Virtual Wholesaling Math Made EASY For Beginners!

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If you’re new to my channel my name is RJ Bates III. Myself and my partner Cassi DeHaas are the founders of Titanium Investments.

We are nationwide virtual wholesalers and on this channel we share EVERYTHING that we do inside our business. So if you’re looking to close more deals - at higher assignments - anywhere in the country… You’re in the right place.

Who is Titanium Investments and What Have We Accomplished?

Over 10 years in the real estate investing business
Closed deals in all 50 states
​Owned rentals in 12 states
​Flipped houses in 11 states
​Closed on over 2,000 properties
​125 contracts in 50 days (all live on YouTube)
​Back to back Closers Olympics Champion
Trained thousands of wholesalers to close more deals

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With over 2,000 Videos, this is the #1 channel on YouTube for all things Virtual Wholesaling. SUBSCRIBE NOW!    https://www.youtube.com/@RJBatesIII

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RESOURCES FOR YOU:

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Chapters

• 0:07 Virtual Wholesaling Fears
• 0:50 Profit Calculator Introduction
• 1:27 Conservative ARV Approach
• 3:38 Aggressive Rehab Numbers
• 5:44 Proper Assignment Fee Strategy
• 8:26 Negotiating With Sellers
• 10:17 Key Takeaways and Closing

Transcript

Speaker 1: 0:07

Okay, so you're brand new to virtual wholesaling and you are scared to death. How do you run your numbers, rj? I've watched all these videos, but when I get in there, it's so hard to determine what the after repair value is and the rehab, and I'm afraid that my deal is not going to make it to the closing table. Welcome to wholesaling. This is what you chose to do, so in today's video, I'm going to try to give you a simple formula, utilizing our profit calculator, on how you can ensure that your deal will make it to the closing table. Now you need to be using our profit calculator, so if you have not picked that up yet, go to kingclosersformulacom. Slash titanium profits. It's in the description of this video. Go, click on that. It's $99. Invest in yourself. You're going to get our comping and underwriting training as well as our profit calculator. Then you're going to start talking to sellers and you're going to get over your fear of running numbers incorrectly.

Speaker 1: 1:25

Now here's the facts. You're still going to suck at running numbers. That's a fact. Okay, you're brand new at this. You're not going to be good right out of the gates. It's going to take time. And even when you are great at this, like I am.

Speaker 1: 1:40

I still screw up all the time. But here's how I overcome that. I still screw up all the time, but here's how I overcome that by being conservative on my after repair value, being aggressive on the rehab and also putting in a nice little assignment fee for myself. So when I do make a mistake I still get paid. The end buyer still gets a good deal because it still fits inside of the web. Yes, the web was a clever acronym for where end buyers buy, but it also fits in the fact that you just need to land somewhere near where end buyers buy. You don't have to have the specific numbers exactly right. That's what we're going to talk about today.

Speaker 1: 2:24

So the first thing that you need to figure out when you're running numbers is the after repair value. Now, what I see all the time is new wholesalers want to squeeze every little penny into that after repair value. They'll look at comps and they'll see there's a $200,000 comp, there's a $190,000 comp and there's a $210,000 comp and they'll say the after repair value, of course, is $210,000. Incorrect. Here's what you're going to do, moving forward, if you think it's $210,000, just make it $200,000. Conservatively bumping down $10,000. This gives you a little buffer for error. Maybe your end buyer is going to be conservative the majority of them are so go ahead and write down the conservative number. Hell, if you want to make even more of a conservative effort, write down 190. It'll only work out better for you in the end Then when you get to the rehab number.

Speaker 1: 3:36

Now we have inside of the Titanium Profits course training on how to come up with the rehab number and it's based off the square footage and what the seller tells us and some assumptions that we make. At the end of the day, we don't know the facts. So I want you to be aggressive with this number. What do I mean by that? Say, you plug it into the calculator and it says that the amount of rehab needed on this property is $40,000. Make,000. Again, the worst thing that happens here is that you give your end buyer a better deal. Or once you get recon done and you get pictures back of the property, you have more room for you to make a larger assignment fee.

Speaker 1: 4:30

Now you might be thinking to yourself but RJ, if I'm super conservative on my after repair value and aggressive on my rehab, I'm going to need to purchase the property so low that there's a chance I might not get the property under contract because the seller's asking price is too high. That's right. You're going to have to get better at closing these types of leads, the ones where the sellers want more than what you can offer. This is what we do, guys. You have to get good at this. If you want the dopamine hit of just getting a property under contract and not getting paid, then sure, run it at whatever numbers you want and feel good about yourself. Hell, go into the Facebook groups and brag about it. You've got to sign a contract that day. But really, what's going to make you feel better about yourself is getting paid. That's what you do this for. So conservative on the after repair value, aggressive on the rehab Now let's talk about our assignment fee.

Speaker 1: 5:38

Now, what I see a lot of times with newer wholesalers is they just want a deal to cross the finish line. So they'll see those three comps remember 190, 200, 210. They'll call the after repair value $210. They'll plug into the rehab calculator and it'll say $40,000. Then they'll ask some more questions Well, what about the roof? Have you remodeled anything? The seller will say something like well, I did put new floors in and paint a couple years ago and they'll put in the rehab of $35,000.

Speaker 1: 6:14

So, aggressive on the after repair value, conservative on the rehab, and then plug in a $5,000 assignment fee. You have no margin for error. Now this is what leads to terminations. This is what leads to a really difficult conversation with the seller if you try to renegotiate that price. Here's what I want you to do. The nationwide average assignment fee is roughly around $15,000. So, that being said, on almost all of your calculations you should be plugging in $15,000.

Speaker 1: 6:59

Now, if we're talking about a $5,000 shitbox in Dayton Ohio, you're not going to make $15,000. If we're talking about a $5,000 shitbox in Dayton Ohio, you're not going to make $15,000. If we're talking about a million-dollar mansion in Hollywood, you should make more than $15,000. So use some common sense when calculating this. This is just an average price property in an average market. Plug in $15,000 and add $5,000 on top. Let's make it $20,000. So what did we do here? We moved the needle conservatively for ourselves by $25,000. We made the after repair value $10,000 conservative. We made the rehab $10,000 aggressive and we buffered in an additional $5,000 for the assignment fee.

Speaker 1: 7:51

Now, when you're negotiating this with the seller and the price is incorrect. You do this through education. You talk about the after repair value and it's completely okay to talk about the fact that, yes, there is a comp that sold for $210,000, but I can't assume that this property, after we repair it, is going to sell for the maximum amount in the area. We need to take the median value, solid advice, solid education and point of conversation with the seller. Then, when you get to the amount of rehab if you have ever flipped a house or rehabbed a property before, almost every single deal goes over budget one way or another there's going to be things that we just don't foresee that come up when we are rehabbing the property. So yes, mr and Mrs Seller, based off the condition that you're telling me and the square footage of the property, we might be able to get this done for $40,000, but I want to buffer in for that unknown. I have to protect my investment, so I'm going to say $50,000. Protect my investment, so I'm going to save $50,000.

Speaker 1: 9:08

And then, when it comes to the profit side, talk about the holding costs, talk about the closing costs and, yes, we want to make profit. You don't have to give the specific numbers of that. It's more of an assumption as to where that money is being spent. So at the end of the day, that $5,000 buffet that you're giving yourself on the assignment just kind of gets consumed inside of those line items. Now this is a way for newer wholesalers, when they're underwriting deals, to ensure that the deal makes it to the closing table and you can get paid.

Speaker 1: 9:42

So if your end buyer comes back and says I don't agree with their after repair value or I don't agree with the amount of rehab, you have that $20,000 buffer plus for your assignment fee, plus the additional $20,000 buffer that you gave on the ARV and the rehab. So this is how, every now and then, you might end up only walking away with a $5,000 or $10,000 assignment fee, but it's because you were conservative on the ARV, aggressive on the rehab, and you gave yourself enough margin for error inside of your assignment fee. I suggest every new wholesaler does this to eliminate as many terminations as possible. Now let's go close some deals. Leave me a comment. Let me know if this is something you've utilized inside of your wholesale business. Have you liked what I said today? Click that little thumb down there and give me a like. See you guys tomorrow.