The Titanium Vault hosted by RJ Bates III

The Math Isn't MATHING! | The King Closer Reacts

• RJ Bates III • Episode 611

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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
​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
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Speaker 1:

What's up everyone? Welcome back to the King Closer Reacts. I am the King Closer, rj Bates the third, and today I'm going to be responding to a bunch of yahoos talking shit about wholesale. Let's see if they know what they're talking about. Let's get into the first video don't buy this house.

Speaker 2:

instead, buy this house because if you buy a nice, new, shiny house like this that's already been developed and refurbished, it's going to cost you, in this area, about £1 million. It's a liability. Instead, if you buy a house like this, you can buy a rundown house in the same street for just half a million pounds For £250,000, you can make it look like this one, meaning you've made £250,000 in profit. Now what you can do is you can remortgage the property and you can pull out all of your 750,000 pounds that you initially put in completely tax-free, leaving you with a free house like this. Because you bought a house like this, you are welcome.

Speaker 1:

I love the guy's accent. Now, I guess this is like the BRRRR strategy in the UK. Right, it's not free, though, like, let's watch out our like loose language here. You got into it with no money, right, but you did take out a 750,000 pound loan on it, right? You still got to repay it. Most of us over here in the States we refer to this as the BRRRR strategy. Right, buy, rehab, rent, refinance. Yeah, that's it Got there. I just got burr. But anyways, a repeat, I guess there's another R at the end. We added that one Repeat. But that's what he's talking about. Again, this is for investors that are trying to build this portfolio. That's what most of us do. Of course, the tax-free incentive there. That's when, ideally, you would be in for like 700,000 pounds and refi for 750,000. So now you're liquid 50,000. Where you have that for operating expense, you actually make a little bit of money. That would be the ideal scenario, but good breakdown from the UK.

Speaker 3:

So I've talked to a lot of guys since I moved to canada that do it in toronto, because toronto is huge right, it's like the biggest city in canada. A lot of wholesalers in canada that do it and the regulations, like all the stuff. It's not really there, they don't really have it. Uh, they're not really aware of it that much in canada, like the, at least the regulation. So yeah, you can do it in Canada, it's pretty same kind of same thing except the data part, like batch leads, right and like right.

Speaker 3:

They don't really have data like we do here in the States. So a lot of people are doing they're doing like flyers and they just flyer like everything. Instead of like a list, they'll just do like the whole, a whole area, or paper, paper, click paper lead. Yeah.

Speaker 1:

So inside of TU we actually have quite a few Canadian members. Some of them want to come down to the States to wholesale because the price points are lower and there's more volume opportunity. But we do have some heavy hitters, specifically in Toronto, what Nathan's talking about. He's absolutely right. Some of those guys also want to come down to the States with some of those larger assignment fees that they're making in Canada and then they want to buy American real estate. Quite a few of them are actually coming in and what they're doing is they're not stopping what they're doing in Canada, they're now just adding the States in and they're doing a lot of hotels and ovations here, Claude being one of them. Claude's brother, Luke, actually just joined us a couple of months ago. They're doing significant volume in Canada.

Speaker 1:

So I do think it's a viable option. I have to say it is now on my bucket list that I do want to wholesale a deal in Canada. I've actually thought about doing like, hey, could I do a deal in each province? I don't know, that might be tough. That one up in the north, that one might be tough. We might have to write that one off. But it is interesting to see there are some subtle little nuances that, at least from my vague understanding that I see the difference between Canadian wholesaling and American wholesaling, purchasing Canadian wholesaling and American wholesaling, One like when you assign your rights off to the end buyer, the end buyer does take over, like the communication, the TC work, the renegotiations, all of that, like the communication of the seller. That's very different than how we do here. But outside of that what I've seen is is just there's an opportunity to make larger assignment fees on Canadian real estate, specifically near Toronto where the price points are super high, just less volume.

Speaker 5:

If someone to make a million dollars in real estate what would you recommend for them to do?

Speaker 4:

Do not immediately go into real estate investing. I think a lot of people think that that's where you make money. That's also where you can lose a significant amount of money. Brokerage is a no risk investment. Your time is what you're investing into creating relationships for people that are going to pay you to help them do a real estate transaction that you have nothing to do with. You don't have to buy the glue or the nuts or the bolts. There's no capital investment, and that's what's always set me free, because the risk is your time, but the reward can be endless.

Speaker 1:

Okay, first thing I want to say is if you're buying glue when you're rehabbing a house, something went wrong. But I do agree with his take on. The first thing you shouldn't do if you're deciding to get into real estate is real estate investing, flipping houses, becoming a landlord. There is an extreme risk. Liability comes along with that. You need to build up the skill sets and the understanding one how to underwrite deals. Do you have the connections, the contractors? Do you know how to manage a rehab on a property? If you're a landlord, do you know how to manage tenants? Do you have the liquid capital to be able to handle if something goes wrong with one of your properties? So I do agree with that aspect. Now, on the side where he says brokerage is the way to go, of course he's going to say that he's a broker and I don't think there's anything wrong with doing that. I think that's definitely a choice.

Speaker 1:

But if your intention is to get into real estate investing, I would suggest getting into wholesaling because it would teach you more of the skill sets that you need to inevitably become a flipper or landlord. You're going to understand how to source your own deals, going direct to seller. You're going to understand how to comp and underwrite. You're going to obtain a ton of knowledge by the conversations that you're going to have with other real estate investors, whereas if you go into the brokerage route, very rarely are you going to try to work with the real estate investors or distressed properties, because your commission is based off the price point.

Speaker 1:

So say, it's a $500,000 neighborhood, that's full market value. You could make somewhere in the range of $15,000 for listing that house or representing a buyer. But if you are working with a real estate investor or you're working with a distressed seller, they're going to need to sell that for $250,000. What does that do? Well, that means your commission went in half. So very rarely do broker or real estate agents and brokers get into this wanting to work with distressed properties, and that's why there's a massive opportunity for wholesalers. So for me, wholesaling would be the route if you inevitably want to be a real estate investor. But I get his point and I understand his position because he is a real estate broker.

Speaker 5:

The future of wholesaling real estate. Now, there are some fears that certain states will make wholesaling illegal or something like that, but I can tell you that as long as it's still legal to buy and sell properties in any form, wholesaling will be alive and well. Because as long as people can do that, as long as you can still buy something at a lower price than you can sell to somebody else, wholesaling will always be alive and well, guys. So there may be a little change in how you do stuff, but by and large, it's always going to exist as long as people are alive and people own property. So keep at it, guys.

Speaker 1:

Keep building your business, and if you want more strategies on becoming a six-figure wholesale, I don't want to hear that, but I agree with his take Wholesaling is not going to go anywhere. I think regulations will increase over the course of time and I think it's going to just continue going down the path that is transparency, disclosure, maybe us mandating that we put things on our marketing when we are dispoing deals, getting sellers to sign disclosures up front when we're getting contracts signed. I think that's going to become the commonplace and honestly, I kind of welcome it. Right, the competition that I always say they suck so bad. It's going to eventually come back on them that they have built their business on a foundation of lies and a lack of transparency.

Speaker 1:

So for me I have said, ultimately what's going to happen is it's going with more regulations. There will be less wholesalers. There will be fear around wholesaling. People that are taught how to lie and manipulate and that's what their foundation of their business is built around will leave the industry, which is what they're trying to accomplish with these regulations. And inevitably what will happen is is due to the lack of competition. It will impact the sellers. Price points will go down because now you won't hear the well, I've already talked to 10 of you guys. I'm getting so many calls. The motivation will increase, sellers will become more desperate and price points will inevitably go down for us as wholesalers. So for those of us that stick around long term, I foresee several years down the road. We will be making even more money.

Speaker 6:

If you buy a property for $100,000 and you put $20,000 down and you wholesale that the next day or 30 days later for $120,000, you've just made 20% in, let's say, 30 days. Do you know what that rate of return is? That rate of return is 240%, because if that money was working for you for the year, it would be 12 times 20%. That's right. That's the returns that you can get in real estate. When you start to understand it.

Speaker 1:

I know we've talked about this before on Getting Closer Reacts, but that brother right there just did a wholesale and real estate Steiner math. That's what that was. Listen, the math is probably correct. But here's my issue If you're wholesaling, you're not buying it for 100,000.

Speaker 1:

You ain't putting anything down. You're not spending any money. That's what wholesaling is. The money that we have to spend is in our systems and our overhead and our lead generation, not on the properties, because then I'm flipping it, I'm wholetailing it, I'm novating it or something. It ain't wholesaling. Wholesaling is I got it under contract for $100,000. I go to Jordan and say you want to buy this for $120,000? He says yeah, he goes and buys it for $120,000. Title company wires me $20,000. Go ahead and do your Steiner math on that. What's my rate of return? I got $20,000 and I put nothing down. That's infinity Boom baby. That's our episode of the King Closer Reacts. Let me know what you thought about my math there. Then I guess we probably have a little bit expenses. I'll say it's a thousand dollars. Let me know what that percent of return is. It's a hell of a lot better than whatever he said. Show me some love like today's video. We'll see you guys tomorrow.