Quit Daisy Chaining Deals!

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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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Chapters

• 0:00 Calling Out Daisy Chaining
• 0:36 Defining Daisy Chains Vs JVs
• 1:10 How Markups Stigmatize Deals
• 3:03 Profit, Trust, And End Buyer Math
• 4:16 Snaking Deals And Reassignment Risks
• 5:27 Relationships Over One-Off Checks
• 6:02 Transparency And Industry Reputation
• 7:09 The Right Way To JV And Win-Win-Win
• 8:20 Final Plea And Audience Callouts

Transcript

SPEAKER_00: 0:12

Sometimes I come on here and I make videos, and it feels like what I'm about to say is just common sense, and then I have to come to grips with the fact that our industry as a whole really lacks common sense many times. But guys, quit daisy chaining deals. There's a difference between doing a joint venture and daisy chaining. And I guess I need to explain the difference. Daisy chaining is when you have zero equitable interest in a deal and try to dispo it by tacking on your fee to an end buyer. Now, I don't know if someone is teaching this. I really don't follow many people's content. I don't know if this has become a new thing, but it's hurting our industry as a whole. And here's the reason why. If I take a deal and I list this property for assignment on investor lift or investor base or inside of a Facebook group or wherever I'm trying to market this deal for dispositions, and I say I have a property for assignment for$200,000, and you see this and you take that, and then you present this deal to in buyers for$210,000 or$220,000. What now happens is that probably is no longer a profitable deal or at the level of which the profit needs to be for that in buyer. What also happens is that in buyer now sees this property come across their desk for$210,000. And then inevitably, if we're doing a solid job of marketing this on the disposition side, they see it for$200,000. It's multiple prices, and this stigmatizes the deal because now the in buyer doesn't know who's direct to seller, and they're not trusting anybody. Why? Because our industry as a whole has a poor reputation, and so this will stigmatize the property for the rightful wholesaler that actually is direct to seller or has a signed JV agreement with the wholesaler who is direct to seller. Now, the correct way to do this is if a wholesaler has a property under contract for$190,000 and they are going to set the price for$200,000 for assignment, then you sign a JV agreement and then you market it for$200,000, and you are going to split however you agree with that. If it's 50-50, 60-40, 70-30, whatever that percentage split is, that's between you and the contract holder. That then is split accordingly when the property is sold. Now, these daisy chainers that are coming along and stigmatizing properties, quite frankly, I am curious if this is ever even successful. Are you making money doing this? Because if I have a property that is under contract for 190 and I'm looking to assign it for 200,000, and then you come to me and say, I have an in buyer for 210,000. I'm now questioning how did you even find an end buyer? What where did you take my deal? Why would I want to do business with you this way? And is 210,000 a profitable deal for the end buyer? Probably not. That's ten thousand dollars being taken away from that in buyer. And my objective with each and every deal is to make it profitable for that in buyer so I can sell them a hundred properties, not one. Now, what's even worse is when they go and they try to daisy chain these deals, find an end buyer, and then snake the deal by going directly to the seller. That's even worse. Or a daisy chainer pretending to be an in buyer by saying, I want to purchase this property and then turn around and assigning it to someone else before closing. Now, our assignment agreement has it to where you cannot assign that contract again. However, Daisy Chainers are creative, they'll come up with ways to double close on properties, they'll find ways to go ahead and reassign it and hope that the title company doesn't read the language in the assignment. And I'm not saying this hasn't happened to us. In fact, it has just recently, a couple of months ago, we had someone that we assigned a deal and they turned around and they reassigned it to somebody else for a lot more money. The deal did make it to the closing table, but it was an uncomfortable experience for us. And quite frankly, when that stuff happens, it leaves us in a position where we don't want to do business with that person anymore. And so, is one transaction worth losing a potential long-term relationship? I don't think it is. I don't know of one transaction out there that is worth losing a long-term relationship, especially with someone like us that's been in the industry for a decade and has done the the volume of deals that we've done. So, as a whole, I regularly talk about as an industry. Listen, we've got to get to the point where we're transparent with sellers, we stop lying and manipulating and playing these games. But on this side, on the dispositions where daisy chaining is either being taught or promoted as a strategy, this has got to end because this is one messing with sellers' lives with an asset that they've trusted to the original wholesaler, and now someone else that's come along who either doesn't have the resources or the skill sets to go connect with a motivated seller to get their own properties under contract now is stigmatizing properties, potentially running away in buyers, or even just flat out lying to the wholesaler, which in turn now is lying to the seller about what their role is in this transaction to daisy chain it to another in buyer. It's ridiculous. And there's no place for it inside of our industry. So quit daisy chaining deals. It's never been a viable business strategy. There is no place for it inside of this industry, and all you're going to do is inevitably create more opportunity for regulations to come down on us as a whole, as an industry. Just do the business the way that it's meant to be done, which is find a motivated seller, contract that for a discount from where an end buyer would buy, provide value to your in buyer by giving them a property that's discounted to where they can be profitable. And it's a win-win-win situation. It's a win for the seller, it's a win for the in buyer, and you win as a wholesaler. You capitalizing on someone else's hard work is not running a business. Now, if you want to be a joint venture partner and provide value by doing dispositions to someone that's done acquisitions, build the relationship with those people doing acquisitions and provide value by bringing in buyers for a percentage and a split of the assignment fee. That is how you correctly joint venture, not by daisy chaining. So if daisy chaining is something that you're doing inside of your business, please, for the love of our industry, stop. That is not the correct way to wholesale. And whoever taught you how to do that, stop following them. That is not the correct way to do this business. It never has been, and it never will be. For those of you that are either one a victim of daisy chaining, let me know in the comments. And if you disagree, I would love to hear your take on where daisy chaining has a place inside of our industry. Because, quite frankly, I don't believe it belongs anywhere inside of our industry. Regardless, show me some love, like today's video. We'll see you guys tomorrow.