Xavier Karras, 22, of Seaholme, south-west of Melbourne, pleaded guilty in Warrnambool Magistrates' Court to possessing proceeds of crime and trafficking and possessing cocaine, ketamine, MDMA and cannabis.

Karras was arrested in July after a random vehicle intercept led to a police raid which located more than $25,000 in cash and a smorgasbord of drugs at an east Warrnambool home.

The court heard he was intercepted driving a Mercedes sedan on Warrnambool's Mahoneys Road on July 3 about 9.30pm.

Karras, a learner driver, was behind the wheel and being supervised by co-accused Alistar Bourke, 23, of Warrnambool, who allegedly tested positive for an illicit substance in a preliminary oral fluid test.

A search revealed Karras was carrying $2165 in cash and Mr Bourke $1600.

Police then executed a drugs search warrant at Mr Bourke's address.

The court heard the raid uncovered 46 grams of cocaine, 36 grams of ketamine, 33 grams of MDMA and 10 grams of cannabis.

Some of the drugs were packaged and ready for sale, including 16 small bags of cocaine that were separated into one-gram portions.

Some of the cannabis was located in scent-free deal bags.

Police believe the two men still owe over $30,000 for the drugs seized during the raid.

The court heard another $2000 was found in Karras' bedroom and in Mr Bourke's bedroom another $20,100 in cash.

Investigators believe the pair regularly travelled to Melbourne and Ballarat to pick up the drugs before selling them in Warrnambool through SnapChat.

Karras told police he had been trafficking drugs for a while, that he was surprised police hadn't found him sooner and any money he made from selling drugs went "back into (his) body".

Lawyer John Irwin said Karras had no criminal history and spiralled into heavy drug use after "a completely tragic event when his brother was killed".

He said Karras was 12 when his 15-year-old brother was hit and killed by a train in Ballarat.

"Karras was addicted to drugs because of the overall and compounding sadness in his life," Mr Irwin said, adding that his client was also grieving the loss of two close friends earlier this year.

Magistrate John Lesser ordered Karras be assessed for a community corrections order, which he said would likely include unpaid community work, supervision, and treatment for drug addiction and mental health issues.

He said Karras would likely receive a combination sentence of both jail time and the corrections order.

Karras will be sentenced on October 5.

He remains in custody on remand and had served 70 days as of Thursday.

Co-accused Mr Bourke is on bail.

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