The Titanium Vault hosted by RJ Bates III

Virtual Wholesaling Explained Step by Step for Beginners

• RJ Bates III • Episode 613

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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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With over 2,000 Videos, this is the #1 channel on YouTube for all things Virtual Wholesaling. SUBSCRIBE NOW!    https://www.youtube.com/@RJBatesIII

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RESOURCES FOR YOU:

If you want my team and I to walk you through how to build or scale your virtual wholesaling business from A to Z, click here to learn more about Titanium University: https://www.titaniumu.com

(FREE) If you want to learn how to close deals just like me, The King Closer, then download the free King Closer Formula PDF: https://www.kingclosersformula.com/close

(FREE) Join our exclusive FB group community for real estate investors and wholesalers: https://www.facebook.com/groups/titaniumvault/

(FREE) Click here to grab our Titanium fleet free PDF & training: Our battle tested strategies and tools that we actually use… and are proven to work: https://www.kingclosersformula.com/fleet

Grab the King Closer Blueprint: My Step by Step Sales Process for closing over 2,000 deals (Only $37): https://www.kingclosersformula.com/kcblueprint

Grab Titanium Profits: Our exact system we use to comp and underwrite deals in only 4 minutes. (Only $99) https://www.kingclosersformula.com/titaniumprofits

Want to know what the best markets to wholesale in are? Grab my breakdown of all 50 states here: https://www.titaniumu.com/markets

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Speaker 1:

What's up everybody. Welcome to Virtual Wholesaling from A to Z. I'm going to be breaking down the complete process today so you understand exactly what virtual wholesaling is and can decide if that is what you want to do inside of your business. Our team has done over 2,000 deals in all 50 states over the past decade using this exact process. Today's goal is to give you a complete overview. Now we're not going to be stopping at any destinations, we're just going to be giving you the roadmap of what it is. Now, before we dive in, let me explain our H hedgehog concept. We are a nationwide virtual wholesaler. That's it. Anything that doesn't fit inside of that scope gets a no. This eliminates all of the shiny objects that exist in the real estate investing world and it's easy for us to say no to flips, novations, buying property subject to and things like that. All right, let's get into it.

Speaker 1:

Step one define virtual wholesaling and why there's money to be made Virtual wholesaling. What makes this virtual is that you never leave your office, you never leave your house. You do everything virtually from your desk and on the phone. We're not going to physically visit properties and we're not going to want the properties ourselves. Every property that we contract. We never go see them, we never lay foot in those properties whatsoever. In the wholesaling side, wholesaling is when you contract the property and then you're selling your equitable interest in that contract for a fee. You're not selling the property itself. So we talk to a seller, we contract the property for $100,000, and then we turn around and we will assign our rights to the buyer for a fee. So I say, hey, for $110,000, you can have my equitable interest. They buy the property for $100,000 and I get the $10,000 difference. The other way you could do this is called a double close, but we've pretty much moved away from double closes. Almost all of our deals are assignments only.

Speaker 1:

Step two do you need an entity to virtual wholesale? The answer is no, you don't need an entity. You could absolutely contract a property in your personal name and assign your rights to an end buyer and receive your wire or check directly to your personal name. However, I will say there is a benefit to creating an entity and having that protection. If, for whatever reason, you were to get sued or there was some sort of liability, that comes back on you. You're protected and they can't come after your personal assets. There's also a certain level of financial commitment that you're making to yourself. It's almost a mental commitment that you're saying, hey, I'm going to take this serious, I'm going to be a business, I'm creating entity to get this started. Now, if you don't have the couple hundred dollars to create the entity, you're probably going to be running into some issues when it comes to virtual wholesaling, because it does require operating capital. This is not the free way to do real estate investing. It does require money to do lead generation and buy systems.

Speaker 1:

Step three what is a motivated seller? The first thing we need to do is locate a motivated seller that's willing to sell their property for a discount. If you're brand new, you're like well, what does that mean? Because isn't every seller motivated to sell their property? Of course, but that doesn't necessarily mean that they're motivated to sell it for a discount.

Speaker 1:

There are two core fundamental reasons why a seller is motivated to sell sell it for a discount. There are two core fundamental reasons why a seller is motivated to sell their property for a discount. Number one is financial distress. There's financial distress factors saying, hey, I need to quickly and efficiently sell this property and so I'm willing to sell it at a discount because, financially, I need to sell this piece of real estate. That's pre-foreclosure tax, delinquency liens, bankruptcy judgment, loss of job, health issues, inherited a property that has a mortgage on it and they can't afford it. The next thing is physical distress. This is where the property has not been remodeled in decades. Or maybe there's a structural issue or system issues where AC doesn't work, roof doesn't work, foundation problems, maybe it has tenants inside and it's a tenant-occupied property and the tenants devastated and destroyed the property while living in it. We've even had animals cats destroyed a property with pee and poop, vultures overtook a property, beehives created inside of a wall and destroyed the entryway. Those are the two ways that really lead to a seller becoming motivated to sell for a discount. The reason why motivation is so important is because that's where you're going to want to understand why the seller is wanting to sell this piece of real estate for a discount. If they're not motivated, then we're probably not their best solution. That's what realtors exist for.

Speaker 1:

Step four lead generation. Lead generation is the marketing that you're going to do as a wholesaler to turn the lights on to these motivated sellers and let them know that your company exists, contrary to what we believe the vast majority of people don't know what a wholesaler is or how to contact a real estate investor. When they go to sell their house, they're thinking about contacting a realtor and going to Zillow and maybe listing it themselves for sell-by-owner. They don't know that we exist, so we have to be great at marketing. Here's how we do that. One thing you can do is you can pull lists on places like Batch Leads, propstream, listsource, and you can pull from motivating factors like pre-foreclosure, tax, delinquency, vacancy, bankruptcies, expired listings, and you can skip trace it and that means you're getting their phone number and then call them. You can also send direct mail to that data, send them a postcard or letter saying, hey, I buy houses.

Speaker 1:

Now, the thing that I love that exists today is buying inbound leads. Now you can run your own campaigns on social media Facebook ads, instagram ads, youtube, google, pay-per-click and they search need to sell my house fast, fort Worth, texas. Your ad pops up, it takes them to a landing page and they fill out the form and it comes to you and you call. But then there are companies out there like Speed to Lead, leadzolo Property Leads that will generate these leads for you and sell you the lead that's called paper lead. Instead of running your own campaigns, you just swipe your card. Property Leads charges like $30 for nationwide exclusive leads. Boom, it comes to you. You call them 10 seconds after they fill out the form. You have to have this. Without leads, you can't really do anything else. This is the foundation for your virtual wholesaling business.

Speaker 1:

Now the heartbeat is step five acquisitions. Specifically using the closers formula, you generate the lead. The motivated seller comes to you and says I want to sell my house. Now you've got to be able to acquire the deal. You've got to get great at being able to have human-to-human interaction on the phone to solve their problem by buying their real estate.

Speaker 1:

Now here's the steps. You call the seller. Hey, mr Seller, this is RJ Bates. Are you still looking to sell 123 Main Street? Yes, that's step one. Verify that they want to sell. Step two Awesome. How much are you looking to get for it? Ask them their asking price. How much do they want for it? They're the seller, we're the buyer. Ask them how much they want. Everywhere else in the world, when you go buy something, there's a price tag. It's the same thing here.

Speaker 1:

Step three open-ended questions. Tell me a little bit about what you got going on. This opens it up to let them talk about the most important thing to them. You didn't ask them about the condition, you didn't ask about the timeline and you didn't ask about occupancy. You just said tell me what you got going on. This allows them to open up and tell you their whole story. From there you're going to continue to ask open-ended questions while you're doing step four, which is comping and underwriting and analyzing the deal. And then step five you close the deal and analyzing the deal. And then step five you close the deal. You get them to sign the contract and agree to a price. That is the closer's formula skeleton. You have to treat that lead like gold. When that lead comes in, you get on the phone and you solve that seller's problem.

Speaker 1:

Now step six inside the closer's formula, we talked about comping and underwriting the deal. We refer to this as the web wherein buyers buy. When you're on the phone with the seller, they give you the address and the first thing you're going to do is drop it into Google Street View and look around the neighborhood and ask yourself if I were to live at this house, is there any reason why I would not want to own this property Could be across from a gas station or a busy road near a commercial airport jail something that would diminish the value based on location. And once you've identified there's nothing wrong with the location, you're going to drop that address into your comping software. And yes, you do need comping software. We do not comp on Zillow, we don't comp on Redfin. You need to invest in your business. The comping softwares that we use are PropStream and Privy.

Speaker 1:

Now, when you're comping, the first layer is understanding what neighborhood is this in Identify the price point. If the seller says they want $100,000, what I want to see is is there a $0 to $50,000 neighborhood or a $50 to $100,000 neighborhood, a $100,000 to $200,000 neighborhood? Where are the vast majority of properties selling in this neighborhood? If I'm on the phone with a seller and they say they want $100,000, I really hope this is a $200,000 neighborhood. Otherwise the price is probably going to be pretty significantly off from us buying this as a wholesale deal. Now I'm going to be diving into the comps and trying to put a rough after repair value number. The after repair value is how much the house will be worth once it's fixed up.

Speaker 1:

I'm looking for what is the square footage, bedroom count, bathroom count, year built and lot size. Those are the five things I pay attention to. I start with square footage. My house is 1,500 square feet. Do I have other properties that are 1,500 square foot comps? Do I have other properties that are 1,500 square foot comps? My house is a three bed, two bath. Are those 1,500 foot houses three bed, two baths as well? What is my year built? 1979. Do I have a 1979 build? What's the lot square footage? Is it 10,000 square feet? Is it 25,000 square feet? Do I have a similar size lot? These do not have to be exact, but they need to be close in the range. I always like to compare apples to apples. I want to find another house exactly like this Same size, same bedroom, bath, same year built and same lot size.

Speaker 1:

Once I've identified that, I look at the price in which they've sold. I look at the lowest first. Why did this sell for so low? Is it a tear down? Is it in horrible shape or is it in pretty decent shape? And next I go to the highest comp and compare the difference. Is this completely remodeled? Is everything brand new? Is it beautiful? Is it flipped? Is that why it sold for so much. This is what I'm really trying to identify and I go through the comps and I look at the pictures.

Speaker 1:

Once I've identified my after repair value, comping is done. But now we have to move on to underwriting. We're going to take that after repair value and plug it into our profit calculator, which automatically calculates holding costs and closing costs. What's the only other number? We need Repairs.

Speaker 1:

Now how do we do that? Sitting at our desk here in Fort Worth, texas, come up with an after repair value in Phoenix, texas, or Phoenix, texas, phoenix, arizona, and then come up with the repairs. Well, we do that by asking good questions. I don't want you to ask when was the last time the roof was replaced, because if they say two years ago, it doesn't really give us the answer. Not if it's in Dallas, texas, or Phoenix, arizona, where you can have hailstorms and windstorms and tornadoes in the past two years. Instead, ask questions like if we were to fix up the property, what do you know needs to be done? You can fix up the property and sell it for maximum value. What do you know needs to be done? The sellers will open up and start thinking about everything that needs to be done to the property and this is how you find out more about the condition.

Speaker 1:

What we're doing here is determining where would an end buyer buy this property. We're going to say the property could be worth $200,000 fixed. It's going to calculate holding and closing costs and then we're going to say it's 1,500 square feet, needs cosmetic updates, so it needs $40,000 to $45,000 in work. From there we probably need to be somewhere in the $85,000 to $90,000 range. That's going to include our wholesale fee, their profit, their holding costs, their closing costs, the rehab and what they can sell it for.

Speaker 1:

All right, let's move on to step seven, which is the contract. Now we have a simple two-page contract that we use across the country. The contract is super easy to fill out. It's like seven or eight fill-in-the-blanks to fill out. It's like seven or eight fill in the blanks Seller, buyer, address, legal description, price, title, company, what state you're doing the deal in and the date You're going to fill that out. Put it in e-signature software like DocuSign, dropbox, sign, pandadoc, whatever you want to use, and you send it to the seller via email to get them to sign it. If you're on the phone with the seller and they're available to read that contract with you on the phone. You absolutely do that. You want to walk them through the contract and make sure you can answer any questions they have about the contract right then and there.

Speaker 1:

Now, step eight is opening escrow with title. The moment that they sign the contract, you move on to opening escrow with title. Whether that's a title company or a closing attorney, different states have different rules. Once you get that signed contract, you're going to open up escrow with the title company or closing attorney by emailing it over and asking them to pull a title commitment on the property, and this is where you're going to find out if there's any liens on the property mortgages, judgments, encumbrances, anything that can hinder this deal from closing and anything that needs to be paid off from the closing proceeds. It's also going to verify that the person you're talking to is the actual seller that can sell you the property. You always go through title and you're always going to want your end buyers to get title insurance. When you open title, you make your earnest money deposit as well. Our earnest money deposit normally is somewhere in the range of $10 to $100 per contract across the country. Of course, that could be more, depending upon the price point. This earnest money is our consideration, our financial consideration to making this a legally binding contract and our good faith payment down. It is refundable per our contract through the terms.

Speaker 1:

Step nine recon on the property. Now that we have a signed contract from a motivated seller, we have to do recon on the property. We have to put together our marketing package for our end buyers so we can turn the lights on for them and show them why they would want to be the end buyer for this property. Now, how are we going to do this? I'm here in Fort Worth. I never go see the property and I'm buying a property in Phoenix, arizona. How am I going to do that? Well, number one, the easiest solution is ask the seller. How am I going to do that? Well, number one, the easiest solution is ask the seller. They will send you pictures of the property and we have a checklist that we use. That we send the seller and we say we need a picture of every exterior wall and we need a picture of every interior room and walk through the rooms. This lets us know what's going on with the property. They don't have to be professional photos. Nowadays our phone cameras are better than most cameras that you can buy anyways.

Speaker 1:

If the seller cannot do it, the next step is you go to your best known buyers in the area and give them first right of refusal to go out and view the property. If they want it, they can have it. If they don't want it, at least give me the pictures. And the next thing you do is hire a company like Investor Boots. Investor Boots will go out and they'll get contracts signed for you. They'll get things notarized for you, but they will also take pictures. The other solution is you could hire a handyman. Handymen love to do this and they're a hell of a lot cheaper than photographers. And the reason why I love handymen is because you'll say hey, can you find the things that are wrong with the property, things that would need to be fixed up, if you were to go out and be the one that fixed this property up and they'll take those pictures for you, whereas a photographer normally wants to avoid the ugly stuff.

Speaker 1:

But as a wholesaler, we need to know everything about the property. We need to show that to our end buyers. Now that we have pictures, we move on to step 10, which is the marketing package for our end buyers. We get the pictures back and now we put together our marketing package for those buyers. We'll put all of our pictures together, write up a description as to why this is a good property for them to purchase as a flip or rental, and break down all of the numbers for them. And then we're going to move into dispositions, which is step 11. Dispositions is where you're going to do the marketing of your equitable interest in this contract to your end buyers. To assign your rights to that contract to them, your end buyers to assign your rights to that contract to them. You're basically going to be saying, hey, for $10,000, $15,000, $20,000, whatever your assignment fee is, you can have my equitable interest in this property. And here's what's going on with it. Here's the pictures, here's all the description.

Speaker 1:

This position gets forgotten about and, with the amount of technology that we have nowadays, acquisitions has gotten so easy. Your ability to comp and underwrite across the country has gotten so easy that dispositions is now where it's at. If you can disavow properties and you know how to talk to buyers, you know how to build relationships with them, you can do it anywhere in the country. This is the key to virtual wholesaling in 2025. Country this is the key to virtual wholesaling in 2025. There's tools out there like InvestorLift, dealspeed, investorbase your ability to do marketing to your end buyers and have that conversation. You need to have a formula on how to talk to them, just like we have a formula on how to talk to motivated sellers.

Speaker 1:

Step 12 is assignment of contract. Once you've identified your buyer and they say, okay, you've got it under contract for $100,000. I'm selling it for $110,000. So I'm trying to make a $10,000 assignment fee, they say I'll take it. You have to have your assignment of contract. This is a separate form from your contract and it was saying you're assigning it to that end buyer for this fee, your equitable interest in that property. Once that is signed, you send that off to the title company and then they are required to make whatever earnest money deposit that you put on that assignment of contract. For us, unless it's a super low-end property or super high-end property, it's almost always $5,000 non-refundable earnest money. Now step 13 is where everyone's eyes start to glaze over and that's with transaction coordination. Transaction coordination really starts the moment that you get the signed contract from the seller and that's when we send it off to the title company, making sure that your earnest money is deposited, making sure you get a title commitment back and making sure that anything that shows up on the title commitment gets cleared prior to closing.

Speaker 1:

The title company is not going to make sure the title gets cleared. You're going to have to make sure that those actions get taken. There's going to be times where you're going to have to be the one calling the seller, getting them to maybe do an affidavit of airship or something like that. The title company will tell you what is needed, but you have to make sure that you are prioritizing your deal over everybody else's. One of the best ways to do this and I recommend this for everyone is don't be a transaction coordinator in your business. There are transaction coordinators that do this for a living and they are experts. Outsort this, delegate it For us. We use easy REI closings. They're going to make sure that your deal is handled with care, because that is their job. That is how you get paid and making sure that your deal gets closed.

Speaker 1:

Step 14 is closing. If it's an assignment, nothing really happens for you. You just send off your wiring instructions and say send me a check. We get everything wired at this point and closing is super simple. You need to make sure that your buyer and your seller get scheduled. You need to make sure that the title company is good and that they have your wiring instructions and make sure that they understand how to get you your money. Make sure that you communicate with them throughout the day hey, is the buyer showing up, is the seller scheduled? And once that is done, you get your money. It's over.

Speaker 1:

The final step step 15, is follow up with your buyer and your seller. Once it's over, pick up that phone, congratulate the buyer and seller and say hey, congratulations, you got rid of that deal or you bought that deal. It was beautiful working with you. You want to shoot me a video and give me a testimonial. Take care of your buyers and sellers and they'll take care of you, and that's wholesaling from a to z. We just do that over and over again.

Speaker 1:

Now, what can you outsource and what must you do? I'll be honest with you. We've gotten to the point where the vast majority of things that I just told you throughout the process, somebody else is doing. Do I create an entity? No. Do I generate leads? No, I buy those from other people. Speed to lead, lead, solo property leads, acquiring deals. We do that internally but I've got a team that sits right here in this office and they acquire deals using the closers formula all day, every day. They comp and they underwrite and they get the contract signed. We send it off to the title company. We're not a title company. Title company takes care of that Recon. We make the phone calls and get the recon done. Someone else does the recon for us Dispo. Well, we've got the systems and we send the assignment of contract. Someone else does the TC and someone else does the closing, the assignment of contract. Someone else does the TC and someone else does the closing.

Speaker 1:

The vast majority of what we are doing when I talk about being a virtual wholesaler, gets narrowed down to acquisitions and dispositions because you can pretty much outsource everything else to someone else. The core of what you have to have is you have to have leads and then you've got to be great at closing them. You got to get great at assigning them and then you outsource the TC, your ability to pick up the phone and have a conversation with another human being about why you could buy their house and then to your end buyer on why they should be the end buyer for that property. If you can do that, you can create your own reality with virtual wholesaling. That's it, just those 15 steps. It's as simple as that. That is virtual wholesaling from A to Z.