Newest Real Estate Investment Trend - Virtual Wholesaling
One of the hottest trends in real estate investing today is virtual wholesaling. Not long ago, financing and closing a real estate transaction used to take several months. Back then, paperwork had to be signed in person, and a buyer usually wanted to see a property firsthand. Listings were handled by local real estate agents.
But now that the Internet has connected the world, including world financial markets and real estate markets, real estate closings can happen in one day. Digital signatures are commonly used in financial transactions. And properties that are listed for sale on the Internet are available for anybody in the world to buy.
Day trading has become a common occurrence in the financial markets during the 21st century. So it was only a matter of time for virtual wholesaling to enter the real estate markets. But virtual wholesaling in real estate is not exactly the same as day trading in the stock market.
True, the Internet has made it easier and faster for buyers and sellers to find each other. And using the Internet, it is now possible to close on a property then sell it within an hour. In that respect, virtual wholesaling in real estate is almost as fast as day trading in stocks.
But stock sales and transfers don't usually require contract negotiations and appraisals. Those elements of the traditional real estate transaction still exist. And they still take more than an hour complete.
And it still takes some time to set up financing, even though most virtual wholesalers use "creative" financing. It may not be done through a typical mortgage broker, but it still takes time to put the financing in place. Even a cash buyer still wants to take the time to perform due diligence by doing some kind of appraisal and inspection of the prospective property.
But the Internet has greatly increased the speed of the negotiating and marketing processes. Contract negotiations can occur at the speed of instant messaging. And marketing can be done on social networking channels.
For example, a property could be offered for sale on Twitter, a buyer could make an offer, and the seller could accept within minutes. Now imagine this process being repeated several times a day. This is the basic process for real estate virtual wholesaling.
Real estate investors network with each other, and with buyers and sellers using the Internet. Negotiations take place using the Internet. Closings can also be completed using online resources, since digital signatures are widely accepted.
Author and entrepreneur Bernz Jayma P. is the owner of a financial blog dedicated to helping people expand their knowledge on personal finance. You may visit his blog at www.Invesmint.com.
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