start investing there. This would allow you to do direct mail to homeowners. However, direct mail will have costs. For example, if you're trying to market in St. Louis, you may have to spend $3,000 to $5,000 a month in direct mail marketing in order to get your first property. It will take anywhere from two to six months in all likelihood for you to get your first property under contract. Since it takes time, it's really that fourth touch, that fourth letter that the homeowner receives that the homeowner reaches out to you.
If you are like me, I don't have the patience for that. I really don't want to wait four to six months, so I would buy off the MLS and auctions. That would be the way I would get into real estate. Then I know I can get a property probably under contract in 30 to 60 days. Potentially have my first deal pretty quickly and have no marketing cost for buying a house. The only marketing cost I might have is on the resale of a property with marketing it to cash buyers in that real estate market. To resell the property that's going to be your marketing costs and that's not going to be very much. You're probably talking about $500 or under.
There are plenty of free ways to sell a house. You can create a listing on Craigslist which is a great source and Zillow. You could do a flat fee MLS listing. So if you buy a house on the MLS for $79,000 and you bought the house for $42,000, you get it under contract and purchase the house. Then you can re-listed on the MLS again for maybe $59,000 and you will make a quick wholesale spread.
That is what we do, we buy in several real estate markets where we don't have as much competition. It takes longer to sell some of these properties and the banks are willing to take bigger reductions in price in order to get rid of the property. We sometimes invest in these rural areas and we have a different disposition model than anybody else.
MLS is one way to sell a house but in these different real estate markets in rural areas where you have aging populations there are other ways to market your house for sale and to get your phone ring as compared to just listed on Zillow or Trulia. Most older people aren't on Zillow or Redfin looking for properties. So if you want to learn more about how to do this we could teach you at REO auction Academy. We created a YouTube videos on this topic at https://youtu.be/9BcEfXhE3Co.