The Titanium Vault hosted by RJ Bates III

The Truth About Wholesaling In Colorado!

• RJ Bates III • Episode 600

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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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Speaker 1:

welcome back to wholesaling around the world the colorful colorado edition. Now, overall, colorado is one of my least favorite states to wholesale in, and I think it has to do to the misperception that we have of Colorado due to the amount of land mass that it has. See, colorado ranks as the eighth largest state in the United States in regards to total land area, but in regards to population, it is the 21st most populated state, with just north of 6 million people. So in reality, if we look at all of these different reviews of the states in regards to virtual wholesale and my takes on it, we know the more populated a state is, the better it is for virtual wholesale and this increases the amount of motivated sellers that we could have, as well as the amount of end buyers that we need in order to complete a transaction. So if you look at this, colorado, if you look at a map, feels like it should be one of the better locations. It's got large city like Denver, but population wise it ranks right there in the middle 21st. Population-wise it ranks right there in the middle 21st. Now my personal feelings about Colorado if I had to rank it, it would probably be somewhere in the 30s because it is west of Texas and I have said anything west of Texas from where I am Dallas-Fort Worth pretty much is harder on acquisitions, easier on dispositions can lead to higher assignment fees but can be more difficult to actually get a deal across the finish line, and that is my sentiment about Colorado in general.

Speaker 1:

Now I have had a hard time doing deals in Colorado, going all the way back to 2020, going all the way back to 2020. Mainly because Denver, being its major metro, is saturated. I mean, there's a lot of competition there, there's a lot of local wholesalers and it is kind of hard to come in and fight your way through. I wouldn't compare it to similar size cities like Phoenix and Dallas, where I do feel like I could go in. I've always said virtual wholesalers, our job is taking the line from. There will be blood the movie you know I stuck my straw in your milkshake and I drank your milkshake. It's really not that easy to go into Denver and get deals. In the past five years we've done less than 10 deals in Denver. Now, part of the reason why I feel that's the case is because our main lead well, our only lead generation tactic nowadays is PPL and going back to even pulling lists on batch leads and prop stream and texting and cold calling. It was just highly competitive. And on the PBL side I just don't see as many leads in Colorado as I do in other places that I love, like Ohio, michigan, texas, florida, georgia, those states regularly we're getting leads in. We're not getting as many leads as opportunities right. We don't get those at bats in Colorado.

Speaker 1:

Now, a bit of it in Colorado is there's not regulations against wholesaling. One thing that I read during my research for Colorado is the one thing you do need to be aware of in Colorado in regards to regulation is be cautious with how you advertise your wholesale property. So when you're doing dispositions, you want to be transparent, you want to disclose that you are assigning your equitable interests and that you are a wholesaler. So very similar to other states out there. It's not like there's a formal regulation like there are in other states. But that would be one area where you could get really bamboozled if you're just not paying attention to disclosing that you are assigning your equitable interest.

Speaker 1:

Now, in regards to our experience of the deals that we have gotten across the finish line in Colorado, we've done Denver, like I said, less than 10. Going further up north, we've done deals in Fort Collins, greeley. Going down south from Denver, we've done deals in Colorado Springs, pueblo. So, funny enough, pretty much if you're going to do deals in Colorado, my experience is it's going to be somewhere off of Interstate 25, right, which runs north and south through the state of Colorado, denver being the main metro area where we've done deals. We've done deals around right, boulder, where the Colorado University is. We've done deals there.

Speaker 1:

One thing that's kind of unique about Colorado is that there is so much land that raw, vacant land is a viable strategy in the state of Colorado. We actually own quite a few acres in Colorado in that rural areas right, we've picked them up. Seller finance it's one of my passions. Right, you've heard the saying they finance it's one of my passions. Right, you've heard the saying they're not making any more dirt. So we have obviously picked up quite a bit of dirt in Colorado, hoping for expansion in the future to some of these areas where we've picked up, where we could sell it for a significant amount of profit while getting the tax write-off over the next several years. So that's one of the things that you're going to see If you are going to be doing marketing and lead generation in Colorado. You will come across quite a few leads that have acreage and land available, and one of the things that we've always done in locations like Colorado, utah, nevada, wyoming, idaho, montana when we talk to those sellers about this land that they have available, will they sell it.

Speaker 1:

Seller finance. This can really help you during the dispositions process as well as pick up some land yourself. Right, some of this land that I've been able to pick up five, ten acres less than five thousand dollars on terms, you know. So I think we're paying like eighty one dollars a month for five acres that we've picked up, so a really cheap amount that annual taxes on it are basically nothing. Just, you have to make sure you still swipe your card and and it every year, but it's really insurmountable. So insurmountable is that the right word? It doesn't equate to much. That's what I was trying to say.

Speaker 1:

So, ultimately, pay attention to the vacant land because it can be an option for you. But, moving to the west side of the state, where we have Grand Junction, durango, some other smaller cities like that, these are tourist locations. We've done some deals out there, but few and far between, and so ultimately for me. I don't have much love for the Colorado market. It's just not one of those locations that we've ever done a ton of volume. I will say deals that we have done have been pretty healthy assignment fees, so that's good. Dispositions has been easier. But we have come across some issues lately in Colorado Springs and Denver with dispositions. Some of the buyers, it feels like, have got a little bit more picky than they were back in 2021, 2022.

Speaker 1:

This is definitely not a market like in the Midwest and the Sunbelt States you guys have heard me talk about this in the Indianas and the Michigans and the Alabamas, where you have to pay attention to those as-is comps. This is definitely more of an after repair value market. What I mean by that is when you go to do the comps you really pay attention to what could this property be worth once it's fixed up. You're not really needing to pay attention to the competition on the market. I'm not saying you have to just completely ignore it. There's just not going to be a massive difference between what a traditional wholesaler, if they do their underwriting, would come up with what they refer to as a maximum allowable offer to the listed in the current market value properties Kansas City, detroit, birmingham, jackson, mississippi you're going to see a drastic difference where, if you were to run your comps and you underwrite it to the maximum allowable offer, you're going to see something like 50,000, but then on the market you would see properties listed for 25,000. That's a massive issue. You're not going to really come across that in most locations in Colorado. Now, the more rule that you get, the more of a possibility that's the case.

Speaker 1:

Overall, though, I do not believe that Colorado is a market that most virtual wholesalers should jump into early on. I think you're going to get kind of beat up a little bit. You're not going to get a ton of properties under contract very quickly. Dispositions would be easier for you and you could probably make a healthy spread on it. But unless you have some sort of connection to the Colorado market a known end buyer boots on the ground, something like that personally, I'd say ground, something like that.

Speaker 1:

Personally, I'd say avoid Colorado for right now. Focus more on those easier states to acquire deals in. Yeah, you're going to make a little bit less on the assignment fee, but it's more about getting checks under your bed, checks under your bed, checks in your bank account. How about that you get those moral victories and not necessarily get demoralized because you're in a more difficult market to acquire it. So for those of you that are currently doing deals in old, colorful Colorado, let me know did you agree or disagree with my take? I'm actually curious to hear from some of the local Colorado wholesalers Do you feel the same way about your state or do you actually feel different because you're there local and you're doing deals? Let me know in the comments. Show me some love like today's video, and we'll see you guys tomorrow.