The Titanium Vault hosted by RJ Bates III

Deal By Deal Case Studies: Wholesaling Real Estate

• RJ Bates III • Episode 610

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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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Speaker 1:

A couple of things about these deals. First and foremost, I do want to remind you before I get into it, because we do have five deals that we're going to be bringing down today we do deals in all 50 states. Four of the five are going to be in the state of Texas, which is kind of funny because I always talk about how Texas is our best market. This despite the fact that we do marketing, we buy leads in all 50 States. I hands down, I feel like Texas is like the best state to wholesale in. Uh, still, to this day, as much as I love other locations and love being nationwide, it just it always ends up being the best place. We've got Kyle from Connecticut. Audrey from Houston, texas, what's up? Audrey Zach in Southern Cal. We got Hawkinsville, georgia. I'm taking all the deals. I'm not taking all of them, just taking my fair share. Happy Tuesday, kathina. What's going on? And then we got Mr Taylor Ford. Got a bunch of it from Houston, a bunch of TU people. All right, so let's get into Reno, nevada, and leave that one out. All right, so let's break down our first deal. This is going to be in hondo, texas. I will say this deal is going to have its own separate video coming out pretty soon. Cassie's going to be recording this um more on the transaction coordination of what took place here and what we had to do to get it across the finish line, but I wanted to share it in here. In regards to how I'm going to share some of the KPIs and where the leads are coming from and whatnot, this was actually from property leads, so this is one of those $30 nationwide exclusive leads, and the reason why I love the $30 nationwide leads is because it gives us opportunities for deals like this. Hondo Texas is a tertiary market to San Antonio Texas and so if you were to, you know, go and buy leads. Hondo Texas is probably not going to be a location that you're going to be seeking, unless you are like a San Antonio wholesaler. But for me, nationwide virtual wholesaler, when I get a lead like this, this is essentially the best type of lead that I'm looking for. It's great if we happen to get a San Antonio or an Austin or Dallas Of course, those happen time and time but Hondo is the exact kind of lead that I'm looking for, right outside of that major metro area, probably an area where most wholesalers are sleeping on it and it sneaks in for the cheapest price that we could possibly get for $30 a lead right and so this comes in.

Speaker 1:

This seller had extreme motivation, right Financial issues. Had a sick child that needed healthcare and they wanted to use the proceeds from this sale for the child's healthcare, and so it was also super time sensitive. And so these are one of those situations where, when wholesalers come in, it's like we're looking at it from the perspective of of course, we're running a business, we need to be profitable on our deals, but we also need to be making sure that we take care of the seller's situation and we're truly listening to what that seller needs. And so in this situation it was hey, we've got to make sure we're getting enough money to the seller where the sale of the property actually satisfies their needs, but also it gets done in a timely enough fashion. So in this situation here it was a little bit nerve wracking where it's hey, we're not doing a ton of deals in Hondo Texas, it's not like we've got the go-to Hondo Texas buyer, of course. It's not like we've got the go-to Pondo Texas buyer. Of course we're believing that we can dip into the San Antonio market, of course, but still there's uncertainty. There's uncertainty from the fact that we know the property is physically distressed. We don't know that until we walk it. We have our processes, but we are telling the seller this is what we can do to you with transparency, right.

Speaker 1:

So we got the property under contract for $65,000 and our asking price was 75,000. Now again, remember, this was time sensitive. So we immediately went to the known buyers that we knew in that area and our initial offer that we received on this property during dispositions was for 40,000. So significantly below what our asking price was and even below what we had it on our contract for. So it wasn't really a viable option for us and I wanted to bring that up because a lot of times we don't really talk about that.

Speaker 1:

On the content, where it can be demoralizing when you're talking to an extremely motivated seller, you go through the acquisitions phase, you go through the recon phase and during the recon phase you get the pictures and the videos back and you feel somewhat confident about the deal itself and then that initial buyer walkthrough comes back, kind of kicks you in the teeth and says, hey, you're off by $35,000. Now all of a sudden you kind of start questioning whether or not you're going to be able to solve this seller's problem or not. And is you're going to be able to solve this seller's problem or not, and is this deal going to be able to go through? What I will say is, through the conversation that we had with the end buyer there, it became more apparent as to why their offer was where it was, and it was because, hey, hondo's not really one of their main markets. They were being conservative. There were some things in regards to the property that they were kind of accounting for on the rehab, that we weren't necessarily accounting for ourselves, and so we understood where they were coming in.

Speaker 1:

But the conversation that we had to have was we can't go back to the seller for this amount of price reduction. We have to go out and we just have to continue doing our job and working to dispo this at a fair price for ourselves and for the seller. And so we did that and we ended up actually selling it for a full ASCII price at $75,000. So I share this to let you guys know, especially those of you that are newer to wholesaling like don't get demoralized with that initial offer from an end buyer, have that heart-to-heart conversation with them, get an understanding as to why that came in. But continue doing your job and build those relationships and eventually you could find that end buyer. That will see what you're seeing on the deal and because of that we were able to sign this and make a $10,000 assignment and get the deal done in a timely fashion to where the seller got taken care of.

Speaker 1:

So breaking this deal down again. This is a $30 lead from property leads that we assigned for $10,000. But the key points here is like on these $30 leads from Property Leads, leadzolo, speed of Leads, coupon Club, whatever it is one of the issues that I've heard people have is oh, it's so rural and they're difficult to dispo. That's true to a certain extent, but also there's diamonds in the rough where it's not a San Antonio Texas. It's that tertiary market, that secondary market right outside of it that can really make a difference. And, as you're going to see as I go down through this list of closed deals, that's going to be a common theme. We're not really doing them in the major metro areas, we're doing them right outside. That's what you should be focusing and looking for inside of those leads that come across. All right, let's move on to the next one. You guys have heard me talk about it, but I wanted to share it on air, since we're breaking down the deals that just most recently closed. This is Tiki Island, texas. I posted a video of this.

Speaker 1:

I was on speedily training, teaching you guys here's how you close deals. Here's how you thought sellers, you guys were on there and you challenged me hey, rj, instead of talking about it, why don't you do it? And you know I love doing that. So I went on there and I bought the lead. Now a couple of things. This was from speedily. It was off of the marketplace. This it had a c rating. Okay, so a c lead. Um, and I I've shared this multiple times yuri I, I think, was actually scared that the lead that I decided to showcase was c.

Speaker 1:

The reason why I bought it was because of the motivation, the location and then also the condition of the property. Okay, I knew it needed some work. I knew the location and then also the condition of the property. Okay, I knew it needed some work. I knew the location had enough end buyers and the motivation was it was an inherited property, and so that's the reason why I purchased it. Now the downsides to this lead after I purchased it was it was higher price points and long days on market not necessarily what we're looking for when we get a lead, and I was actually blown away at how long the days on market were in Tiki Island, texas. But what I did notice was is a lot of the much longer days on market were the million plus price point losses, and the seller's asking price for this property was $500,000. Now he inherited this property and he inherited it. He also has a brother and so the brother was actually living in the property. So in order for them to sell this property, they were going to have to use the proceeds from this property to help him purchase his new property, right? So there was also a timing issue here as well, as anytime it's an inherited property, there's multiple decision makers about price points. Now they come to that agreement of $500,000.

Speaker 1:

Now, if you see me on this call, it was complete transparency. I can wholesale this property. This is the benefit and the good thing about this was the seller, who was not living in the property. That brother was actually a sub-2 student, so he's in our world. He kind of understood the language that I was using in regards to wholesaling and whatnot, and so it made it a little bit easier. But I think he actually respected the fact that we were coming in with complete transparency about wholesaling the property and also about the fact that, hey, we can agree to $500,000 today, but obviously it's going to be contingent upon the buyer feedback and also the fact that when I talked about assigning the deal, I told them exactly how much I wanted to make on the property. I told them that I wanted to make $10,000 to $15,000. Those were my intentions on this transaction and so I believe he felt like that was a fair price, very similar to listing it on the retail market, and because of that he chose to sign the contract with us.

Speaker 1:

Now there was a little bit back and forth in regards to some of the language in the contract, but then once we went out there we did our recon. It was exactly what the seller told us. It was going to look like it didn't need a ton of rehab, just a little bit of cleanup from their mother that lived there and then obviously the sibling. It did need some cleaning to it, but realistically a very clean property, and so we signed it for $500,000. And then, on the disposition side of things, one of our end buyers actually came to us and said I can bring a buyer for $530,000 if we'll do a joint venture on this. We were only asking $515,000. Remember that's what I told the seller I want to make somewhere between $10,000 and $15,000. So we actually assigned it for $530,000. And then our assignment fee on it was $15,000. So we got our price. The JV partner came to us and the thing about that is I love the communication and the transparency there in regards to not necessarily daisy chaining the deal. But hey, I can bring a buyer to the table for more. I added my fee on top. Let's sign a JV agreement. We did that. He presented it to his buyer and we were able to get the deal closed and funded. Funny enough, literally directly before this live, I heard Cassie on the phone with the title company working out some final little details in regards to one of the brother who's buying the property, making sure he gets his wire and gets his proceeds. So that's literally still in the process of just last finishing touches, but it is close and funded. We've already received our money on that one.

Speaker 1:

The next one would be the one that is not in Texas, this was West Memphis, arkansas. Okay, this is another one from property leads and this was another one that was a $30 nationwide exclusive lead. So what's funny about this is if you've ever been to Memphis West Memphis, arkansas is just literally on the other side of of the river and the state line right the river is the state line right there before Tennessee, and Memphis is obviously a large market, a good wholesale market. West Memphis not necessarily known at least in my opinion, not known for being great in wholesale. It's lower price points, but we were able to get this one under contract at a pretty decent price because of the seller's motivation.

Speaker 1:

This was a pre-foreclosure situation, again another one that was super time sensitive. Once we actually spoke to the seller spoke to the seller the seller only had a month before the foreclosure date. So again, this is one of those scenarios where tertiary secondary market right outside of a major metro, where time sensitive and it's a little bit unknown whether or not we can move the deal. But we were transparent with the seller about our intentions. The seller owed $72,000 and only needed $75,000. So just a little bit of money to move on with their life. So we contracted at $75,000. We were able to assign this for $85,000. So that's a $10,000 assignment and we were able to move this for eighty five thousand. So it's a ten thousand dollar assignment and we were able to move very, very quickly on this.

Speaker 1:

Looking at the notes, it looked like my dispositions team uh placed anywhere between 35 to 40 calls. Um, looked like 35 calls on on the first day, another 10 calls on the second day for dispositions. That was able to get us multiple walkthroughs before we were able to dispo it for our full asking price of $10,000. Now what I bring up there is the $10,000 assignment. I always talk about the average assignment fee of being $15,000. That does not mean that every deal you should be aiming to make that much money, as you can see here the first deal in Hondo, texas, we made $10,000. The second one, we made $15,000. And the third one, we made $10,000.

Speaker 1:

In those scenarios where we made $10,000 on Hondo, texas, and this west memphis, arkansas, what was the seller's motivation? Right, the first one was needs the proceeds. Time is of the essence because of a sick child, this one foreclosure less than a month. We as the wholesaler were not trying to be greedy and we weren't trying to make a set number like oh, oh, we don't do deals for less than $15,000. It was, hey, we're going to make this to where these are good deals for our end buyers that can move quickly. Now, looking back at them, do I believe that we could have possibly made $15,000 on each one of those deals? Absolutely. But I would prefer that we protect the seller and we don't stigmatize the deal by asking too much and we make it a better deal for our end buyers by setting a lower assignment fee and being more realistic about moving these in the timeframe in which they need to be done, and so for that I'm proud of our team on both of those deals getting them done in the timeframe that was necessary for those highly motivated sellers, all right.

Speaker 1:

The fourth deal was Marshall, texas. This lead came from lead Zolo. The seller's motivation was financial issues, there was a death in the family and there was multiple liens, okay, so this checked multiple boxes in regards to motivation and this is what the only one out of the four that actually had renegotiation involved. So the original contract price was $65,000. We sit in buyer went out there after we got pictures, bought the property and actually made us an offer of, I believe it was like 57,000, something along those lines, 57, 55,000, somewhere along those lines. I don't have that written down. And when we went back to the seller simultaneous to us renegotiating the price and explaining, they actually came back and said 52,000. And then they came back and said $47,000. And the seller then agreed to the $50,000 price reduction, which kind of put us in a weird spot where you guys have heard me talk about this. I really don't like renegotiating prices unless you know where your end buyer is going to be. But in this scenario it was $57,000, then $52,000, and then it went all the way down to 47 and we got the seller to agree to 50 000 and and then they signed that, and so it kind of put us in a bind where it was like well, we did that under the the pretense that we had a buyer, now we don't, and so we had to continue doing dispositions for a little bit longer.

Speaker 1:

We we ended up getting an end buyer from titanium university. He kind of joined the group, then introduced himself as like hey, I am an end buyer inside of the state of Texas, and we sold it to him for $55,000. Now what's funny about the dispositions on this deal. It actually did not take place during my team's efforts of dispositions. It actually came through titanium universities office hours, which we do two to three times a week, where it's run by the members me and Cassie we're not really a part of it. Danny kind of runs it, but it's it's really about the members just getting together and working together.

Speaker 1:

And during the call, danny was talking about this deal and he and the the end buyer on this kind of raised his hand and was talking about it was like well, if the ARV is this and the repairs are this, then I would buy that deal at 55,000. And so, sure enough, danny went to him and said well, that that is the ARV and these are the repairs and I'll sell it to you for 55,000. So it was kind of funny because the TU member really wasn't necessarily actively looking to buy the deal, but he was like those are the numbers, that's a good deal, I'll buy it. And that's what ended up leading to the deal getting disbursed. So kind of a very unique way for a deal to get disbursed. This deal also was from a lead from Lead Zolo going all the way back to 2022. So 2022 was the initial time that titanium investments spoke to the seller in 2023, during the 50, 50, 50, I spoke to this seller, sent them a contract. They ghosted me because the death in the family they had to deal with, the death in the family. Then more liens got put on the property and because of that they came back to me via email saying, would you still sell or would you still be interested in buying my property? And so because of that, we were able to get the deal done for a $5,000 assignment, all right.

Speaker 1:

The last one is going to be Belton, texas, another secondary tertiary market right. This is down there by Killeen and Temple. It's basically in between Waco and Austin. It's just kind of an exit off of 35. If you've ever been inside of the state of texas, i-35 it runs from dallas, fort worth, all the way down to waco, to austin, to san antonio. That's the highway you have to take to get there. Belton is an exit off of there. So this actually came from a future tu member who is now a tu member. So this was a joint venture deal. This is one of the few. That was a GB Elderly seller wanted it to be a private sale, didn't want it to be out there in the public Needed to walk away with $330,000.

Speaker 1:

We did that and then the dispositions no investor base, investor lift or anything like that went directly to a known buyer. One call hey, this is the deal, what do you want to do? And because of that we were able to get the deal done. This is the video I talked about that we got the deal done in 13 minutes. The total assignment fee on this was $50,000. There were two JV people that got paid out. The end buyer was actually bringing the actual end buyer, private money lender to it, so he wanted a $10,000 fee. The TU member that brought it brought $15,000, and we made $25,000 on that. The TU member that brought it brought $15,000 and we made $25,000 on that.

Speaker 1:

That deal got a little stressful there at the end, right when you're dealing with an elderly seller that wanted a private sale, there was a need for an extension on it because the buyer didn't have the fund. The private money lender needed some more time to get the funds and because of that it caused a lot of transaction coordination, communication, emails, phone calls. A lot of time got taken up, and I bring that up because I think sometimes when people are getting into wholesaling, they have this picture of like hey, it's going to be as easy as I have leads and I get it on a contract and then I assign it and I'm kind of like hands off. And a lot of times in this deal our money was actually made during that TC time. Like that's where all the effort was and really it was just proper communication, setting expectations, making sure no one got upset and tried to kill the deal or anything like that, and just really managing emotions. There was a lot of that throughout that deal just because of the time, delays, lack of understanding what was taking place, and so that's really where we kind of earned our money right there. But luckily that deal made it through.

Speaker 1:

So out of the five deals we had two property leads, one speed to lead, one lead Zolo and a JV deal. The average assignment fee across the five deals was $21,000. And our average gross on each one of those deals, after JV splits and whatnot, was $13,500, which is pretty much on par for what we average. We're right around that $14,000 number on average assignment fee. But when you look at how much we actually spent on these leads, you're talking about $30 for the property lead. So that's $60. The speed of lead I think we ended up. I think we did spend like $300 because that was on a live training right and so I went in and I bought off the marketplace and then the lead Zolo was a hundred dollars back in the day and then the JV was was zero. So all together we spent for these five deals um $460.

Speaker 1:

For the leads to then make what is that? 50,000, $70,000, somewhere around there. Of course, this is not accounting for the cost of the softwares that we use, the leads that don't make it to the closing table, the dead leads and whatnot. It just gives you an idea of what we were spending for these individual deals. And so today I was thinking about it when.

Speaker 1:

How did I want to kind of share the message here. One, we're not relying on one lead source, right, it's property leads. Speed to lead, lead, zolo, jv network, right, our connections. In fact the JV deal ended up being the most profitable deal out of all of them. And then understanding the seller's motivation and their timeline and then setting your prices based off of that. So of course we always talk about where to end buyers buy and determining that price point. But we also took into consideration the seller's needs in regards to the price points that we were setting on these deals. I think that's just as important there. And then also when it came to dispositions right, not always hanging our head, becoming demoralized because the price points weren't necessarily or the initial offers weren't what we were needing. Continue down the path, trust the process, talk to more end buyers and you'll be able to move more deals, and then also be willing to work with other people inside of your network. Some of these deals we probably could have moved ourselves if we were willing to put in more time, but sometimes that could keep you from doing volume.

Speaker 1:

If you're trying to pinch every penny out of every single deal. I have no problem when someone comes to me and says hey, I can help you move this deal, I can make it a profitable deal for you, and it's somewhere around your your original asking price. In fact, one of them, the $15,000 deal we didn't even lose any of our money, right? He just added his fee on top, and so because of that, we were able to get those deals done in a timely manner. And then, last but certainly not least, the communication inside the transaction coordination. I cannot express to you how vitally important that is to being successful as a wholesaler making sure that you're staying on top of these deals and managing the emotions that are involved in this. These are highly motivated sellers. They've got a lot going on in their life. I use the word extreme motivation on the Hondo Texas deal and that happens and obviously it's what we're seeking making sure that you're managing that through your deals.