Sins Of Wholesaling | Filing Memorandums On EVERY Contract

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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
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​125 contracts in 50 days (all live on YouTube)
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Transcript

What Memorandums Are For

How Bad Actors Misuse Them

The Fallout: Sellers And Trust

When Filing Is Justified

Reputation, Longevity, And A Challenge

Closing CTA And Community Question

SPEAKER_00 0:04

If your business model requires holding a seller or another investor hostage, you're not protecting your deal, you're exposing your character. And today we're talking about one of the ugliest practices in wholesaling real estate. What's up, guys? RJ Bates III here. Welcome back to The Sins of Wholesaling, the series where we call out the behaviors that make this industry harder than it needs to be. It's not the market, it's not sellers, it's not competition, the unethical decisions wholesalers justify and then act shocked when the backlash comes. And today's sin: filing memorandums on every contract signed. Let's start with reality, because this gets twisted constantly. A memorandum of contract exists to protect legitimate contractual interest, prevent bad actors, both buyers and sellers, from bypassing a valid contract, and it protects your earned interest in a contract that you intend to perform on. It is not a leverage weapon, a revenge tool, a payday trap, or a placeholder for incompetence. A memorandum is a shield, not a shakedown. Here's what we see far too often. A wholesaler gets a contract signed and immediately files a memorandum. Doesn't have buyers, doesn't understand the deal, and can't assign the contract. And instead of doing the right thing, they leave the memorandum filed. Not to protect a deal, but to force the next investor or wholesaler to pay them to release it. That's not business. That's extortion with paperwork. Let's be honest about the motivation behind this. This behavior comes from fear and entitlement. Fear that they can't close another deal, they overpromised or they miscalculated. Entitlement that says, I got here first, so I deserve something. No, you deserve to get paid when you create value, not when you block progress. This practice poisons everything it touches. First, it hurts sellers. Sellers don't understand what a memorandum is, they just know that their deal is now stalled and they feel trapped, they feel lied to, and in return, they blame wholesalers, not the individual. Second, it destroys investor trust. Investors talk, title companies talk, attorneys talk. Once you're known for this behavior, you don't get opportunities, you get avoided. And third, it invites regulations on wholesaling real estate. This is how laws get written, not because investors exist, but because bad actors give lawmakers ammo. Here's the part nobody wants to say out loud. If you need to file a memorandum on every contract you get, you don't trust your ability to close. You're using paperwork to compensate for a lack of skill. Real operators don't need to threaten deals into submission. They execute. Let's be very clear: memorandums are not evil. They are appropriate when you have a legitimate buyer path. You are actively performing on the contract, and the seller is threatening to not perform on a contract when you are prepared to close. They are not appropriate as a default tactic. Blanket filing memorandums is lazy, reckless, and short-sighted. You cannot scale coercion. You cannot build long-term vendor relationships, repeat investor partnerships, national operations when your reputation is built on blocking deals instead of closing them. Eventually, title companies stop working with you, investors stop calling, sellers start lowering up, and you'll say the industry turned on you. It didn't. Release them immediately when a deal dies, and communicate communicate clearly with all parties. Act like adults, not opportunists. They don't look for a way to get paid when they failed. They fix the failure. Finally, I have seen a consistent theme over the past decade. Wholesalers who consistently leverage memorandum of contracts for profit, their businesses don't last long. The majority I've come across are gone. They are either flipping burgers, day trading Tesla, or complaining about how politicians screwed the economy. Now, friendly reminder: this series, The Sins of Wholesaling, is not for people chasing shortcuts, people who justify hostage tactics, people who think contracts replace ethics. This episode is for operators, long-term wholesalers, investors who want respect and longevity. And if this episode made you defensive, well, that's the mirror doing its job. This was The Sins of Wholesaling Episode 5, Filing Memorandums for No Reason. Make sure you like the video, subscribe to the channel, and comment below. Have you ever dealt with a bad memorandum situation? Because this industry doesn't need more leverage, it needs more leadership. I'll see you guys on the next episode.