The Titanium Vault hosted by RJ Bates III

The King Closer's Reacts to the WILD World of TikTok and Beyond

• RJ Bates III • Episode 582

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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
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​125 contracts in 50 days (all live on YouTube)
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Speaker 1:

what's going on everybody. Welcome back to the king closer reacts. I am the king closer. Rj bates the third. This is the series where I'm going to watch a bunch of crazy youtube shorts, tiktoks and reels. See if I agree or disagree with their takes. Let's get it crazy. Let's get into the first video.

Speaker 2:

Let me break the Burr Method down for you in five easy steps. You're going to look for a rundown property in a neighborhood. Let's say this neighborhood is worth $250,000, but this is the one with overgrown trees, maybe shingles missing. You pick this one up for $100,000. Did he say seagulls or shingles missing you?

Speaker 1:

pick this one up for $100,000. Did he say seagulls or shingles? I swear he said seagulls. I'm just playing with you. All right, let's get back to it.

Speaker 2:

You strategically renovate it and put $50,000 into it. Now the building appraises for $250,000. You go rent it out to a quality tenant. Let's say you get two thousand dollars a month. You go back to the bank. You show them I got consistent, predictable income with this new lease. They loan you 75 percent of the new value, which is two hundred fifty thousand seventy five percent. That's one hundred eighty seven thousand five hundred dollars. You pay off your first loan of one hundred fifty thousand. You walk away with thirty37,500. Now you got to pay this loan back though.

Speaker 2:

Well, you rented it out for $2,000. Your new loan is only going to be about $1,300 and something dollars with principal interest, taxes and insurance. So you have enough money to pay the mortgage plus all the expenses. You take that new money and you do this over and over and over again. You do that in a strategic area, which I can show you how to do that as well. That is going to appreciate. Let's say, 5% a year. 5% of $250,000 is over $1,000 a month. You're getting an appreciation on an asset you have no money in. You actually got $37,000 back and you pay no taxes on that 37,000 back and you pay no taxes on that.

Speaker 1:

That's the burr method broken down in its simplest form, all right. So I personally love the burr method. I do think it is the ideal way to build a rental portfolio. That was a solid breakdown. I did enjoy that one. He kind of loosely threw it out there at the end.

Speaker 1:

But when you do the refinance and you only had $150,000 in and you refi at $187, loan, it's not income and that's where, as a landlord, it really makes a difference for you over the long haul, because this property is only cash flowing about $600 a month. So even though you rehab it upfront, over the course of time there's going to be depreciating parts of the property. Right, you're going to have capital expenditures. Some locations southern states, where we get regular hail storms insurance pays us out for roof replacements. But up north, where those hail storms are not as common, you would have to replace a roof, hvacs going out, hot water heaters, boilers, things like that that go wrong when a tenant moves out and you have to do a tenant turnover with redoing the floors, paint touch-ups, maybe some appliance work, things like that. That adds up and that $600 a month of cash flow disappears very, very quickly.

Speaker 1:

So, realistically, what he's talking about here is yeah, you're cash flowing every single month, assuming that that money goes away. Your appreciation over the course of time is your secondary payday, when you decide to sell that asset or refi again. But ultimately, the most important thing there is that equity that you capture with the refinance of a loan. Otherwise, as a landlord, you're really going to be struggling, so as a wholesaler. This is why it's extremely important to understand when you are underwriting a deal. Our main objective is to provide equity opportunities to our end buyers, because that is what sustains their businesses. It's not always just about cashflow. It's about equity first.

Speaker 3:

How much money do you think you had in your bank when you started?

Speaker 4:

$200.

Speaker 3:

Okay, just so. Everyone knows that the crazy thing about this industry is literally there is no barrier to entry. Nope, other than grit, grind, hustle, that is the only thing. So you had 200 bucks in your bank account. You jumped on the phones as a cold caller headset on an auto dialer.

Speaker 4:

Smartphone yeah, hopped on a cold call list and it was relatively quick. Like I think, I got my first deal within a month or two.

Speaker 3:

I think everyone can get a deal within 30 days or less. I really think so.

Speaker 4:

Yeah, and it was crazy deal, dude. This guy had a house that was infested with fleas. Love it Like. It looked like TV static on the floor. There were so many fleas jumping like they were coming up on my legs and I see why he wanted to sell it for a good deal. I think we made like 16,000 on that first deal Immediately. Put that back. Start my own cold call team. Yep had two or three cold callers, get them less and then that turns into three, four, five deals. Boom. Put that into PPC and then you know the snowball effect from there.

Speaker 3:

So quickly it started working out for you. That first full year on my own. I think it was like 600.

Speaker 4:

K and then the second year it was like eight, 15, which was last year, yeah, no shit.

Speaker 1:

So on these types of testimonials about the power of wholesaling you know, eric there kind of threw out it's about that grit and that grind and that hustle I would say one thing that needs to be added on there is the skill sets. The skill sets that are necessary to one comp and underwrite, know what a good deal is. And two, how to talk to sellers. Right, not anybody can just jump on a phone and just start cold calling and immediately see those results. And I'm sure some of you will drop comments in there and say, listen man, I cold called for a long time and I didn't get a deal in my first 30 days. Sometimes that can be the list, right, maybe you're calling too low hanging fruit of a list. You know high equity, absentee owners, everyone knows to call that list. But it could also be the fact that you lack the skillset and the understanding how to conversate with a seller and really negotiate good deals for your end buyers, right? The lifespan of a wholesaler normally is I'm trying to figure out how to talk to a seller. Now I'm starting to get deals under contract. I didn't underwrite correctly so I had some terminations. Now I start focusing on building the skill set of comping and underwriting. Now, once I get that, I have to build a skill set of dispositions, building relationships within buyers. Now we start seeing the regular success.

Speaker 1:

I love these types of stories because it's similar to mine and Cassie's a decade ago where it was like, hey, we tasted that success early on. And even with some of the older marketing techniques MLS deals, cold calling, direct mail these are some of the things that we did in those first couple of years. But not everyone has the same story and the same journey. So if you haven't seen the exact same success as this gentleman right here, don't hold your head down. Focus on building those skill sets, because it's not so much just about. Am I putting in the hour? Am I hustling? Am I grinding? It might just be. There's a few little tweaks that you need to make on your education.

Speaker 6:

So let's start with the big question why should you start wholesaling ASAP? There's a lot of different reasons, but we're going to start with this one. The market is shifting. Interest rates are rising, a lot of people aren't able to make their mortgage payments. Pre-foreclosures are going up.

Speaker 6:

The market is kind of stale for a lot of people on the MLS, so where do they turn when they can't sell their properties on the MLS? They're willing to sell them more at a discount to get it done and, no matter what economy we have, people are going to continue to buy real estate at discounted prices. So whether or not there's a great market going on and it's a buyer's market or it's a seller's market, it doesn't matter Real estate wholesaling will always exist because you're always finding discounted properties and investors are always going to invest. So, with more and more people defaulting, with more and more people getting behind on their payments and credit card debt, they're going to be needing to sell their properties, and we can be there to help them know that they have options to sell their house fast instead of just listing on the MLS and hoping and praying someone will buy it. Let's start with the big question.

Speaker 1:

So I think Nathan was kind of close there when he was talking about from a buyer's perspective. There's always going to be buyers that are looking to pick up discounted properties. That's the main reason why we should always be wholesaling, why if you haven't gotten started yet, we should start. But from the perspective of motivated sellers, no matter what's going on inside the market, there's also going to be motivated sellers because we have a tendency as real estate professionals to assume that financial distress is like the low hanging fruit, like what Nathan's talking about their defaults on their mortgage payments and interest rates rising and that's causing people to become distressed. But you're always gonna have the tired landlords that have vacant properties now the physically distressed properties there, the tired landlords that have vacant properties, now the physically distressed properties. There's going to be the unwanted inherited properties. There's going to be the the, the properties that have a death in the family, that are involved right, the the 70 year old couple that have lived in the house for 50 years and now the husband passes away and the widow is like what do I do with this large home that I can't take care of myself?

Speaker 1:

These situations are the ones that, in my opinion, the wholesalers are helping sellers more than pre-foreclosure and straight financial distress. And the reason why I say this is because, when you stare at the financial distress elements, what does that scream? It doesn't scream that someone needs to sell their house for a discount and as cheap as possible. It screams that they're financially distressed and, if anything, they probably need more money. Right so a physically distressed, and if anything, they probably need more money. Right so a physically distressed property, a tired landlord who's already made his money for years and years and years but hasn't reinvested in it they need to sell that property for a discount to be done. The widow who now has an asset that she can't take care of but just needs enough money to move into a smaller asset so she can live out the rest of her years that is someone that needs a wholesaler. That is one of the reasons why I believe, no matter what's going on in the economy yes, there's always end buyers, but there will always be those motivated sellers.

Speaker 5:

Let's test your wholesaling knowledge. Answer this real estate wholesaling question. What's a good CRM used for wholesaling? Is it A to store repair costs, b to manage leads and contacts or C to track Zillow listings? Take a second to think. If you chose B, you're right to manage leads and contacts. If you like this and want more real estate related questions, then like and subscribe for more.

Speaker 1:

Listen every now and then I worry that we're living in the minority report and AI is coming to get us. And then sometimes I see stuff like that and I'm like we got time, we're good. Right, ai is good. It's not good for everything. Okay.

Speaker 1:

Now she asked me to think about what is a good CRM? What does it do? Okay, obviously, a CRM for us is is to manage our leads Right, but the best CRM is Resimply. Okay, and here's the thing. I need you to go sign up for Resimply, because I don't ever stamp my approval on a CRM, but I actually have fallen in love with Resimply.

Speaker 1:

We're using it inside of our business now, and I've been asked for years and years and years, rj, what CRM to use, and some of them were custom builds that we had, right, we built out a custom CRM on QuickBase. At one time we did Trello, we did Monday. We've had beast mode podiums, custom podiums and all of this and, quite frankly, none of them lived up to what we needed. But Reassembly has done this, and here's the reason why Because one, sherrod and Sinead over at the Reassembly team are amazing to work with and they listen to our feedback, not just Titanium's feedback, but Titanium University's feedback. They are integrated into our community, they're a part of it. They get in the coaching calls, they hear the feedback from our members, so they're customizing what we need inside of our CRMs for the way that we manage our business.

Speaker 1:

So if you are planning on being a part of Titanium University which, if you're not, what are you doing? You should plan on using Resimply as your crm. Now here's what I want to offer you. I want to offer you a free trial on resimply and also, when you sign up for resimply, you can tell them I want the titanium build out, and they will give you the exact same build out, drip sequences and all those little Automations that you think you need inside of your CRM. So go to recently dot-com, slash Titanium, get your free trial and also get the titanium build out. That is the best CRM in the game.

Speaker 7:

I get excited when I see a bando. I did got to be the ugly house. That is the best CRM in the game. Saturday and Sunday yeah, yeah, excited when.

Speaker 1:

I see a bando. I want to know if he answered the phone or not. Where's the rest of my video? He got a voicemail Brother. That thing was tore up.

Speaker 1:

Now here's the thing about driving for dollars and also physically distressed properties. Now, see, we look at that as a wholesaler and we say that seller needs us. That house is ripped to shreds, right Blue tarp, I mean. It looks like it's split in two. It is ugly. Here's the other part of it. We get it under contract, we get it super cheap, and then we go to our end buyer and our end buyer says now listen, RJ, I've gotten 25 wholesale deals in my email today. Why is that the property that I should buy? It takes a special kind of end buyer to buy that type of property. So if you're looking at the physical distress elements of a property, be leery of something that bad and you need to buy extremely discounted. This is why, inside of our profit calculator, Cassie always talks about is the juice worth the squeeze? Right?

Speaker 1:

Think about what the buyer has to put into that, Not just about the purchase price, but about the amount of rehab, the amount of things that could go wrong. See, a difference between a $25,000 rehab on a property is basically I'm coming in, I'm painting some walls, I'm replacing some flooring, I'm throwing some appliances in there, and that's it right. $25,000 evaporates very quickly. There's not a lot of risk, right? What's the risk? My painter's going to not paint the walls correctly, the flooring's not going to install correctly, my appliances from Lowe's aren't going to install correctly. Very little risk On that, though. There's structural damages. There are things that have to be replaced all over. You're going to be hiring multiple tradesmen and you essentially become a general contractor at that point. There's a lot of risk associated with this.

Speaker 1:

So when you start thinking about doing a $75,000 to $100,000 rehab, it's not just about the amount of money that you're putting in, it's what could go wrong. How many times could I have to do something to get it done correctly? Will I have to pull permits to even get this approved? There's a lot of risk associated with that. So, as a wholesaler, our job is to buy those types of properties even deeper and give our buyers a better deal. All right, guys. That's our episode of the King Closer Reacts. Hope you enjoyed it. This weekend I'm going to be chillaxing at the house much better than last weekend, where I was on a bus with 19, 13 year olds which, by the way, I did survive barely. So show me some love in the comments, Let me know which one of these things was your most favorite. Make sure you like the video and we'll see you guys tomorrow.