Let’s just say you come across a great deal in Arizona, but you live in California. What do you do? Virtual deals is what you do. You complete deals from your computer without physically going to the home.
And we’re not just talking about doing wholesale deals virtually. We’re talking about all types of deals virtually. And that’s what you’re going to learn about in this blog post. You’ll be learning from case studies taken directly from our own personal experience.
This information is from one of the training sessions we conducted exclusively for our members on Facebook. We wanted to give you guys a sneak peek of the types of trainings we do for our community. There’s two parts to this and we’ve condensed it all into one post for your convenience.
- Why Virtual deals?
- What are the roles that are involved?
- Virtual Deals Case Study 1
- Virtual Deals Case Study 2
- Virtual Deals Case Study 3
- Things to keep in mind
Why virtual deals?
The main thing is that you want to protect your time.
You might be finding opportunities in other states and other locations, but it’s not time efficient to be driving over there, or trying to fly over there just to make the deal happen. So obviously you need to figure out a way to do these deals without having to use your own time to get there and physically be in that location.
It also allows you to get more deals done. There are more opportunities available nationwide. You want to be able to spread yourselves out by delegating and working with other people to get more deals done.
It also helps you to learn different markets. You might live in a rural area and want to tap into the market in your nearest city. Or you might want to access the opportunities in a different state. Virtual deal making will allow you to do that.
It’s going to help you scale your business. As you’re able to do more and more of these deals virtually you’re able to scale and do more deals per month or do more deals per location. You’ll get a lot more done because you’re not the bottleneck. You’re not the one running out to every inspection, trying to talk to all the sellers and product managers. You’re leveraging other people’s time.
And you’re also going to be able to work with friends, family members, and investors that want to make money in this niche. You can partner with friends or family members in different states. You can work with people that are interested in this and you guys can bring value to each other and make money together.
So this is about bringing partnerships and alliances with you in different areas around the country. You want to have boots on the ground in all your preferred markets.
What are the roles involved?
Investor / Boots on the ground / Funding partner
It’s really important for you guys that are partnering up to really get a sense of each and every role entailed, and what you actually need to do, what you’re actually responsible for.
As the investor, we have found the opportunity. So, it is our responsibility to have the knowledge and the strategy. We are the one that’s going to coordinate the deal.
From our experience, it works really well when we’re able to come and bring a specific opportunity and say ‘This is what we want to do with it. All you need to do is step one, step two, step three.’ That makes it so much easier.
The boots on the ground can get straight to work instead of having to find the opportunity, negotiate the deal, or figure out what strategy or process we’re going to use. It works better when they already have clear instructions on exactly what they need to do.
You guys can use any of the five strategies we teach in our course right now. It all depends on what the seller really needs. You still have to meet the seller regardless of if it’s in person on virtually.
So that also means we’re going to be in charge of communicating with the seller. In these deals we, the investors, need to figure out their motivation, why they need to sell, how much they need to sell it for etc. We’re the one that has that negotiation hat on. We’re in control of the deal, because we have the connection to the seller.
We’re making sure we’re not just throwing any type of lead to the boots on the ground or any type of situation. We want to make sure that before we send the boots on the ground out there that there’s a motivation. That this is a real deal with real motivation from the seller.
Our boots on the ground is going to be somebody that must be reliable, must be trustworthy and must understand our process. Guys, we’re not trying to hire random friends or people that we don’t know to do the job. It’s really important to hire a person who’s responsible and understands the process.
We recommend going through the process with the boots on the ground in person first, at least one time. Otherwise, it can get very challenging to coordinate them through the process later on. Especially when we’re relying on them to send pictures of the home.
If they haven’t really been through mobile homes, looked at and inspected them before they may just not know what to look for. So, they need to know what type of pictures to take to help you visualize what it’s like to be inside that home.
The boots on the ground are also going to be responsible for all of the face-to-face actions. All the face-to-face with the clients, like doing the inspection on the home, doing the paper work signing, showing the home, and closing the deal.
There’s been instances where we had to utilize our boots on the ground to talk with the park manager or even the park owner.
You’re like a coach on the sidelines. You’re watching and you’re telling them exactly what they need to do to make this process work.
And then the third party is possibly a funding partner. This is all optional, depending on if you’re going to wholesale the deal, if you’re going to do more of a fix and flip, or a quick cash deal.
Depending on what the strategy is you may need some funding in place. And you, of course, could be the funder. The boots on the ground could be the funder. It really just depends on how you want to put the deal together.
Virtual Deals Case Study 1
With this particular deal it was at 1990 home, 3 bedroom and 2 bathrooms.
The daughter actually called us. The mother had passed away. It was in a 55 plus community. They had no interest in keeping the home. They actually couldn’t afford to keep the Lot Rent payments up. This property was also located in Mesa, Arizona, but we had already left Arizona to move to Southern California at the time.
So in order to help this seller out we needed some boots on the ground and we were able to find another investor to help us out.
What we ended up doing with this deal was we actually purchased the home for $7000. Then we actually split that between us and the boots on the ground 50/50. So they put in $3,500 and we put in $3,500 to secure the deal.
1 month of Lot Rent, $500, was paid by our boots on the ground. They figured to take that cost since we brought the opportunity to them.
We eventually sold the home for $20,000 in 3 weeks. That park was a really nice park with a really nice community and the home was decent too. It was valued at $33,000. The profit from that deal was split 60/40 so we made $12,500 on it.
That split was reasonable because it was pretty much a slam dunk once we handed it off to them. We told them exactly what to do. It was very easy to make the deal happen and everybody was happy. Everybody walked away in 3 weeks making thousands of dollars.
Virtual Deals Case Study 2
This was a 1996, 2 bedroom and 2 bathroom home.
The seller of the home had already bought a new home. This home was actually located in North Phoenix. This was in a really good park with a 5-star community. The home was in great shape and needed nothing.
We purchased this one for $12,000 and a 50/50 split with boots on the ground. So we each put $6000 for this. The boots on the ground paid the 1 month of Lot Rent at $750.
We ended up selling the home for $22,500 in 2 weeks, while the home was valued at $27,000. So the great thing was the boots actually had a pretty good buyer’s list. He was able to help us find that buyer really quickly. We had the buyer in minutes, so it was like a no-brainer for everyone involved.
The profit on this deal was $9,750 with a 50/50 split. Guys, you and your boots on the ground can determine what the splits are. So don’t necessarily mirror our numbers. You’ve got to meet the boots on the ground where they are. You guys have got to establish some form of trust and reliability.
The other thing is this was an experienced investor. So it was just like, ‘Hey, we got this opportunity. We’re bringing it to the table.’ We didn’t have to train him much to do it anything. He already knew how to do it. It was just a matter of marrying the two and splitting the deal. That was a great deal. We were really excited.
Virtual Deals Case Study 3
This deal is something we’re actually working on now, it’s located in Taylor, Arizona. Trailer Cash Academy member Mark is helping us out there with closing this deal.
This is actually a wholesale deal that we’re doing. Instead of actually buying this home we got this one under contract for $1775. And Mark went out there and inspected the property. He’s been going back and forth to get this deal done with them.
And he just walked in a buyer today who was willing to pay $8500 cash. This whole project from the time we got it under contract has taken no more than 3 weeks. We still have to do the whole closing process, so it might take another few days to get that done.
On this home we’re looking at a profit of $6725 with a 50/50 split.
Things to keep in mind
You must trust your partners, guys, because you’re involving your time, you’re involving your money and you’re involving live open titles a lot of the time.
Whoever’s in on this deal, you have to have trust them. We’ve seen people getting taken advantage of, someone runs off and steals the deal from them type of thing.
In some states you don’t need a notary to open the title. All it needs is a signature on the bill of sale. So, if you don’t trust the right person, you’re spending all this time, you’re losing out on money, you’re losing your deal and you’re making yourself and your business look bad.
You have to have the knowledge. The blind cannot be leading the blind out here. If you found this deal, then that person with knowledge needs to be you. You have the blueprint.
You have to be articulating yourself in a way that shows that you’re educated, you know what you’re talking about, and that you can coordinate the play.
Utilize this TCA community, that’s what it’s for. We want you guys to network together; we want you guys to partner together on deals. And here’s the great thing: all the people in this community have access to the blueprint.
So they’re working on the same process. It’s just about building that trust, networking with them, and making sure they have the capacity to actually get the job done.
Profit splits have to be fair and communicated early on. Don’t talk about splits when you’re three quarters of the way through the deal. Get everything articulated very early.
As soon as we make contact with our boots on the ground, they’ve been told everything about the actual deal, including the profits, what we expect to make, and who’s going to be funding the deal early on.
Obviously, splits can change over time, especially as you build trust and rapport with those boots on the ground. It can change depending on the funding, it can change depending on who’s doing what. We like to break it up into 4 different buckets – FIND IT, FUND IT, BOOTS and BUYER.
So that’s whoever FINDS the deal, whoever FUNDS the deal, BOOTs on the ground, and whoever finds the BUYER. Those are usually our 4 buckets and we break up the profits by giving 25% a piece.
This is just our rule of thumb. There’s other investors out there that are actively doing virtual mobile home deals using a whole different process. This just makes it really simple and easy for us.
But it depends on your agreement with them. If you find the deal and they do all the rest of the 3, you could still do a 50/50 split. It’s just all dependent on the situation. You might even work together on the funding and split that 25% down the middle.
Get partnership terms in writing. This is very important. We use something called a JV agreement that’s available in the program.
It’s good to have those terms in writing. You’re listing out who’s paying for what, how much the profits splits going to be, what the process is going to be like etc.
We don’t do handshake deals. We don’t do verbal agreements. We get everything written in stone. Everybody has a copy. With DocuSign it’s so easy to get a digital signature. It’s very easy. What’s hard is when you’ve gone halfway through the deal, nothing is in writing and you don’t know what’s what.
If you found the lead, know that leads are the power. When we got into this whole real estate investing niche one of our early mentors, Elijah Ruben, he told us once ‘You’re Papi when you have the leads.’
When you have the leads you call the shots, basically. And in our experience we found that to be so true.
When you come to the table with those opportunities, don’t underestimate how valuable that is because they can say no to the opportunity, but you can always go find somebody else to get it done.
Good boots on the ground aren’t easily replaceable, because of the trust and rapport you build with them. But boots on the ground are a little easier to find and train. They’re easier to find than the actual source of the lead, which is what you have.
Keep this in mind as well. When you are finding these deals and you are coordinating and doing this virtually, you have to be a good leader. You have to be able to coordinate these deals and you have to have solid communication.
It all starts from within. If you guys don’t have any solid communication, no coordination within your household, inside of your own job and things that you’re doing outside of mobile home investing, it’s going to show up in your mobile home investing business.
You don’t want to just leave people out there hanging. As the investor, as the person that’s bringing this opportunity, you take accountability for that.
The easiest way to take care of this is identify what you want to accomplish from this deal or project. Then you want to always assign a Key 4. The Key 4 are your main 4 items that need to get done in order to get the deal closed. Talk about that with your boots on the ground, list it out as action items and then it’s just about getting it done.
And finally guys, if you’re going to do virtual deals we recommend to pick 2 or maximum 3 states to start off with. Just start somewhere that you feel like you have some good boots on the ground, some good people, you see a lot of opportunities there and then go from there.
Because the regulations are different in every state, price points, market changes etc. You just want to start off with a handful. Get your systems and processes and people in play first. You’ve got to always ask yourself, ‘Who do I have in this seat?’ It’s all about the who’s, not necessarily the how’s. Who are you working with?
Two to three states and max. If you’re doing more than that, it can get sloppy and kind of complicated.
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