WILD Wholesaling Scenarios | The King Closer Reacts

Grab the King Closer Blueprint: My Step by Step Sales Process for closing over 2,000 deals (Only $27): https://www.titaniumu.com/blueprint

Want to work directly with me to close more deals? Go Here: https://www.titaniumu.com
Want the Closer’s Formula sales process I’ve used to close 2,000+ deals (FREE) Go Here: https://www.kingclosersformula.com/close


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

_________________________________

With over 4,000 Videos, this is the #1 channel on YouTube for all things Virtual Wholesaling. SUBSCRIBE NOW!    https://www.youtube.com/@RJBatesIII

_________________________________

RESOURCES FOR YOU:

If you want my team and I to walk you through how to build or scale your virtual wholesaling business from A to Z, click here to learn more about Titanium University: https://www.titaniumu.com

(FREE) If you want to learn how to close deals just like me, The King Closer, then download the free King Closer Formula PDF: https://www.kingclosersformula.com/close

Grab Titanium Profits: Our exact system we use to comp and underwrite deals in only 4 minutes. (Only $99) https://www.kingclosersformula.com/titaniumprofits

Transcript

Welcome And The React Format

SPEAKER_03 0:05

What's going on everybody? Welcome to the King Closer Reacts. I am the King Closer RJ Bates the third, and this is a series where I'm gonna watch some goofy ass videos and hopefully make you guys laugh, but maybe actually teach you a thing or two. Let's get into the first video.

The Cost Of Sustainable Wholesaling

SPEAKER_00 0:20

One of the biggest reasons why most people fail in real estate wholesaling is because they come into the business with the wrong mentality. Most people get into wholesaling thinking, how can I make 10,000, 15,000, or even 50,000 a month with spending as little money as possible. And that's a problem. They're trying to build a six-figure business with a hundred dollar mindset. They don't want to spend money on marketing, they don't want to hire help, they don't want to invest in systems, they don't want to invest in coaching, they don't want to invest in data. So they want massive results with minimal investment. But think about it, if you guys are really trying to make $10,000, $15,000, or even $50,000 per month, you're going to have to spend about 20% of whatever your goal is. So let's say you want to make $10,000 per month, 20% of that would be $2,000. So that means $2,000 every single month you should be deploying into marketing in order for you to hit your goal. So when I first got into this business, right away I understood that it was going to cost a lot of money in order for me to make some money. And I was willing to do whatever it took in order for me to get that result. So what I was willing to do, luckily I didn't have to, I was willing to go work a part-time job, even if it was minimum wage. That way I can continue paying my co callers and make sure that the marketing never turned off. So that way when I was done with my shift, I could come back and hit the leads that came in for the day. And I'm not saying that you can't get your first deal with little to no money or with zero dollars, but the reality is it's gonna be All right, I think we get the point.

Losing Money Without A Transaction Coordinator

SPEAKER_03 1:38

Cut and we're back. Listen, uh, I I appreciate this video. Um wish it had a little bit more enthusiasm and energy in it, but whatever, man. His his point is valid. And and we do see this all the time. People get into wholesaling, and it's they don't want to spend any money, and and they think that they're going to automatically get up to these $50,000, $100,000 a month. And you can achieve that with very few deals. I mean, say you hit a streak of a couple of twenty-thirty thousand dollar assignment fees, you're you're up to a hundred thousand pretty quickly. But is it sustainable? And what he's talking about there is to have sustainable success at that, you absolutely are going to have to be investing into marketing and systems and honestly, labor, your team. You're gonna have to have cold callers, acquisitions, dispositions, transaction coordinators, executive assistants, bookkeepers. It costs money to run a business. And so if you're not prepared for that, then set the proper expectations in your mind about how much money you do want to be bringing in every month.

SPEAKER_01 2:51

I lost $8,000 on a wholesale deal where I could have easily walked away with $20k plus just because I didn't have a transactional coordinator. So I had a property under contract with a tenant in it out in North Carolina. Me and my team got the deal on the contract for $100,000 and found a cash bar for $120,000. Everything was going good, fantastic at that. We even sent the deal to our title company, had them pull title, and was all clear and ready to go. But last minute, the week before closing, the cash bar requested a lease between the tenant and the current owner just to verify the rent. Which I'm not gonna lie, it wasn't a complete right to do so, but me and my team did not have our paperwork in order. At the time, we had over 20 deals under contract, like two plus million dollars worth of contract value. So we're scrambling last minute to try to find the lease for this property. Come to find out we never got the lease to begin with. And to make things worse, we called the owner, like, hey, listen, we need a copy of the lease to make sure we can close on the property this week. And they're like, uh, well, what lease? I don't have a lease signed with the tenant. Whole time they've been letting the tenant stay there, paying money under the table, never sign any legal document for them to be there. Long story short, this is a big no-no and a red flag for our cash buyer. On top of the other renovations he had to do because the property needed a lot of work. He asked for an $8,000 price renegotiation. Keep in mind we've had this property under contract for over 30 days, which slows down our conversion cycle. We left it be under 30 days for a close. So we had no choice but to go with the price reduction for $8,000 and take the loss in the deal, only walking away with about $12k. And right after that, I didn't waste any time. I went on Fiverr, upwork Facebook, and I hired a transactional coordinator. So moving forward, oh my I mean, okay.

SPEAKER_03 4:24

So he lost $8,000 out of his assignment fee. Could have been way worse, right? He could have lost the deal. But also, when a buyer comes to you with a valid reason as to why they're renegotiating, I'd like to understand why he didn't take that exact same reasoning thought process to the seller and try to get that $8,000 price reduction. Also, why not just get a lease signed with the tenant? That felt like an easy solution. Um, rather than like scrambling to go try to find this non-existent lease in place. I don't know. I get his point, and it is important to have a transaction coordinator, but that could have been a lot worse. And it could have been because of lack of communication, um, overcoming some sort of airship issue, um, some sort of uh lien that that was gonna hold you back for closing and could have cost them the entire deal. Those are more of like the horror stories that we hear with not having a transaction coordinator. This one actually feels a bit light, but the point carries over into the importance of having a TC on your team.

Dealing With A Bad Buyer

SPEAKER_06 5:43

I'm gonna walk you through exactly what happened while giving you a full walkthrough of this house now that it's been cleaned up. So basically, we had a buyer who was ready to go at $90,000. He then rewalked the property and then offered us $82,000 after we had already sent the assignment. First thing to learn from this is that you should never, ever, ever work with someone who goes back on their work. Then after this, we go ahead and go to the close. Before Christmas, we're supposed to close. He then says that the lender will no longer fund it because that's now we go ahead and we say, hey, I've got a lender for you, I throw my lender over to him. He then uses my lender and we're ready to close the first week of January. It's now ready to close the first week of January because it's out of town, so it puts it out the next week. Then the next week rolls around, and it's now making a complaint that we're not cleaning out the property for. So because we're able to tell it's a difficult difficult situation, we don't have to make everything work for you. So unfortunately, we have to put it on extra work just so I can get back uh be able to move into the next place. So this one really stopped that please do not ever work with an investor who goes back on their work.

SPEAKER_03 7:16

Man, there's a lot of things to unpack there in that entire story. And and I would be curious to kind of know during the dispositions process. Like he said, we sent an assignment, it didn't sound like the assignment was signed, and then the buyer tried to renegotiate. Never stop marketing a deal during dispositions until you have a signed assignment and non-refundable earnest money deposited. And then during that process, like I it makes it seem like this was the only buyer. I'm kind of reading between the lines there. Some of the stuff that this buyer asked him to do, change the locks, clean the property out. Absolutely not. What are we talking about? This is this is not our responsibility. We we don't even have the right to do that. Like our entire rights is to the contract to purchase the property. That's it. And so when you are buying a property, it's not on the seller, it's not on the wholesaler to change locks of a property. It might be on the seller to clean out the property, depending upon how the contract was written. But more often than not, it's as is, where is. And if there's stuff being left behind in the property, the seller kind of disclosed that and it's written in the contract to begin with. So that sounds like a whack-ass buyer that I would never want to do business with.

Missing Disclosures And The Propane Tank

SPEAKER_04 8:45

So the worst wholesale experience was actually pretty recent. So it's recent of mine. But I bought a property out in Paris, Texas, and uh I bought it from a wholesale, it's kind of a daisy chain deal, JV kind of deal. I don't care, whatever. But the root wholesaler did not get the seller's disclosures from the seller and did not provide that in the transaction. And as part of Texas property code, it's required to sit to send these seller's disclosures over, however, we didn't get them. The the lady that had it, she actually left $40,000 in escrow, which is absolutely insane for the amount of this purchase house. It was like $88,000. But then the wholesaler called me and said, Hey, oh, by the way, the propane tank is gonna be picked up on this date. What what do you mean you're gonna take the propane tank? I have zero sellers disclosures here, and now you're gonna you're taking my propane tank. Well, it was leased. Prove it. I called the wholesaler up and I said, Hey, why'd you let them take that propane tank? And he's like, Well, it was leased. I bought it. That wholesaler had to eat $1,500 to buy me a new fucking propane tank because he failed to disclose that that was leased.

SPEAKER_03 9:44

So yeah, Ryan Jackson is wild, man. I love that guy. He's a great in buyer. Um, if you don't know Ryan, um, he's known as the Trap House King of beer in North Texas. Uh, runs Texas Tuesday, been doing that for, I don't know, seven, eight years at this point. Um, but he also knows his stuff. And and this does fall on the wholesaler there. Like, if the propane taint was leased, then he had to disclose that to Ryan when they're they're doing their due diligence to buy the property. Because in Ryan's mind, he's gonna look at it and he's gonna say, hey, that's what I'm acquiring for whatever dollar amount he's buying the property for. And so, hard lesson for that wholesaler. I don't think that's Ryan's worst wholesale deal by any. That was just fresh of mind, like he said. I know for a fact Ryan's had worse wholesale deals, okay? But for you wholesalers, you need to pay attention to these little details because that $1,500 hurts on whatever your assignment fee was.

Rehab Math And A Flipper In Trouble

SPEAKER_05 10:54

Now, listen, listen. Hey man, the house needs about another $40,000 to $50,000. Do you agree?

SPEAKER_02 10:58

Wait, what? How? I mean, I mean on top of what I've already put in.

SPEAKER_05 11:01

Let's talk about it, man. You have you have two and a half bathrooms you haven't touched. That's $6K a bathroom, $6K we're at $12K. Let's say we do another $3K for the half bath. We're already at $15,000 all in, right? This is a huge kitchen. It's in a nicer area of Cleveland, right? So we probably have another $10,000 to $12,000 in the kitchen, right? Just with that, we're already in the 20s. We haven't factored in trim, baseboards, flooring, painting. You probably didn't test the water lines, did you? You seen you know what I mean? Like when you're when you're purchasing a house, right, where no one has lived in for a long time, you run into these issues. I think you bought it high, like you said. We both can agree on that. I'm I'm really looking at this house literally right around the corner, the exact same property, same bedroom, same bath, just sold for $147,000.

SPEAKER_02 11:44

That's probably why I was so over on my numbers.

SPEAKER_05 11:46

Yeah.

SPEAKER_02 11:47

Because the wholesaler told me $160. And and you know, like I I I mean I'm I'm this is only my third flip, man. If I'm gonna be honest, this is my third flip. Um, I messed up pretty bad, and and and and and now I don't know what to do.

SPEAKER_03 12:02

Man, that's a that's a rough situation. Um, so this is a flipper that bought a house from a wholesaler, and now he's trying to sell his house to, I believe, another wholesaler. The only thing that I would amend in how this gentleman was handling the call is to get the majority of sellers to understand your perspective, you want to understand their perspective first. And maybe this had already happened prior to the conversation. Of course, this is a TikTok, but for you that are watching, before you just come out and you say, Hey, I'm looking at the comps and I think this is worth 140. Hey, I'm looking at the amount of rehab that's needed here, and it's gonna be 50 to 60 grand. We want to ask the seller their perspective so they we can kind of understand their thought process. What do you think the property could be worth fixed up? He says there at the end, the wholesaler that sold me this deal said it was 160. Okay, so he thinks it's 160, we think it's 140. How much repairs? If he's not agreeing with 50 to 60, he's probably thinking 20 to 30. Now we understand the discrepancy because if that's the case, we're probably not looking at the holding costs and the closing costs and the profit as our issue. We're looking at the ARV is wrong, the rehab is wrong, and that's where now he's coming to grips with I really messed up here. I didn't know what I was doing. And so he's in a bad spot. That sucks. But also remember this, guys. As a wholesaler, you never want to be that original guy that sold the property to your end buyer with the incorrect numbers because our customer long term is our end buyers. We want to make sure that we are selling them multiple deals because every single time we sell them a deal, they're profitable. So they stay in business, they come back. That makes dispositions easier. We're not having to do blast and text and cold calling and all that. We can just pick the phone up and be like, hey, buyer, remember me? You made all that money on that previous deal. I got another one. So don't be that first wholesaler. I didn't think the education process was bad. I just would have liked to have seen a little bit more of understanding the seller's perspective before we hammer them with the facts.

Wrap-Up And Listener Comments

SPEAKER_03 14:29

All right, guys, that's our episode of The King Closer Reacts. Let me know what you think in the comments. And uh, Mr. Danny Force, I know you watch every single minute of the King Closer Reacts, and that's fucking wild, bro. All right, we'll see you guys tomorrow.