California vs Other States Which is BEST for Virtual Wholesaling

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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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Chapters

• 0:00 California’s Paradox For Virtual Wholesalers
• 2:35 Los Angeles: Saturation And Pricing Puzzles
• 5:16 San Diego And The Bay: High Fees, Heavy Competition
• 7:05 Central Valley And NorCal: Where Deals Happen
• 10:05 Current Rules, Future Regulations, Final Take

Transcript

SPEAKER_00: 0:07

Welcome back to wholesaling around the world, the California edition. And listen, California is one of the strangest states for virtually wholesaling. Because if you've been following this series for a while, you know there's a direct correlation to the size of the population to where I rank it for virtually wholesaling. And of course, California is the most populated state in the United States with a population of over 39 million people. There are so many people that live in California that its population actually outranks number two and number three, Texas and Florida population if you combine them. So by all definitions, when it comes to population, California should be the best state for virtually wholesaling. However, I don't feel that way. I don't feel that way for various different reasons. That being said, there are places where I feel like there are opportunities to virtually wholesale in California. I don't believe it's one of those states that you should ignore, but I just think that there is high price points. There are locations that are really difficult to get solid lead flow from no matter what, cold calling, list pulling, texting, PPL, PPC. It's just one of those oddball locations throughout the United States. And so for me, I actually rank California like way down near the bottom just because of the low volume that we've had inside the state. Now that being said, I've always said anything west of Texas is going to be a great place. If you do get something under contract, it's going to have a pretty juicy assignment fee. I do feel that way about California. I mean, it in majority of the locations, if you do get a property there, you're going to make a pretty penny on it. Now, let me break down the individual because California is so large, it's not like we could just point to a couple couple different locations. There's quite a bit that you have to kind of unpack in regards to the state when it comes to virtually wholesaling. Starting off with the greater Los Angeles metro area, right? And we're including, I'm throwing in there Bakersfield, I'm going Long Beach, Palm Springs, Santa Barbara, everywhere around there. We're just going to say that's the greater Los Angeles area. And I know for the people that live in California, y'all probably don't include that. But that's how I kind of look at it when we get leads, because buyers from the LA area will go there. Now, we get a ton of titanium university members inside of Los Angeles, which makes sense just due to the population. But when it comes to virtually wholesaling, almost all of the leads that I've ever gotten there, they just don't really ever work out. The motivation is kind of there sometimes, but to sell it for an extreme enough discount, I think there's so many local buyers and other wholesalers to compete with that it's one of the areas that it is so saturated that you're just always going to have competition. So from the virtual aspect, you're always going to be competing against other offers. And by nature, virtual wholesalers, at least the ones that are successful, are normally more conservative on their numbers than the people that can go to belly-to-belly appointments actually want the properties. And so, because of that, despite the opportunities that do exist there, uh, we we have a very low amount of volume deals around the Los Angeles area. Also, it is a very awkward location to comp and underwrite just because the price points are so high for properties that just quite frankly don't feel like they should be worth what they actually are. Right? If you compare it against the rest of the United States, if you take those houses in Los Angeles and you put them somewhere else, they might even be like 10% of what they're worth inside of LA. And so it just looks very odd. And it just doesn't really ever check the boxes for us as a virtual wholesaler. I don't ever go into Speed the Leads marketplace and choose to pick a lead in Los Angeles. Now, there's times where the motivation stands out, the property is physically distressed, and I see it's near Los Angeles or maybe in Los Angeles and we'll choose it, but it always comes with kind of that here's another LA lead that we're supposed to buy, but it doesn't work out for whatever reason. If you go further south down to San Diego, I know quite a few people that have done really well for themselves in San Diego. Again, for me, San Diego is just not a market that I ever anticipate getting deals in, but what a fantastic place. If you do get a deal, you can make quite a bit of money there. The average assignment fee is going to be much higher than the rest of the United States if you buy correctly. At least it should be. Um, so there is opportunity there, but again, very, very low volume for us. And then going up north to the Bay Area, San Francisco, San Jose. Um, we'll just go ahead and throw Sacramento in there as well. Uh I feel like this is the location in California where you could probably make the most amount of money. Uh, again, gonna be a very difficult location for you to close the deal just based off of the competition that's going to exist inside the Bay Area. It's gonna be very unique at times, comping and underwriting, right? You're gonna have to deal with some of the row houses, similar to what happens in Philadelphia and Baltimore. But the opportunity just based off the price points is extremely strong in that area. Sacramento, not quite as much as San Francisco, probably a little bit lower price point, a little bit more common to the rest of the United States, uh, but got to be very competitive there. But probably more of an opportunity for a virtual wholesaler to get a deal in Sacramento than San Francisco. Then I want to talk about the Central Valley area where Fresno is, um, Tulary. That is an opportunity for you to get deals much lower price points than the rest of the state of California, and an opportunity for you to even find rental properties, whereas Los Angeles, San Francisco, right? The cash flow kind of just doesn't really work out. Fresno kind of gives you a little bit of an opportunity to underwrite your deals a little bit differently. Now, I said at the beginning, I wanted to talk about some of the places that I feel like there's opportunity for virtual wholesalers. And for me, I feel like it's the northern part of the state. Um, Reading, uh, Chico, Stockton, some of these areas up, I guess Stockton is actually south of Sacramento, but that northern part of the state, right below Oregon, is where we have actually done the majority of our volume. And part of the reason why is because I think by nature, that's lower population, there's less competition. So when those leads exist, there's not as many people buying it, there's not as people, many people going out and doing belly-to-belly appointments with these sellers. And so, because of that, we as a virtual wholesaler have been able to contract more deals there. And just due to the fact that it is inside of California, it's almost always possible for us to find an in-buyer for each and every deal that we contract. So, from a virtual wholesaling standpoint, I actually feel like the best place for you to get leads is in that northern part of the state on the acquisition side. It might take you a little bit longer on the dispo side, but there are buyers that are buying all up in that area. And so personally, if I'm going to seek out buying a deal in California, a lead in California, or if I were put into a competition and said you have to close a deal in California, I'm gonna say, give me those leads in the northern part of the states. Yes, it's gonna take a little bit longer in dispo, maybe a little bit less of an assignment fee, but I'm gonna have more of an opportunity to close it in comparison to LA, Sacramento, and San Diego. Now, one of the things that I actually kind of find odd is that California does not have regulations against wholesaling yet. Now, based off of my research, what we are seeing is there is possible possibilities of regulations coming down in 2026. Kind of the early rumors are they're gonna take the route of you have to be a licensed realtor of some sort to wholesale. But as of right now, it's just the typical hey, camp broker without real estate license. You're signing the contract, you're not selling the property, and disclose, be transparent, nothing out of the norm. So from a regulation standpoint, California, shocking as it is, as liberal as a state as it is, that there are no regulations yet. But I do foresee that coming down in the future down the pipeline. Regardless, from a virtual wholesaler standpoint across the entire United States, even if California were to come with the worst regulations and kind of eliminate our opportunities, similar to like in Oregon or in Nebraska or South Carolina, that are really difficult to wholesale in nowadays, it really wouldn't make that big of a difference because we do such a low volume in the state. Now, I know I'm talking to the state that has the largest population out there, and I'm sure there's a ton of wholesalers that are like, RJ's just dead wrong. I completely disagree, and that's fine. I am speaking from a virtual wholesaling standpoint, someone that is in an office in Fort Worth, Texas, and getting leads in all 50 states. And so, from that perspective, if you were to ask me, do I want a lead in Ohio or Michigan or California, I'm always going to take those Ohio and Michigan leads over the California. That's my perspective because of where I'm coming from. However, if you are in the state of California and you want to be a local wholesaler, I think there is a great opportunity for you to do that, to own that market share and probably go in and do more belly-to-belly appointments, build that rapport with the seller and get those larger assignment fees. But what I feel, and just by talking to you guys that have come to us from California, you're also frustrated. It's tough in these markets, and that's why you're seeking to go to easier places to acquire deals and then make your money. So let me know in the comments do you agree or do you disagree on my standpoint on virtually wholesaling in California? I love to see the debate. Regardless, show me some love, like today's video, and we'll see you guys tomorrow.