Cornhusker Catch-22: Get Licensed Or Get Lost

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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.

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Closed deals in all 50 states
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Chapters

• 0:03 Setting The Nebraska Stage
• 1:01 Market Reality: Population And Metros
• 2:35 Early Struggles And Seller Pushback
• 3:35 LB 892: What The Law Requires
• 5:23 Compliance Playbook With Agents
• 7:31 Is Nebraska Still Worth Targeting?
• 10:36 Opportunity For Local Wholesalers
• 11:35 Final Take And Audience Ask

Transcript

SPEAKER_00: 0:03

Welcome back to wholesale and around the world, the Nebraska edition. Today we're going to be giving my take on whether or not you should virtually wholesale in the Cornhusker state. And like I always do, I want to start off with the population rank. Listen, Nebraska comes in at somewhere between the 37th or 38th most populated state, depending upon what year the census was given. Meaning it's one of the least populated states out there. And just like more often than not, with the lack of population, it kind of makes it a more difficult state to virtually wholesale in. But Nebraska does offer us two kind of larger metro areas that are pretty close in proximity. And so because of that, Lincoln and Omaha have always been pretty good cities to virtually wholesale in. Now, the issue and what the majority of today's topic in regards to virtually wholesaling Nebraska is going to be is the regulations that have come down inside Nebraska. And it's kind of really spoiled whatever good vibes we had about Nebraska, right? Not a ton of population, 37, 38th, depending upon the year. And then the majority of the state is very, very rural. A lot of farmland, a lot of just vacant land out there. You know, you have some other cities that we've done deals in. We've gone to the west side, where North Platte, um, we've gone out to Scottsbluff Alliance. We've done deals in other places in Nebraska, but but the vast majority of the deals that we did were Lincoln and Omaha. Funny enough, when I was doing my research here, we also did, you know, Omaha is right on the the border of Nebraska and Iowa. We did a ton of deals back in 2021 and 2022 in Council Bluffs, Iowa, which is right on the other side of the state line. So essentially Omaha. Now, in buyers in Omaha and Lincoln, they exist. Hedge funds used to buy there, and so it was a good virtual market for us. Now, I will say we didn't start virtually wholesaling in Nebraska until 2020. And the first time that I ever got the taste of Nebraska, I remember just getting my teeth kicked in. And we were doing pulling the list on batch leads, skip tracy, and doing the SMS reach out. And I remember, you know, calling them the red, red, angry women of Nebraska. Now, part of that is I'm a Rob Zombie fan, and he's got the red women of Mars. That's a song that he has. And then the you know, we've got uh the red colors for the University of Nebraska. So it just kind of they were just so angry, and I could just see their red faces just screaming at me, How did you get my contact information? Why would you think I want to sell my property? And so at first, I really despised Nebraska. I I thought it was like one of the worst states out there, and it was like the sellers are not motivated, they're upset, they're angry. But then 2021, 2022, 2023, we did pretty decent considering the population rank. But then came the regulations, and that really just kind of spoiled all the fun that we were gonna have in Nebraska. So let's go over these regulations. The code that got enacted was LB 892 in 2022. Okay. This the law requires wholesalers to hold a real estate license to publicly market equitable interest in contracts. It also establishes clear agency roles, procedural requirements, and disclosure obligations to ensure wholesalers operate transparently. What's the impact? Wholesalers must either become licensed or stop marketing deals publicly, and this law helps protect consumers from misleading practices and encourages wholesalers to act in a professional, ethical manner. The penalties are regulatory actions by the Nebraska Real Estate Commission, fines, and possible revocation of licenses. Now, this is according to easy REA closings. This is their War on Wholesaling Report, which you can get at war on wholesaling.com. It would seem the solution is that you can have your wholesale deal listed by an agent under the new law. An agent assisting a wholesaler would be a seller's agent for the wholesaler. Along with this, closing on the property and then listing it would be an easy solution. So let me explain how this has happened to us here at Titanium Investments. We when this originally went out, we got a property under contract, we went on to investor lift and we blasted it out to our buyers. And we immediately got served a cease and desist letter from the Nebraska Real Estate Commission. So we reached out to the Nebraska Real Estate Commission and we said, okay, listen, we understand that you have passed this law, but what do you want us as wholesalers to do if we're not licensed? How do we proceed? And so they said, listen, it's really simple. You just go find a licensed Nebraska real estate agent. And on your marketing packet, you need the point of contact to be that licensed agent. You need their phone number, the phone number listed on the marketing packet to be that Nebraska real estate agent's phone number. And you also clearly need to put on there their license number. So we can track. So anytime this is sent to us, the Nebraska Real Estate Commission can verify that that is an active licensed real estate agent in Nebraska that is marketing that deal for assignment. Okay. So we asked them point blank. So if we go, then we find a Nebraska real estate agent to allow us to use their likeness, their phone number, their license. They'll fill those phone calls. At that point in time, we are covered and we are abiding by the law. They said yes. So we've done that. We find a Nebraska real estate agent, they go out. All we have to do at that point in time is work out whatever compensation with that real estate agent that's fair. So we've done it from the point of a flat fee, like, hey, we'll pay you a couple hundred bucks in order to use your likeness, your license number, your phone number, or we've done an actual JV split where we've said, hey, this is how much of the percentage of the deal that we'll give you. And that abides by the law and the in the regulation inside Nebraska. Now, that being said, this wasn't a high volume market for us to begin with. I won't necessarily avoid leads in Nebraska now, but it does kind of say, well, we're already dealing with a low-populated state. Hedge funds really slowed down buying in that area. Really, Council Bluffs Iowa was more the area where the hedge funds were wanting to buy than Omaha or Lincoln to begin with. And it wasn't really a high assignment area for us, anyways, when we did do deals. And so it's really lowered our volume. Now, what I've said about every single regulation out there, it's going to cause a void in the marketplace. So if I were a local Nebraska wholesaler, I would absolutely be capitalizing on the fact that many virtual wholesalers like myself have essentially left the marketplace. We're not necessarily wanting to generate leads in that market anymore. And so, because of that, I'm assuming the local wholesalers who can just easily become licensed are now having a fantastic time. They probably have a much easier lead generation. It's easier to get deals and there's less competition. It's a void in the marketplace. And I feel like that's what every regulation is going to do. Now, that being said, like I said, I will go back and I will get leads there and we will go through the process if necessary. But we are not specifically targeting Nebraska. That's one of the benefits of being nationwide virtual wholesaler. So, should a virtual wholesaler target Nebraska? Probably not. It wasn't that great to begin with. And now you have to deal with finding that licensed agent and worry about dealing with all of the rules that come along with that, making sure that you don't do anything that treads in the gray that could get you in trouble. It probably isn't worth it. There's easier states to go out there, even easier states that have regulations. Like Ohio has a new regulation that's coming down that's much easier to get by with just disclosing that you're a wholesaler to the seller up front. This right here to me was a silly, silly regulation. I don't like this one because all it's wanting you to do is be a licensed real estate agent. That's not the solution, that's not really what we're trying to get away from in the wholesaling industry with these regulations. It's more about the transparency and allowing the sellers to know what is taking place. This doesn't let the seller know anything. All this is doing is benefiting licensed real estate agents in Nebraska. That's it. So it didn't have the seller's best interest at heart here, it had the licensed real estate agents at heart. That's what I have a problem with. Nebraska's regulation, but quite frankly, Nebraska, I didn't like it that much to begin with. So for us, we've moved on. Will we do a deal in Nebraska? Sure, but we're not going to seek it out. For those of you that are wanting to know, hey, should I seek Nebraska out? No. It's going to be one of the worst states out there. This is one of the worst regulations because all it is doing is serving licensed real estate agents. And like I've said time and time again, those people are not doing the actions that wholesalers are doing. Otherwise, we would have never been able to find a place in this industry that they already dominated what we do. So they don't. Local Nebraska wholesalers, I think you have a massive opportunity in front of you to really capitalize on this because many of us that were virtual, that were doing deals in Nebraska, we're kind of looking elsewhere. Looking at the the greener pastures that exist and the other 45 or so states that don't have these ridiculous types of regulations. Those of you that are currently doing deals in Nebraska, let me know. Do you agree or do you disagree on my take? Let me know in the comments. Regardless, show me some love. Unlike Nebraska shows us some love. Like today's video. We'll see you guys tomorrow.