The Titanium Vault hosted by RJ Bates III

Should You Have A Partner In Wholesaling Real Estate?

• RJ Bates III • Episode 598

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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.

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Over 10 years in the real estate investing business
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Speaker 1:

We're going to be discussing should you have a partner in wholesaling real estate? This is a conversation that I regularly have to have with newer wholesalers and it's kind of funny because a lot of newer entrepreneurs they want to have a business partner early on. But then it's the conversation as to why do you want to have a business partner? So that's more of what we're going to be talking about and trying to help you determine whether or not you should have a partner or whether you shouldn't. Now I will say upfront, obviously, because I've had a business partner for the past 14 plus years of being an entrepreneur I am a partner type entrepreneur. I like having a business partner, but that's my personality and that's what I want to talk to you guys about is why do you want to have a business partner? Do you think it's the best setup for you as a business owner and operator? And then also the reasoning behind it and also how to identify whether or not you have the right business partner and whether or not it's going to succeed long term. Now I view partnership and business very much like I do in a relationship. It should be something that you're going into and trying to have forever, and that's the conversation that I've had with my business partners is hey, is this something that you want to do 20 years from now? Is this something that you want to do all the way for the rest of your career? Because otherwise, if not, we can do business together, but it doesn't necessarily mean we need to have ownership in an organization, a business, together. We don't have to formalize this. We could just do deal by deal. We don't have to become literally married in our business together forevermore.

Speaker 1:

So, looking at this, I feel like many people jump into a partnership way too early and loosely, and I even have made this mistake. Me and Cassie combined have made this mistake where it was just. Instead of doing some sort of joint venture together, we immediately jumped to partnering with other people, and in the very short run, we learned hey, this isn't something that we should have done, this isn't a person that we should be partnered with. We don't align in our core values, in our work ethic and how we really view our goals together, and so I'm going to give you guys kind of a little bit of a tip on how to overcome that. It's something that we have leveraged and really something that I'm most proud of with Titanium University is that business partnership, not only with myself and Cassie, but also with Nick and Sema, where it's four business partners, it's not just two, and that's a lot of personalities to manage. It's also a lot of responsibilities inside of a business to manage and how we overcome that.

Speaker 1:

Now, going back to I believe many people partner who shouldn't right, it takes a lot of sacrifice and understanding to have a partner in business. Just, quite frankly, the low hanging fruit thing to think about is is how the money is split up, right? I mean, why do we run our business? It's to support ourselves, to make money. It's how we feed our families. For every business partner that you add on, that's one more mouth that you have to feed. So if you go out and you do $50,000 in a month, that's a great month, right? Unless there's four business owners, and then, well, that gets spread up pretty quickly and it's still a good business, but it's not as much money as if you were doing it by yourself. And so this is something that I always thought the newer entrepreneurs about is hey, what do you really want your business to look like? It's a completely different type of operation to run a $1 million a year revenue company, from a $3 to $5 million a year company to a $10 million a year company, there's a lot of overhead that has to come in when you increase the revenue. There's additional administrative roles that you have to manage the training, the hiring, the recruiting everything that comes along as you grow and as the business owners, your take home gets diluted as there's more overhead, more people and more business partners. And so, realistically, when I think about should people partner up or should they not, early on, it's well, let's think about what your individual goals are inside the business of the business.

Speaker 1:

Now, sometimes it comes across where you see people that are skilled and talented and they're driven with their energy by certain aspects of the business. Right, some people love acquisitions, lead generation, but it's draining of their energy to focus on dispositions and transaction coordination and the paperwork that's involved. Now that's someone that should absolutely look into partnering up with, someone that that's a skill set that they want. Because, even though you could delegate that out to an employee, who's going to own the training of that role, who's going to own the management of those people that you delegate those tasks out to, and that could be just as draining, or more so draining than just doing the task itself, always having to teach someone how to do dispositions, always having to worry about what's taking place during transaction coordination, and so these are things that you need to think about when you're contemplating bringing on a business partner. I was having a meeting with a TU member who was using that example perfectly, where he was saying I love acquisitions. Everything else inside the business is extremely draining. It drains me of my energy and, quite frankly, it makes me not love wholesaling.

Speaker 1:

That's someone that should potentially look at partnering up with someone who has a passion for the other sides of the business, the other aspects of the business. Now, again, you have to look at it and say in order for that to make sense and you still make the exact same amount of money you almost have to double the revenue, or even triple the revenue, or otherwise it wouldn't make sense. Now, that's one of the things that I want to talk about. When it comes to partnering in business, it should not be well, one partner plus another partner equals two. It should be one plus one equals 10.

Speaker 1:

And what I mean by that is is, if you bring someone on as a business partner, they should make your business so much more efficient and profitable that you're not even contemplating whether or not you made the right decision by bringing on a partner inside of your business. It should absolutely extrapolate throughout your business where the growth is enormous, and otherwise there is no reason why you partnered up. Right? I don't want to go out and make the exact same amount of revenue that I could have done by myself, or double that, and still have the exact same amount of take home, because then I'm having to do twice as many deals Right, twice as many headaches to make the exact same amount of money, even if I'm only in charge of the exact same thing right Acquisitions. Well, if I did half the amount of deals, that's easier for me to accomplish for the exact same takeover. So your business partner should always make your business that much better, and that's what I feel like me and Cassie have been able to accomplish.

Speaker 1:

Quite frankly, I wouldn't be in the position where I'm at today if it wasn't for all the business partners that I've had, even the ones that we had to learn lessons by being business partners together. That was a part of my journey, but having Cassie as a business partner for the past 14 years is literally the best decision that I've ever made, and the reason why is because one accountability Having her there alongside me every single day I wake up and I know she is counting on me to show up and give 100%, because I expect the exact same thing of her and because of that, every day I show up and I give 100%. Now, that is a unspoken agreement that we have together as business partners. That expectation was set before we ever signed documents on an LLC right. That doesn't mean anything. The expectation that we set for each other was this is what we're going to do with our careers and this is what we want to accomplish. We knew that we had aligned goals. We knew that we had aligned core values and we also knew that our work ethic was very, very similar. And so, day in and day out, we show up on time, we do our job, we prioritize doing the right thing and making sure that we're accountable to each other. Now, at this point, we've been doing it for so long. We don't really have to have conversations about whether or not we're doing our job or not doing our job and, to be quite frank, that's how partnerships are supposed to work. It's not just another employee. It's literally your partner in this, so you need to know that up front. So the way that you can really make sure that you have the right partner is what we like to refer to the crawl walk run stage.

Speaker 1:

So before you ever get on in an LLC or an entity, together, crawl, do something together, do some JV deals. Maybe one does acquisitions, the other does dispositions, whatever that looks like. Make sure you just do some joint venture deals and get to know each other better. You're going to learn a lot about your business partner by doing deals a hell of a lot more than you would just by having a conversation. You need to get those deals across the finish line and see what happens when things go right and when things go wrong. Sometimes, when things go right, there's people out there that will completely nuke the business. They'll self-sabotage. There's other times when things are going wrong, where emotions become involved, finger-pointing, blaming, which that's the worst thing in the world that could happen inside of a business partnership. So you want to get deals across the finish line, but you also want to have some deals that don't go right. You want to see how that person handles failure, how they handle some struggles before you get locked in a long-term marriage. Then when you move to that's the crawl stage let's walk together, do something that's a little bit bigger Maybe it's doing a flip or a novation together, something that's a little bit more formal, so you understand how they handle the liability of a bigger deal than just a couple of JV deals. And then, eventually, once you have determined that this is something that someone that I want to partner up with long-term, that's the run stage and that's where we're at at Titanium Investments and Titanium University.

Speaker 1:

Now, we did this exact same strategy when we started TU with Nick and Simmo. Now, for those of you that don't know the story, simmo was undergoing cancer treatment at the time and Nick attended the Titanium Crucible. It was the last ever crucible that we had here at Titanium Investments and he sat on the back row During during the initial two and a half hour segment, cassie and I got up there. We did our introduction and explained our story and what they were going to learn at the Titanium Crucible. Now, during the first bathroom break, nick walked up to me and he literally shook my hand and said Dude, I've learned more in the first half of the first day than I have in all these other programs I've been a part of. Why are you not a lot bigger in the wholesaling industry? Now that one question is what led to us eventually having a much deeper conversation about what Nick could bring to the table in regards to our education program. Now, nick and Sima had a background in running marketing and lead generation for an education program. That's what led to us deciding let's crawl together, let's do something.

Speaker 1:

Now, the first thing that we ever did together was this Tuesday Live. We started this about a year and a half ago, maybe close to two Well, we're actually getting pretty close to two years where it was every single Tuesday at 2.22 pm. This was Nick's idea. Nick said I think we need to have, once a week, a scheduled live. What's the best day? And I said Tuesday at 2.22. Now it's 2.22 because 22 is the titanium, it's the 22nd element, and also Cassie was born on February 22nd. So it's a little nod and shout out to my partner there Cassie. But that was the initial crawl.

Speaker 1:

Now then our walk stage was a lead magnet, the lead magnet that probably each and every one of you has, which is the closers formula. If you don't have that, it's right down below I think it's the first or second link inside of our description to show you guys how to close deals. Now it's a lead magnet in the marketing world, but it's to get us y'all's contact information so we can tell you about the programs that we eventually want to sell you. That was our walk stage and then we decided, hey, before we formalize this, let's do something a little bit bigger. So we elongated the walk stage by doing the closers formula, which was a live in-person event here at the titanium headquarters where about 50 to 60 people came in and we closed deals live inside of our office. Now we sold out that event. We did a Black Friday product Closers Blueprint, titanium Profits and we exceeded all expectations that we had for everything.

Speaker 1:

And what we found out was how Nick and Sima work. We learned out the little personality quirks. We learned they go to bed at like 6 pm our time and they wake up at like 3 am our time. That's weird. That's something you need to know about someone that you're going to be in business with. That was an adjustment that Cassie and I had to make. We also learned that Nick and Sima make zero decisions after 5 pm. That's just a rule that they have for themselves. They also learned about different quirks that me and Cassie have Now.

Speaker 1:

The only way that we were ever going to know this was not having a conversation or Zoom meeting together. It was by actually doing the work, and that's why it's important to crawl and then walk before you decide that you want to run. And so by doing these things together, we learn each other's skill sets, strengths and little quirks and those nuances. What we found out was hey, it's not what I'm used to, but I can get used to it and, honestly, I've taken a lot away from how Nick and Sema carry themselves in their lives and carries over into business, and so it's made me a better person. It's made me a better business operator, and that's what inevitably led to us making the decision to become business partners and that's what led to the birth of Titanium University business partners and that's what led to the birth of Titanium University that started February 22nd, 222 of 2024.

Speaker 1:

It's been one of the best things that we've ever done. Now, the reason why it's one of the best things is because, obviously, it helps a ton of you guys. We're extremely passionate about it, but I'm also very proud of how we run our business together, but I'm also very proud of how we run our business together. I love the fact that each one of us understands what our role is and we don't have to cross into that and question what everybody is doing. I'm blessed in the fact that I get to do something that I'm extremely passionate about day in and day out, which is sitting in front of this camera and trying to make you guys better wholesalers. Cassie's extremely passionate about what she's in charge of, and Nick and Sima are extremely passionate about what they're in charge of. Most of you people don't even know who Sima is, but she is just as vital as myself, nick and Cassie. That is how a business partnership should work.

Speaker 1:

Now, going back to this, we are in business to make money. Knowing that there's four of us, that means we have to make quite a bit of money to make sure each and every one of us is happy inside of our role. The business has to be extremely profitable in order for us to get compensated due to our skill sets. We are all high-level entrepreneurs that were massively succeeding before we started Titanium University. Nick and Sima had an eight-figure business that they sold in 2023 before we even met them. So, coming into this, we knew, hey, we have to be extremely successful. How can we do that? And again, going back to some of the core fundamentals that we have as business owners and operators here at Titanium, nick and Sima completely aligned with that Hedgehog concept. That's one of the core things that we believe in here at Titanium. Well, that was easy for Nick and Sima.

Speaker 1:

We don't ask Nick and Sima to come on here and teach people how to wholesale real estate. That's not in their skill set. You shouldn't ask a partner to do something that's not a part of their strengths. You should make them lean into their strengths solely. And that's why most of you don't know who Sima is, because she's the one that's out there constantly buying the ads on Meta and Instagram and YouTube and TikTok, doing all the things to make sure that you guys eventually sign up for TU. That's her job. Nick is in charge of the funnels and the copyright and helping me come up with topics for content. These are the things that he focuses on day in and day out, and that's why I'm so happy and pleased with that business partnership Now.

Speaker 1:

In the past, when I had business partnerships that failed, it was because those expectations weren't set up front. We didn't crawl, we didn't walk. It was we're buddies, we get along. It would be awesome to be business partners let's go do this. But the skill sets and the strengths didn't marry each other very well. They were too alike, and sometimes that's a massive issue. See, just because someone's a friend or someone you get along with doesn't mean that it's going to make a great business partnership. Because of that, there was times where we had an overwhelming amount of strength in one area but massive weaknesses in our business in other areas.

Speaker 1:

So when you look at who you want to partner with, make sure, one, the strengths are spread out. Two, that the work ethic is lined up and the goals are lined up. See, nick and Simo when I sat down with them the first time, I said I don't even want to have this meeting if this is not something you want to do for the next 20 years, if this is not something that you are so passionate about that this is what you want to be doing. When you decide that you want to retire, there's nothing for us to have a conversation moving forward. That was the initial sentence out of my mouth, and the great thing about it was is that is exactly what they were looking for in a business partnership. In fact, they were actually never wanting to get into another business partnership at all. They were looking to be other business partnership at all. They were looking to be, as husband and wife, business partners with each other. They never wanted to go out and find an RJ and a Cassie and so at this point, because the strengths married each other and they worked so well, that was what has aligned us as a business.

Speaker 1:

Now I see too often where it's I'm struggling. If I can go out and I can find a business partner that can help me in some of my areas of weakness, maybe that will lead to success. Again, I don't think that is the solution. I think that is you not looking internally and trying to fix some of the weaknesses that you have. Too often I see people blame a weakness that they have a business on the fact that it's something that they don't enjoy or something that they don't want to do in the business. Ultimately, a business partner is not that solution. It should be someone that can do it better than you. That's their strength, that's their skill set. It also makes the business that much better. Nick and Sim are great at marketing. That is their strength. Me and Cassidy, we're okay at marketing, but we had already done education for years. We had already sold out crucibles, we had already sold low ticket items. It wasn't like we didn't know how to do it, but that's why they've been able to come in and multiply what we're able to do with TU to another level.

Speaker 1:

Now the same thing inside of your wholesaling business. If you're looking at it and you're saying I'm not getting enough deals across the finish line, does that mean because you lack in a skill set of lead generation and acquisitions? Is it because you lack a skill set and dispositions and transaction coordination? Where does it lie and how does a business partner really align to help you there? Now, when it comes to work ethic, what I really see is more often than not, people overestimate what they're bringing to the table. As I interview and get to know more and more wholesalers, it's very few and far between where I see someone that's willing to show up five days a week and put in eight to 10 hours a day Very few, majority of the time it's. Someone says I can do three to four hours a day and that's just not enough.

Speaker 1:

If you're going to rely on a business partner and expect them to come in and do more than you, your goal as the business partner should always be to outwork your business partner, not complain because they're not doing enough. It should be that you're trying to impress them. That is always my intention with each one of my partners. That is always my intention with each one of my partners. I want Cassie, Nick and Sima to look at me and say no one is more consistent and hardworking than RJ. I know exactly what he's going to do. I can count on him. That is the accountability that a business partner brings and because of that, I always look at my business partners and I'm so proud of what they do for our business.

Speaker 1:

Now, too often, what I hear is the finger pointing when things don't go right. This person didn't do that. That was their responsibility. That is not what you're looking for in a business partner. If the business is struggling or failing in some area, it shouldn't be because you're pointing the finger at the partner. It should be that you're pointing at the business and saying how can we be better? 14 years of partnership with Cassie, I can tell you we've done a lot right, but we've also done a lot wrong, and one of the worst things that we've ever done is become disgruntled with each other and point the finger and blamed it on each other. It's the worst thing that can ever happen, and if that is something that you would even remotely consider going into a business partnership, that means you're not at the run stage yet, because ultimately that means you don't know if you have the right business partner. If I woke up today and there were no booked calls inside of titanium university, I'm not going to call Nick and Sima and point the finger at them and say you're not doing your job, because I know they're doing their job. I'm going to call and say what's the issue, let's figure it out together on how we can fix it.

Speaker 1:

That is how a business partnership is supposed to work and function, and too often I see entrepreneurs get to the point where they're nowhere near that. They have no self-accountability and they don't look at it that way. They look at it as it must be the other person, and this is why so many business partnerships fail, because we jump into them too quickly. Some people shouldn't even be in business partnerships to begin with, and then, when things don't go right, it's always the other person's fault. This is why business partnerships fail.

Speaker 1:

And so you need to look at it and say am I in a position where I want to have that partnership? I can tell you the majority of people are not in that position. They don't want to split the profits. They don't want to work and get as two, three, 10x as many deals done. They care more about what enters their bank account. To be honest with you, I don't really care about how much money I make. I say that because we make a lot of money and I'm taken care of. Of course. At one point in time I cared about that. I care more about growing the business and working with my business partners to make it what we want it to be 20 years from now. The money comes. It's about creating the reality that we want, and I know, because I'm aligned with the right people, with the right business partners, without a shadow of a doubt, that I will be able to accomplish that. That is the confidence that you need to have before you go into a business partnership long term. And now the other thing is, most people get into a business partnership because of fear. Fear of maybe I can't do this by myself. Well, it's also. Comparison is the thief of joy. Social media now makes it easy to say that.

Speaker 1:

A wholesaling operation, oh, six figures a month. We just talked about it last month or last week. Last Tuesday we went live with Brandon and Abby. Right, multiple months of six figures. Well, that sounds great on the surface, but there is two of them. Yeah, they're together and they're in a relationship. That's still two mouths that have to be fed, two people that are doing responsibilities day in, day out, that have to earn income. People that are doing responsibilities day in, day out that have to earn income. So ultimately, if you eliminate the fact that there's two of them and you go down to one, that's $50,000 a month.

Speaker 1:

$50,000 a month is a lot easier for one person to accomplish as a solopreneur than two people earning more than $100,000. And again, remember, if you're going to bring out a partner, there's no point in doing $100,000. And again, remember, if you're going to bring out a partner, there's no point in doing $100,000 if you can do $50,000 by yourself. It's twice as many transactions, twice as many problems that can come up. The point here is to make your business to $250,000 a month, $300,000 a month.

Speaker 1:

I'm using that as an example of rough numbers, but that is what you should be looking at. The majority of people don't have such strong aspirations or the work ethic to accomplish some of these big numbers that they see and hear on social media. So before you jump into a partnership because of comparison or the fear that you're not good enough, really look at it and say how much work and effort do I want to put into this business? And what is most important to me, when I talk to most solopreneurs, I hear them say somewhere around the range is if I could do $20,000 to $40,000 a month, I would be more than happy. Well, let's break that down. The average assignment fee is $15,000. Now I've heard different numbers 14, 17. Some people have even said 20 plus thousand. It depends on your market and what you're doing there, but let's just say it's $15,000.

Speaker 1:

The majority of new wholesalers are working by themselves, would be completely okay with closing two deals a month and keeping all the money. Now my question to you is do you think it would be worthwhile having a business partnership to close four deals and have double the money? It doesn't make sense. So, ultimately, think about what you want to accomplish? Is it because you want to have a vanity metric of saying that you've done $100,000 a month? Or is it more about the fact that you want to build an organization for the long run that does a lot more money and you're able to delegate the task that maybe you don't have a skill set in? If that's the case, that's where you need to look at adding on a business partner. Otherwise, if it's just to compare yourself to what you hear about on social media, it's for the wrong reasons and long-term I don't think that business partnership will work out.

Speaker 1:

Like I said at the beginning, I am a partner type guy. I like the accountability, I like working with other people. I would be pretty miserable if I was working all by myself day in and day out. But I also know the sacrifice that I have to make and I have to show up day in and day out, not only for myself and for my family, but I have to show up for those partners, those partners that rely on me to give a hundred percent and to be the best RJ that I can be day in and day out, because that's the exact same accountability that I'm giving them and what I expect from them. All right, that's what I got about. Should you have a partner in wholesale and real estate, let