Wholesaling Real Estate SUCKS?! The King Closer Reacts

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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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Transcript

Opening And Format

SPEAKER_00 0:05

What's going on, everybody? Welcome to the King Closer Reacts. I am the King Closer RJ Base the third, and this is the series where I'm gonna watch a bunch of videos and tell you how much I disagree with them. Let's get into the first one.

SPEAKER_05 0:17

The biggest mistake I see newbie wholesalers making is just making hundreds of calls a day by themselves, not knowing what they're doing at all, just asking people if they're interested in selling their property, having no strategy in mind, and eventually wearing out and then quitting wholesale real estate. I recommend you don't do this.

Surplus Funds Skepticism

SPEAKER_00 0:42

I mean, yes, but also no. I mean, you have to pick the phone up, and you have to ask the homeowners if they're interested in selling. Even if it's an inbound lead, just like we do through PPL. The first question we ask is, are you interested in selling that property? So, in this reel, what I'm curious is, what does he want you to do? Because it says systems are needed. Okay, well, I'm new, I have to call homeowners. Calling hundreds? That's awesome. Because I know a ton of wholesalers that call like five and then they call it a day. They're like, man, I grind it away today. So calling a hundred, that's fantastic. I'm sure that there's more to that video. Maybe there's a second reel that he expects us to go watch, or maybe he's promoting something. But listen, you got to tell us what okay, what are the the wholesalers supposed to do if we're not just picking the phone up and calling sellers every day? If you're calling 100 homeowners every day, yeah, it's gonna be a grind. It's gonna feel like you're not getting anywhere. You're brand new. It's gonna take time for you to develop skill sets and truly understand who's motivated to sell for a discount and who isn't.

SPEAKER_04 2:01

If you wholesale or flip houses, here's the deal you've probably been throwing in the trash.

SPEAKER_05 2:06

I wholesale, I flip, I know my numbers, but I've never heard of surplus funds.

SPEAKER_04 2:12

That's the point. Most pros don't. That's why they toss foreclosure deals in the trash when they could actually pay out. It's not your fault. Nobody teaches this, but once you see it, you can unseal it. Surplus funds happen when a home sells at auction for more than what's owed. The extra cash belongs to the homeowner, and with the right JV partner, it can be profit for you too. If you want to see how it works, check out our group on Twitter.

Quality Over Quantity Buyers

SPEAKER_00 2:40

And they coming out with school groups and communities for everything. That's crazy. Surplus funds on a foreclosure. Now, I don't know the legalities of this, but that money is owed to the homeowner. It feels a little bit weird that we would try to get a piece of that. Just personally. That feels a little bit odd. And I'm all about making money. I'm all American capitalist, but that feels a little bit odd. And this is kind of like going all the way back to the days when we we made sub two uh as big as it's become because you know Pace is has come out and created finance, and then it went from doing traditional sub twos to the Morby method. And I I love Pace, he's he's a great guy, great human being, but there are things that probably should not be pushed to the masses. And this right here feels like if that's surplus funds are pushed to the masses, it sure feels like there will be a regulation that comes down on that real fast. And probably rightfully so. I'm not gonna touch that with a 10-foot pole. I'm I'm just gonna stick to wholesaling.

SPEAKER_02 4:01

If you don't want like a chaotic dispo environment, I would go the quality over quantity route. Some of the wholesales you're gonna connect with on Facebook, they could be like greedy wholesalers, some of the wholesalers that aren't really ethical, some that don't even have contracts, some daisy chainers. The people that you're connected with right now, like you know that they're legit. It was a referral, so it was a warm lead, basically. And for the most part, you work well with them and they operate a certain way, right? And it it will fit into your business model. You could keep going that route, especially if you have some VIP wholesalers. But again, if you wanted more, the other way to do more is through social media.

Ethics And Industry Reputation

SPEAKER_00 4:30

If you don't want, like so I'm not exactly sure what he's trying to say there, but this is the the issue. I mean, if you go back to earlier this week, several of my videos have been in regards to the ethics of wholesaling, right? Are we burning our own industry down? Tuesday's live was about a daisy chaining wholesaler pretending to be a buyer and then not depositing earnest money and then reassigning a non-assignable assignment. Crazy things. And then we have other people in the industry that are like, hey, there are trash wholesalers out there, and there are. This is the reputation that we are building for ourselves. At some point in time, we as the wholesaling community have to rally around and say, enough is enough. Let's change the way that we are viewed. I'm not gonna keep talking, I'm not gonna stop talking about it. I'm gonna keep talking about it until actual changes are made and where we start seeing a difference in how the wholesaling industry transacts deals and we get rid of daisy chaining, lying, manipulating sellers, trying to steal and snake deals from other wholesalers. It's crazy the things that go on. And frankly, I'm tired of it. I've been watching it for a decade. It's time for us to be better.

Contract Fallout Rates Explained

SPEAKER_03 5:57

We just did a study across a bunch of wholesalers, flippers, et cetera, asking them what like a bunch of different metrics about their business. One of the things that we asked was your contract fallout rate. And we also gathered information about how many of their deals are different types and stuff. What's interesting is across the board, the average contract fallout rate, as reported by them, which I have faith in this number to, if anything, be optimistic, is 28%.

SPEAKER_01 6:18

But fallout was 28%.

SPEAKER_03 6:20

Yeah, but for wholesalers, it was like 40%. And for people who are buying the properties, it was closer to like 10 or 15%. So it gives you an idea. Like when I see that number and I see it varying based on that, um, it tells me that there's something about wholesale that causes it to have more fallout. Well, what's that increasing? Well, obviously, you're buying it yourself, you just remove one of those variables, right? So that almost tells us like where you could get if you didn't have that variable of not being able to find buyers, right? It shows you that that's like a big part of it.

“Wholesaling Sucks” Rebuttal

SPEAKER_00 6:45

I mean, yeah, I mean, I get his point, but to be honest with you, with it only it sounds like there's a 12% difference. He was talking about 40% for wholesalers, 28% for for flippers. That's pretty decent. I mean, considering the fact that when we contract deals, we then have to go find a flipper or landlord, that end buyer who is willing to purchase that property. That's a pretty decent spread. There's always going to be a difference there. Wholesalers' contract fallouts are always going to be higher than flippers. But there are times where terminations happen on deals that have nothing to do with us as the wholesaler. And that's obvious in the fact that flippers have contract fallouts. Also, let's point out that flippers are canceling some of their contracts. Meaning, when we go to wholesale properties to flippers, by nature, there's going to be a certain percentage that fall out because of the flipper. There's times where we have to terminate because of the seller. It's not just because we could not find the in buyer or we had incorrect numbers. Quite frankly, I'm fairly impressed by that number and the difference between flippers and wholesalers not really being that drastically different.

SPEAKER_01 8:05

Wholesaling sucks. Wholesaling is finding a needle in the haystack over here, and then finding a needle in the haystack over here, and then using those to crochet a blanket. It's the dumbest thing because I found you and you want to sell, and I got a timeline, and now I got to find somebody that wants to buy a house in Tallahassee on the worst street in the world that wants to pay me$15,000 for arranging the transaction. When I could put that same amount of effort with no money, I could start aligning myself, and I've got a booklet for that. It's the Joshua Ferrari. We can make that into a booklet of what you do about how to put together an imaginary deal. Go out and talk to everybody you know and get a list of people that would invest in this imaginary deal, then go find the deal that fits that footprint. But all you're really doing is you're circumventing all of this. You don't need to do this. That's the culmination of that video. All feelings.

Pride In Wholesaling And CTA

SPEAKER_00 8:58

The culmination of that video is that guy wants to sell you what he does. And instead of just saying how his shit is so awesome, he's got to tell me that what I do sucks first. Why? Why not just talk about how awesome your shit is? How does wholesaling suck? I go find motivated sellers for a discount, and then I have in buyers, and I make a fee. It's not arranging a transaction, it's solving two people's problems. Seller needs to sell the property, they're willing to do it for a discount. End buyers, they need inventory. We go do that and we get paid. Wholesaling doesn't suck in any other industry except for real estate, according to this guy. Why? Because he does something different. Fan fucking tastic, bro. Good for you. We are so which, by the way, watching his entire video, nobody knows what he does. What does he do? Just Joshua Ferrari video. I don't even know what he's talking about. That video sucked. That's what sucks. Not wholesaling. Your video sucked, bro. Nobody knows what you're talking about, other than the fact that you can't stand on your own two legs and talk about how your shit's awesome. You have to come say my shit sucks. I hate that more than anything. That's why you don't you cannot find a video out there where I say another real estate investing strategy sucks. Because I've done all those. I have chosen to do wholesaling. And it doesn't suck. It's awesome. It's what has allowed me to have freedom. Freedom to travel the world with my family, show my kids an amazing life, homeschool my kids, be able to do literally whatever I want every single day. Is it easy? At times, is it really hard? Yeah, it can be. It's really hard having to pick the phone up. This phone can be super heavy at times, it could be demoralizing. So can everything else as an entrepreneur. So it's no different than anything else. It's just a strategy. Go sell your strategy. Stop attacking mine. Alright, guys, that's our episode of The King Closer Reacts. Let me know. Do you agree or do you disagree with my takes today? Regardless, show us some love. Like today's video. We'll see you guys tomorrow.