The Titanium Vault hosted by RJ Bates III

What I Learned From My First Wholesale Deal

• RJ Bates III • Episode 496

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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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Speaker 1:

let's talk about our first ever wholesale deal.

Speaker 1:

Now this is fresh off of us spending 65 000 on my mom's american express so we could learn how to wholesale real estate off of the MLS. These are scary times. Cassie and I had been an entrepreneur for about four years. We were running our remodeling general contracting business. It was somewhat successful I mean, it was paying the bills but we weren't satisfied. We weren't really fulfilled in what we were doing, but we weren't satisfied. We weren't really fulfilled in what we were doing and we always knew that we wanted to do something in real estate investing. Now, that being said, we had no idea what wholesaling really was, outside of the fact that several of our investor clients that had hired us to do the rehab, the actual work on the property, had explained to us that, hey, we got this property from a wholesaler. So we were familiar with the names of New Western Acquisitions, net Worth Realty, the big box wholesalers, but we didn't really know how they were getting the deals, how they were comping and underwriting those deals, especially how they were finding the end buyers, the actual investors. So when we spent the money, the $65,000 to learn how to wholesale, they explained to us that it's as simple as going on to Realtorcom, redfin, zillow and searching the MLS and finding properties that are listed that have key trigger words like rehab, investor, special selling, as is fixer-upper, things like that. So my personality is as soon as I have an idea of the direction that I need to head, I start taking immediate action. That's what I did in August of 2014.

Speaker 1:

Now I'm going to share my screen here real quick. This is our first ever wholesale transaction 2300 Sunset Lane in Arlington, texas. Now, this picture was taken in December of 2023, but, to be honest with you, the property really didn't look much different when we wholesaled this back in 2014. From the outside, it pretty much looked just like this. Now I'm showing you this Google Street View to show you this fence right here, that gate. That gate ends up being a huge part of the story. Now I'm going to show you the Zillow listing right here.

Speaker 1:

August 8th 2014,. 2300 Sunset Lane was listed for sale for $96,000. Now, the reason why this is this gate that I'm showing you is because, when we saw this, the reason why I offered on this property, is because it was pretty much fully gutted on the inside. It needed everything. It was one of those sold, as is investor special type properties. All right, and what I was told was to reach out to an investor friendly realtor in your area. Now this deal. I reached out to a gentleman by the name of Brian St Clair and I did several deals with Brian and he was a great guy, super helpful at the beginning. So what we did was we reached out to Brian and we said, hey, brian, we're going to go find these deals off the MLS and we want you to put in the offers for us. Now, I'll never forget when I was learning this and I was sitting inside the hotel and listening to the coaches explain to us how to do this One of my biggest questions was how do I actually place an offer?

Speaker 1:

See, I never purchased a house before, so I had no clue how to actually make an offer on a property. We went through how to comp it, how to underwrite it, how to use our calculators, a property. We went through how to comp it, how to underwrite it, how to use our calculators, all these different things, and I remember raising my hand and saying what do you mean by place to offer? I was thinking there must've been some sort of portal or something like that. And then finally it became apparent All you have to do is just reach out to Brian and say hey, brian, I want to place an offer on this property. So we did. I reached out to Brian and I said I want to offer $90,000 on this property at 2300 Sunset Lane in Arlington, texas. I did the free proof of funds from besttransactionalfundingcom the fake proof of funds essentially. I will say as much as I don't recommend you using those. They are valid proof of funds, they have been investigated and it does keep track of who actually downloads those PDFs, requests those PDFs and for how much. So that proof of funds was actually legitimate, even though I've never actually gotten a loan from Best Transactional Funding so early on, I just did what the teacher stopped me to do Download this proof of funds for $90,000, submit an offer through Brian St Clair, the local realtor, who's impressive or friendly and, sure enough, 2300 Sunset Lane offer is accepted.

Speaker 1:

So here in the state of Texas we have to pay for our inspection periods. It's called an option period For that. It costs us $100 for a seven-day option period. So we had essentially a seven-day inspection period to dispose the deal to find our end buyer. We also had to put down $1,000 earnest money deposit. This is very common because we were doing deals off the MLS. So you're essentially having to do business the way that the realtors are used to doing business Retail transactions very different than how we normally do it nowadays as wholesalers. So, option period earnest money property is now under contract.

Speaker 1:

I took the pictures directly off the MLS. I didn't go to the property. I never went to the property, so the first ever deal we did was completely virtual, even though it was in our backyard, being in Arlington, texas, about a 20-minute drive from us. Now, simultaneous to us getting this property under contract, we were also going to Las Vegas for our boots on the ground. One of the main things that we paid $65,000 for this was going to be the buyer summit. We'd go to this big seminar at the Luxor Casino and they were going to teach us all the nitty gritty details to wholesaling. I'll be honest with you it did a great job of getting me super motivated and pumped up Education-wise. I was still left with a bunch of questions, but we got this property under contract.

Speaker 1:

The proof of concept was already starting to become apparent. So, when it comes to dispositions, what are we supposed to do. Well, back then we didn't have things like investor lift, investor based deal speed. Quite frankly, we didn't even have the prop streams and the privies right. So we were taught to dispo deals off of Craigslist the old school way of doing things. Now I did make a PDF of this, inserting the pictures and making it look pretty as best as I possibly could. My graphic design skills weren't that great back in 2014. But we put it on Craigslist and I'll never forget.

Speaker 1:

I'm inside the buyer summit there at the Luxor Casino and I get a call. I answer it, I walk out into the hallway and it's the buyer, the actual end buyer, and he calls me. He says hey, mr Bates, I'm here at 2300 Sunset Lane, I want to take a look at the property. And I said, okay, I think I need to call my agent and schedule a showing. I knew that that's what I needed to do. We need permission to be able to view this property because it's listed on MLS, there's realtors involved, there's access criteria that we have to go through here to get our this end buyer in the property. And he says, no, it's okay.

Speaker 1:

I went right through that gate and there was a window unlocked in the backyard. I'm in the house right now. I'll take it. Oh man, I peed my pants. I mean I was freaking out and for those of you that are either newer, I mean imagine this this is your first ever prop, the first ever property I've ever had on contract, like ever. So I'm like did, did we just break the wall? Did, did I just put this on Craigslist and my end buyer just break into the house? I mean, essentially he did.

Speaker 1:

Now this end buyer, he was old school and he was a straight shooter and he's like hey, I'll take it. I'll take it at your asking price $97,500, which was $1,500 above that molest asking price. He said I'll take it. Here's the deal, though you got to use my title company. Okay, sounds good. So I didn't know how to fix that because we had already opened up title at the seller's requested title company. Now Brian did all the paperwork, got it fixed up, and the reason why this is important in the story is because this first ever transaction that I did the end buyer wanted me to use Dana Draper and at the time she was at lawyer's title in Plano. Was that lawyer's title in Plano? Now I have used Dana on my Texas transactions ever since August of 2014. And the reason why is because she was so amazing to work with on this transaction.

Speaker 1:

I mean, I tell you, what I got taught that we had to do on this transaction is nothing that we had to do. See, we were told that we needed to double close any deal, any wholesale deal, where the wholesale fee exceeded $5,000. And the reason why is because you don't want your end buyer to know you're making more than $5,000, because they can give you pushback. They could complain about how much money you're making. So you want to cover that up. Well, in reality, what they were really trying to tell us was is it has nothing to do with how much money you're making, but we want you to use our transactional funding company and we'll only charge you 1.5% of the purchase price. So do a double close, use our transactional funding company.

Speaker 1:

So I remember I started the process of getting transactional funding on this deal and reaching out to Dana and saying hey, dana, I'm RJ, I don't know what I'm doing. This is my first time with you, fully transparent. I'm going to be using transactional funding. She says why would you use transactional funding? We'll just do what's called a pass-through double close. What's that? She explained it to me the funds that your end buyer is going to bring to purchase the property from you on the second contract. We'll use those funds to fund your A to B contract and then I'll just cut you a check for the difference. Your assignment fee Okay, not necessarily assignment fee, I guess that's poor choice of language there. Your wholesale fee, because it was a double close, not an assignment. Okay. Now, she did explain that there would be some additional fees associated with this because we were doing a double close, but it would save me the one and a half percent that I was told I needed for transactional funding. Okay, sounds good. So, from there on, for the next two weeks, and as you can see here on Zillow, this was listed on August 8th 2014, and then it was closed August 28th 2014. So we got this deal done very quickly, because I don't think we placed the offer on the first day it was listed. So we probably got this deal done in two to three weeks.

Speaker 1:

I remember every single day calling Dana Draper and asking Dana, I don't have $90,000 cash, I'm not coming in with a check. I don't have $90,000 cash, I'm not coming in with a check. I don't want to be embarrassed when I show up and not have money. I don't want this deal to fall apart. So you're telling me I can just show up with no money and I'm going to walk out of there with a check. She's like well, you're not necessarily going to walk out with a check, we have to make sure the funds everybody signs and then I can write you a check or I could just wire you the money. Now I wanted that check. I told her I need to see the check, I wanted to deposit that check. So, sure enough, a couple weeks later I drove all the way to Plano and I'll never forget.

Speaker 1:

It was the exact same time we were still running our contracting business. We were doing a roof in Denton, texas, which is about a 30, 40 minute drive. Now I thought I was doing a real estate transaction, so I had to get dressed up. So I put on nice dress, pants, a dress shirt, got all dressed up, drove to her office. I was super nervous. Cassie was actually out of town. So I went all by myself, went in, sat down, went into the little conference room. They brought me the documents. I signed all the closing documents for the A to B transaction. I signed all the documents for the B to C transaction. She handed me copies, shook my hand and said I'll let you know when I have the funds. I'll let you know when your check's ready. So I left the office a little bit nervous still.

Speaker 1:

But I remember driving to the roof job that we were doing in Denton and the crew called and said hey, we're a few bundles of shingles short. There was a little shed or something in the back that we need shingles for. Can you swing by the supply house and get those for us? Now, funny enough, we made $7,500 on that wholesale fee on this first ever deal. But this roof the price was very similar in price. It was like $7,000 for the entire contract of the job. Now that included the cost of materials and labor as well as our profit. And I remember driving all the way to the supply house, waiting in line, getting the shingles dumped in the truck, driving them there, slinging the shingles over my shoulder with my dress shirt, dropping them off, standing out the hot sun, looking and going. Is this what I want to do with the rest of my life? I'm sitting over here. What we've maybe made? Two thousand000 profit on that roof job.

Speaker 1:

But over here I went and found this property under contract, did no work, didn't really even have to drive anywhere. I made the decision to drive all the way to the title company. We made $7,500 profit. I don't have any labor, I don't have to pay any commissions, there's no materials. And it was about that time that I'm thinking this. When Dana lets me know your check's ready to be picked up, let me know if you want me to mail it to you, if you want to come back by. Oh, I went back. I drove back over there, I picked that check up and I remember just holding it in my hands and being like this is the proof of concept that I needed right here. This is what I knew I wanted to do this. But now I knew this is what I was going to do.

Speaker 1:

From there on I never really looked back. I kind of left Cassie to run the contracting company and I solely focused on getting better at wholesaling, and that's where my focus has been for the past decade. Now, if you're in a position where you're trying to figure out that proof of concept, I can tell you the videos that I've shared on this channel on how to get leads, how to talk to sellers, how to dispo deals, how to comp and underwrite far exceeds what I was taught for $65,000. And the reason why I continue to bring you guys videos day in and day out is because I know the impact that that first deal had on my life, that proof of concept making me decide this is what I want to do. Moving forward, I want you guys to experience the same thing, which is why we consistently bring you the value and show you the education for free.

Speaker 1:

Now, sure, we monetize the channel. There are little ads pop up every now and then. Hell, one might have just popped up and you had to skip it after five seconds. Yeah, we monetize through affiliate. We have titanium university lower ticket items. Of course we want to make money, but ultimately you don't have to pay any money to us to be educated by us. And we do that because of the passion that we have to show how wholesaling can change your life, like it has ours for the past decade.

Speaker 1:

2300 Sunset Lane, arlington, texas. I'll never forget that address because that deal, that proof of concept, working with Ryan St Clair, working with that end buyer, finding out about Dana Draper, having her help us through so many transactions not only this first one, but many over the past decade to make sure they make it to the closing table. These things have allowed us to create our own reality and live the life that we want to. It's not about doing deals. Doing deals is what we do as a company, but the result of that is what I want you guys to achieve. So I hope you take some inspiration from 2300 Sunset Lane. I hope you have your own 2300 Sunset Lane.

Speaker 1:

If you do drop a story in the comments, let me know about that first ever deal that you've done. If you haven't done your first ever deal, talk to me about the importance of what that will mean when you actually get it done. And if you need help on figuring out how to get your first ever deal, I have a playlist on my channel. It's called the Foundations for Virtual Wholesaling. I believe if you were to go watch each and every one of those videos from start to finish, you will receive more value in those videos than you can from 98% of the paid mentorships out there. I appreciate you guys. I hope you have a story that you can share with me very soon about getting your first deal done. We'll see you guys tomorrow.