Can You Spot the Red Flags Before Closing?

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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.

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Over 10 years in the real estate investing business
Closed deals in all 50 states
​Owned rentals in 12 states
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​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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Chapters

• 0:06 Welcome and Introduction
• 0:26 Acquisition Side Timeline Red Flags
• 4:02 Disposition Side Timeline Issues
• 6:08 Title Company Timeline Challenges
• 9:19 Final Thoughts and Conclusion

Transcript

Speaker 1: 0:06

Welcome back to Wholesale and Red Flags the series where I talk about alarming issues that come up in wholesaling transactions, to make you aware so your deals can still make it to the closing table. Today we're going to be talking about unknown timelines, both on the acquisitions and the disposition side. Now, on the acquisition side, when I talk about unknown timelines, this is when you talk to the sellers and they say, well, I do want to sell my house, but I don't know how long I need to get prepared to sell. Right, this happens a lot with elderly sellers, where maybe they have their whole lives to pack up and get ready to move, or they don't know where they're going to move to. And the reason why this is a red flag is because, in these scenarios, what we have seen over the past decade is that there's always the opportunity for the seller to say I do want to sell my house. There's always the opportunity for the seller to say I do want to sell my house, I don't know when I would be ready to move out, or I don't know when I'd be able to find another property. And we say, well, listen, one of the things that we offer you is convenience. We can close on your timeline, which is absolutely true.

Speaker 1: 1:19

However, time kills all deals, and so what we've seen is that we offer this convenience and then this elderly seller will then come back to us after 60 or even 90 days, sometimes even longer, and then say you know what? I haven't been able to find a place, or this packing up has become overwhelming, and I just I don't want to move forward with the transaction, I'm going to stay here, this is where my whole life has been and I don't want to do this deal anymore. Now, listen, our job is to solve sellers' problems, so not every red flag is necessarily a deal killer. Every red flag is necessarily a deal killer In this scenario, if that does happen to you, understand where the seller is coming from, understand their point of view and just be a solution for them. Say all right, mr and Mrs Seller, I completely understand where you're coming from. I'm going to terminate the contract, but we're here for you whenever you do decide to sell your house, when you are acquiring the property, offer them the convenience of closing on their timeline.

Speaker 1: 2:31

But one of the ways that you kind of keep your finger on the pulse to make sure that this doesn't end up in a termination is constant and consistent communication with the seller, making sure that they know that we're still actively there for them. We're supporting them. But also you need to be asking the appropriate questions to make sure that they're still progressing along on the progress that they need to make, whether that's packing the house, finding movers, finding another place to move. To Keep your finger on the pulse by asking questions, even if it's just every other day, every couple of days. Hey, just checking in, wanted to see how you were doing. Is there anything I can support you with?

Speaker 1: 3:14

Sometimes the deal will end up dead because you didn't ask the right questions. Do you know how many sellers wanted to terminate a deal just because they couldn't figure out how to afford movers, when maybe we're staring at a $20,000 or $30,000 assignment and all we need to do is front the seller a couple hundred dollars for movers or even find them movers. Sometimes it's as simple as finding a local realtor in the market that they're moving to so they can find the rental property or the next property that they want to purchase. Our job is to solve the seller's problem. So don't allow a deal to end up dead because you didn't do the appropriate communications and ask questions along the way.

Speaker 1: 4:02

Now, on the disposition side, lack of commitment on a timeline with an end buyer is a massive red flag and is screaming that you're trucking down a dead end path. If you're talking to your end buyer about assigning a deal and you tell them the closing date and they cannot commit to that, then you need to continue marketing your deal to other end buyers. Now, if you do end up assigning the deal and your end buyer now is inconclusive of whether or not they can close on that specific date, this is again a massive red flag and you need to start having a come to Jesus meeting with that end buyer and explain listen, I'm under contract with this seller and this seller is relying on us to perform on a specific date. If this is a funding issue if this is, I don't know what other issues really could come along besides just funding then we need to talk about this and see if we need to release you from this assignment and find another buyer, because we can't lose our deal because you can't perform in a timeframe Now again hard deal because you can't perform in a timeframe Now again. This should come during the vetting process with your end buyers. Now buyers have a tendency to lie, just like sellers do. Right, buyers could promise you the world say we already have funding in place, and the facts are.

Speaker 1: 5:31

Lenders are not perfect either. Lenders will have issues arise that can cause them funding issues. Some very large hard money lenders have previously straight up run out of funds where they could not fund a deal until another deal closed. It sounds astonishing and almost unbelievable. Trust me, it felt that way during the transaction, but it happens. So just because the end buyer is saying, hey, I have an issue, doesn't necessarily mean it's 100% the end buyer's fault. It could be an issue with their lender. A solution that you can provide is with another lender. One of the things I'm always armed with as a wholesaler across the United States is hard money lenders. Hey, this lender's not performing with you. Have you tried this one? Have you reached out here? Have you talked to this person? Sometimes a simple solution like that will save your deal and strengthen the relationship that you have with that end buyer.

Speaker 1: 6:39

Another commitment that you need is that the title company or closing attorney can close on the timeline that you put. There are times where a motivated seller will say I need this deal to close in the next 10 or 14 days. Now, that's a quick turnaround and I always tell the sellers it's not whether or not we can perform. It's the fact that you're asking me to perform in a timeframe that is contingent upon a third-party company, aka the title company or the closing attorney, depending upon what state you're in. When you reach out to that title company, you need to get that commitment and you need to hold their feet to the fire that they get the deal done in the timeframe that they said they could do the deal. Now, hopefully, you're regularly using the exact same title company as a closing attorneys over and over and over again.

Speaker 1: 7:36

Again, this business is all about the relationships that you build, and so the more deals that you do with those title companies or those closing attorneys, the more leverage that you're going to have with them and also just the better relationship where they can shoot you straight. This is what's going on. This is what we're waiting on. There are times where we will get a deal under contract in the state of Texas that is somewhat rural, where we can still find an end buyer, but for the title companies that we like to use, it's out of county, so the title commitment takes longer to come back to that title company. This is not an issue for the title company, it's an issue for us and the fact that, quite frankly, we don't have a relationship in every single small little county across the state of Texas. We're a very large state and, quite frankly, we're a great state to wholesale in, and so sometimes we are waiting on things that are outside of our power and even outside of the title company's power.

Speaker 1: 8:37

So always get clear and precise communication from all parties involved on their timelines. Understand that the sellers at times need more time. It's up to you to keep that line of communication open and understand where they are in their journey and buyers get their timeline up front by vetting them and keep that line of communication open at all times to make sure that they're actually able to perform on said timeline. And, with title companies, build that long-term relationship. Ask them up front if they can perform if the seller needs you to go faster than you normally would. Overall, time kills all deals. Don't allow that to be the reason why your next deal doesn't close. Let me know what you guys think of the comments. Let me know if I missed anything out. When it comes to timelines. I don't think I did. You guys always let me know in the comments, show me some love, like the video and we'll see you guys tomorrow.