It sounds almost too good to be true: investing in real estate remotely, making thousands or hundreds of thousands per year, all from the comfort of your own home? How is this possible?!
Remote work options are increasing for Americans in all industries! Pre-COVID, the United States saw approximately 4.7 million Americans working remotely at least half of the workweek.
However, in the ever-changing climate of 2020, experts expect this number to skyrocket as more companies move to a semi-permanent or permanent work-from-home structure, and as employees prove that productivity can happen outside the traditional cubicle.
Experts predict that approximately 40% of the US workforce is now working from home during the pandemic.
Self-employed professionals, such as 1099 contractors and real estate investors, are no different. With the right systems, teams, and work ethic in place, these professionals can leverage modern technology and run their real estate investing businesses virtually. Yes, it’s possible and it happens every day!
For example, the investment team at Real Estate Skills have completed virtual deals in more than twelve states! Some of which required very little time investment (just a few hours) and yielded thousands, even hundreds of thousands of dollars per deal!
In this Ultimate Guide, we’ll walk you through the ins-and-outs of virtual real estate investing and how you can create virtual deals within your own real estate business.
After reading this article, you’ll understand:
Let’s jump right in!
Virtual real estate investing is putting together and closing real estate investment deals remotely.
Any of the traditional real estate investing strategies (such as wholesaling, rentals, house flipping, probate, or foreclosures) can be done virtually, meaning that your physical presence is NOT required in order to find an investment property, create a deal, and close it successfully.
Virtual real estate deals are great for busy investors because it frees up their time and allows them to enjoy a balanced life while making money.
Virtual real estate investing also gives the investors incredible freedom as they can work multiple markets across the country and work independently on their own schedule. It’s a win-win scenario!
"Live where you want to live and invest where the numbers make sense."
You don’t need a whole lot to get started in virtual real estate investing. You can start with the following essentials:
Once you have your basic home office setup, researching different virtual real estate investing strategies is an important next step. Get clear on your goals and focus on the Real Estate Skills you want to master.
Ask yourself the following questions:
Do I have the skills to analyze and move forward on a deal? How much money can I invest in my virtual real estate business? How much time am I willing to dedicate to my virtual real estate business? What do I want my day-to-day work to look like? Do I have prior experience that relates to one investment strategy over another? Do I know of any friends, family, or real estate professionals that are in the business? What's my motivation for getting into real estate? Do I want to play a passive role or an active role in my virtual real estate investing business?
Depending on your answers, you will choose an investing strategy, such as:
Finally, you will need to set up a comprehensive marketing strategy and target market to pursue. For example, targeting absentee owners utilizing a yellow letter marketing campaign in a specific city near you is a great lead generation strategy to get started.
You may also find it useful to have a few online programs ready including Docusign, DotLoop, and access to the local Multiple Listing Service (MLS) in your target market. Online search platforms such as Google Earth, Zillow, Realtor, or Redfin could also be useful as a starting place for searching for properties.
Virtual real estate investors can access thousands of properties for sale in different markets using websites like Redfin.
It is also critical to have a “boots on ground” team in place if you decide to invest in real estate virtually. Since you will not be physically present, you must put together an all-star team of professionals who can act on your behalf, deliver honest news quickly, and help you make great investment decisions to close deals.
For example, an investor purchasing rental properties remotely will likely enlist the help of a property management company. Virtual real estate flippers will work with a network of wholesalers or real estate agents in the local market where they are flipping. Flippers will also work closely with contractors and home inspection services to evaluate and renovate the properties they flip.
For deal management, a real estate investor will need to find and work with solid, investor-friendly title companies who service their market.
They may also consider hiring a virtual assistant to tackle many of the tasks and random “to-do’s” (such as social media management or running errands) that pop up and require immediate attention.
Finding a professional and dependable group of people to be your support team is essential for building a virtual real estate business. Start by networking and asking investors you know for referrals in the market you are servicing.
Image of DotLoop dashboard with transaction “loops”. Transaction software like DotLoop allows teams to customize documents, create templates, manage deal timelines, and organize digital signature processes. This saves the virtual investing team time and effort and ensures everyone is on the same page!
You can also conduct your own due diligence online and look for verified reviews. You can also ask professionals to provide references and then follow up with those sources.
There are many investing strategies you can complete virtually. We’ll cover several below:
Virtual Wholesaling is a great way to get started in virtual investing.
Wholesaling is a real estate investing strategy where an investor locates an investment property and gets it under contract for sale. The investor then assigns the sales contract to a third party investor who actually purchases the property. The wholesaler is paid a “finder’s fee” when the deal closes.
Virtual wholesaling is just like regular wholesaling, except all of these steps---acquisition, negotiations, locating the third party buyer, and closing the deal---are all done remotely using a computer and phone!
Syndications and crowdfunding are investing terms that have been used interchangeably in recent years. While the two terms are related, there are slight differences. Think of the two terms as related, but not the same.
Crowdfunding is the first step towards creating a syndication. Crowdfunding will be covered in more detail below.
Syndication is the actual investing relationship created between investors when creating a real estate investment project. Crowdfunding is the sourcing of these investors.
Syndicators tend to focus on and invest in large-scale projects like storage unit buildings, apartment complexes, or new construction developments (such as mixed-use residential and commercial spaces).
Syndication investors can make money in a variety of ways, and terms will vary from project to project. Investors may be offered a combination of equity with a negotiated minimum return or a portion of the net profits.
Syndication investors tend to not be involved in daily operations. Syndication projects will be run by a seasoned investment team. These projects will have been vetted and analyzed extensively. A project manager is typically assigned to oversee and run the investment project from start to finish.
The syndication team will create and put out a Private Placement Memorandum (PPM). This outlines the project details, legal considerations, risk considerations, investment requirements, and expected returns for the investors. This document is put out to draw interested investors together.
Syndication takes place when the investor actually signs over an investment for a portion of the partnership in the deal. The investor agrees to the terms and conditions of the syndicate.
Syndication investors can invest in a variety of projects across the country and each set of project terms will vary. Investors can diversify from market to market, syndicator to syndicator, and project to project.
Most investors in syndicates are hands-off, and they leave the day-to-day operations and management of the investment project to the project manager and syndicate team.
Crowdfunding is defined as a group of individuals pooling resources to fund a specific project. Any type of project can be crowdfunded, not just real estate. Many real estate syndications start as crowdfunding efforts.
Different crowdfunding groups will have different financial thresholds for participation. Many crowdfunding groups will only allow accredited investors (individuals defined as having a net worth of at least $1M or at least two years’ of annual income exceeding $200,000) to participate.
Others may allow unaccredited investors but will have other criteria that must be met.
To understand what an accredited investor is, how to become one, and what rules have recently changed, watch this YouTube video:
Purchasing rental properties, utilizing both long-term and short-term/vacation rental strategies, can be done virtually. Airbnb and VRBO are examples of vacation rental property management opportunities that can be lucrative for a virtual real estate investor. This allows an investor to cast a wider net geographically and invest in a real estate market that may not be geographically close.
In order to invest in rental properties, an investor must understand how both appreciation and cash flow work. It is also critical that the investor conduct a comprehensive analysis on each subject property and all related expenses.
Underestimating rental expenses such as tenant vacancy and repairs, can put unprepared investors in the red very quickly. Novice investors can also severely underestimate the cost of doing business with vacation rental platforms like AirBnB or VRBO.
Virtual house flipping is when investors purchase a home, typically out of the area from their local, physical market. They then fix up the property and resell it at a retail market price, or its after repair value (ARV). Essentially, virtual house flipping is the same as regular house flipping, except the investor is not physically present.
Because the investor may be overseeing rehab work from afar, it’s critical to interview and work with a licensed contractor who is honest, fair, and charges reasonably for all work completed.
Conducting lengthy interviews and asking your network for solid referrals will help in locating great contractors who will complete work on time, professionally, and without you having to look over their shoulders constantly.
A Real Estate Investment Trust (REIT) is a publicly-traded company that operates and invests in income-producing real estate such as commercial properties or apartment complexes. REITs are publicly-traded like stocks and can be purchased through a broker.
REITs offer a lower-risk and more “hands-off” approach to virtual real estate investing. This approach is run more as a passive investment and requires very little if any, physical presence. REITs are typically attractive to investors seeking more passive income without getting too involved in the day-to-day management process.
This can be considered an unconventional way to invest in real estate and is more suited towards those investors who already have significant reserves available. Essentially, you can be a real estate investor and a lender.
You can become a hard money lender and lend out your own capital at higher interest rates than a traditional bank would offer another investor. You can also participate in peer-to-peer lending groups where other investors will bring their deal to the group and request investment funds.
Lending is a great virtual strategy because it is flexible and can be done on your time. As the lender, you control the lending terms including interest rates, payback timelines, and loan origination fees. This can be a lucrative strategy to add to your portfolio while you run other real estate investment deals.
For investors interested in getting started in crowdfunding, websites such as Fundrise and Roofstock have outstanding reputations in customer service and platform ease of use. NerdWallet put together a great list summarizing a few of the top crowdfunds available now. More details on a few of these options are outlined below.
For investors seeking options around acquiring rental properties or distressed properties for rehabbing and flipping, a great starting point is to start networking with a local real estate investing group or real estate agent in your target market.
Many Real Estate investor Associations (REIAs) now have an online presence where you can register and learn where upcoming events will be held.
Real estate investing groups can help investors connect with private money lenders, become part of cash buyer lists, and learn about new inventory coming up. Real estate agents can provide access to the MLS for investors.
Other online platforms, such as DotLoop, can provide virtual transaction management solutions to remote investors. These services help the investor organize paperwork, stay on top of contract dates and deadlines, and quickly transfer and store electronic copies of paperwork for signature.
Finally, here is a shortlist of additional online investing platforms you can check out:
FundRise offers three distinct investment plans with minimums as low as $500. It is a great option for non-accredited investors. Investors invest in project portfolios across the country. Investors make money in one of two ways:
To learn more, start with the FundRise Starter Plan.
Roofstock is a virtual marketplace where investors can purchase rental homes (or homes to flip) from afar. Roofstock’s team presents an analysis of each property with comprehensive reports on recent inspections, rental income information, and potential challenges the investor will face if/when the property is purchased.
To learn more, start with Roofstock’s “How It Works” section and then browse the open marketplace for current inventory.
Crowdstreet allows accredited investors to purchase into both individual deals and portfolio offerings. The minimum investment amount to get started is $25,000. Average annual returns are healthy, ranging from approximately 11.5% to 26.4%.
To learn more, start by reading about CrowdStreet’s rigorous deal review process.
DiversyFund does not have net worth restrictions so it is open to everyone and anyone who wants to start real estate investing! Investors can start with $500 which will be placed exclusively into REITs. Investors make money on the net profits from the asset portfolio which are then divided up and divvied out.
To learn more, start by exploring DiversyFund’s method for paying out returns.
RealtyMogul has an outstanding reputation for thorough due diligence, meaning its investors can have peace of mind and know they have made strong investments. RealtyMogul’s minimum is $5,000 to invest, and the company sees average returns ranging from 4.8% to 8%.
To learn more, start with RealtyMogul’s Core Four criteria for due diligence.
Virtual assistants (VA) are independent contractors hired to perform specific tasks for a company. These tasks are typically administrative in nature and the VA is usually paid an hourly rate.
For investors who are engaging in virtual real estate investing, it can be very common to utilize the services of a team from all over the country and in different time zones.
An investor’s team consisting of assistants, lawyers, title companies, contractors, realtors, marketing, and support services can all be working together from different geographic locations.
A great rule of thumb for investors seeking to hire a virtual assistant is to hire out any activity that can be easily delegated and will cost less than the investor’s own calculated hourly rate. This helps busy investors best leverage their time, maintain order in their businesses, and ensure all tasks to keep the business going are completed on time.
Virtual assistants can be hired from all over the world. Websites such as Upwork, Fiverr or specialty staffing services can help real estate investors locate talent quickly and affordably.
Hiring a top-notch virtual assistant can be a game-changer for many virtual real estate investors. Below, we’ll review a few pros and cons of bringing on a virtual assistant.
Regardless of which virtual investing system, market, or software a real estate investor decides to use, it is critical that the investor takes time to understand and build out a solid strategy first. Having a solid training program for a virtual real estate investing system can be a shortcut to your success.
A reputable training program will have a number of elements including:
Your marketing should evolve and become more focused and value-driven over time. A quality training program understands this and teaches this! A reliable virtual investing system should be built on advice from real estate investors who have been in the trenches and have extensive experience.
The founders of Real Estate Skills have spent nearly a decade helping new and experienced investors create businesses that allow them to live life on their own terms.
If you want to get started and learn more about the virtual real estate investing system that has created millions of dollars in profit for members in our community, register for our free training on how to find and flip houses in 45 days or less!
DealMachine is a great virtual real estate investing app that is designed for high volume real estate investors looking for more off-market deals. Utilizing its proprietary “Driving for Dollars” function, investors can quickly distill market research by identifying key addresses, inputting the address into a search function, and managing a team of drivers to “drive for dollars” for them to pinpoint quality deals faster.
To learn more about how much more impactful the ROI can be on Driving for Dollars, watch this YouTube video by the CEO of DealMachine:
PropStream is another app for real estate investors to consider. Propstream provides a comprehensive platform for real estate investors to research target markets.
A few of PropStream’s solutions include nationwide market data comparison, property research, an instant rehab costs calculator, targeted direct marketing list creation, and instant home prices comparables. A customized solution can also be created for your specific virtual team’s needs.
RealeFlow is another comprehensive, full-cycle real estate investing software that is ideal for virtual investors. From finding the deal in a target market, through rehab estimates and repair, to closing the deal successfully, this solution can provide ease of use and simplicity to your virtual team.
If you are a busy real estate investor or are very interested in a new market outside of your geographical area, virtual real estate investing could be for you!
By ensuring you have solid systems in place, along with a professional service team, you can increase your productivity exponentially without experiencing burnout. A great win-win!
Are you a real estate business owner who has completed any virtual real estate investing business deals? Tell us about them in the comments below!
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