myEmpirePROYou are about to discover 5 reasons to avoid small town targeting and focus your resource and energy on virtual wholesale real estate.
Back in 2006, I discovered virtual wholesale through the school of hard knocks and you don’t have to go through the same pain I went through.
In fact, in my next video I share with you how I got kicked out of Plainfield New Jersey to decide that and how it helped me create $3 million.
I was forced to look at my data (a.k.a results) and pivot accordingly.
It wasn’t the easiest decision because everywhere I turned, the gurus were advising newbies to stay focused in your local town.
So here goes the 5 reasons to avoid small town wholesaling like a plague.
My name is OLA and I am the author of 2 books…
REAL ESTATE MONEY SECRETS and SMART REAL ESTATE WHOLESALING
…which you can download for free at www.SmartRealEstateWholesaling.com
I am also the creator of myEmpirePRO and the 11 days challenge quick start guide which you can find at:
Reason #5 – Demand = Opportunity
In this time and age, it’s more important than ever to balance demand and supply,
or should I say inventory and population wisely before spending a dime on a business venture.
When you target a small town, there will be, obvious, less demand because that usually also means a small population of people.
And in addition to that, the settlement is usually more dispersed in population density over a unit larger geographical area.
But here is the bottom line.
There is only so much opportunity that can and will be created from the demand of real estate out of a small town considering that you have the same opportunity to open up your horizons.
I know what you are thinking.
“Doesn’t a small town mean richer people?”
First all of, not always.
But even if that was the case, it would be much more stable individuals which means less inventory.
Reason #4 To Choose Virtual Over Small Town Wholesaling – Data vs Emotion Driven Decision Making
PREVIOUS POST: 📍 5 Tips For Wholesaling REO Properties
The business of wholesale real estate is not exactly the same as real estate investing in the sense that it is more so a marketing business.
You get paid for finding deals for real estate investors who want to fix, flip and/or rent out these properties.
So your performance is based on how effectively and efficiently you can manage marketing budget, time and resources.
Where and how you focus your resources will determine the limitations of your reach in your campaigns; it’s a balancing act.
In certain scenarios, you want to reach more people within a certain period of time while in others it’s about less people in that same period of time.
There are also other factors such as the demographic of the neighborhood you are targeting and the season of the year.
With virtual wholesaling to more cities around the United States, those extra factors such demographic and season become less important.
You will generate more data which means you will be equipped to make more data driven decisions; that’s what you want in this digital age.
The flip side of that is to get caught up in the emotions of your home small town when in fact, this is a real business that requires a real decision.
Reason #3 – More Spend Per Reach
As I said earlier, wholesale real estate is about marketing efficiently. The more people you reach, the better if everything else were equal.
But everything else is not equal so there is more to this. I get that.
In fact, one thing to consider is the fact that your outreach size is limited and that can probably camouflage as costing you less money in marketing.
That’s not the reality that will play out.
What will happen is that you will spend money on your campaign and results will not show up as fast as you are done.
Then you will end up spending more time and money in effort to invoke faster results only to realize that you’ve wasted time and money in this little area on the same small reach and market.
With virtual wholesale, you will have more options and more data to analyze before zoning in on where most of your results are coming from.
So this takes us back to reason #4 which is the opportunity to focus on virtual wholesaling because of data driven decision making.
Reason #2 – Hard to Comp & Analyze
TRENDING: [2021 Update] Virtual Wholesaling Out-of-Town Real Estate Deals
The first thing you should have learned in wholesale real estate is how to comp a property properly.
What does that mean?
Well… wholesaling is the art and science of finding deeply discounted properties right?
That’s one-fifth of it but let’s pause it right there to make this point.
If the first goal is to find discounted properties, then we need to know what the properties are worth in the first place.
Finding what a property is worth is done through a process commonly known as comp-ing the property in the industry.
We find the after repair value (ARV) of the subject property and we then use that number to calculate the maximum allowable offer (MAO).
In order to find the ARV, we need at least 3 comparable properties. That’s where the work “comp” comes from.
We prefer these comparable properties to be similar in style to the subject property, sold within the last 6-12 months and within 1 mile radius and proximity.
In a small town and rural areas, comps tend to be extremely hard to come by. Houses rarely sell when compared to urban areas because of the obvious reasons.
This will make your life and business harder than the endless opportunities that comes with virtual wholesale real estate.
Check out a free tool you can use to comp any property in the United States at: www.DealEstimator.com
Reason #1 To Choose Virtual Over Small Town Wholesaling – Same Effort More Options.
HAVE YOU SEEN THIS: More Video on our YouTube Channel
Small town wholesaling is sold to some folks usually on the basis that it’s their neighborhood and backyard that they already know.
That’s supposed to offer some type of advantage when they can drive around the corner and inspect the property.
Unless this is a house you are picking up for your father to fix and flip, you get no extra advantage to show up to inspect the property personally.
Whatever market you found this house in, the end-buyer will still want to inspect after you so it is basically a waste of your time and home owner’s time.
The game of wholesaling is a volume game and it’s about having all these options with the same or less effort from a laptop and an internet connection.
Swimming against that tide will only make you shoot your business on the leg before it starts walking; a small town is generally not worth your effort.
Conclusion & Main Lesson
If you are going to apply effort to wholesale real estate, you will get a bigger bang for your buck with virtual wholesaling.
With a small town, you will still require the same effort, energy and resources but you will collect less data.
Less data will translate to less opportunities to analyze, adjust and scale. I cover that in more details in this video on the screen.