birddogging contracts

[murphy67]

When birddogging, is it necessary to get each house under contract  before passing the info on to an investor? I'm asking because I want to guarantee I get paid if an investor buys the home.

[tedjr]

Howdy Muprhy67:

The old how do i get paid question. As a birddog you are wide open. A birddog points out the bird and stands there with his tail in the air while the hunter shoots. When the bird hits the ground off runs the dog and brings the bird back to the hunter and drops the bird and sits and wags its tail waiting for a dog bone and or a pat on the head. Does that sound like you?

The best way to protect yourself is to know your hunter. It also depends on how you are doing business. Are you working with one buyer and trying to find  a house or ? or are you working with several buyers and showing several deals to several buyers. The more complicated it becomes the more protection you will want. Buyers tend to forget where they get their leads if they are just casual with you are have not even met you perhaps.

Birddogs do not generally get the property under contract. This involves more than most want to get involved and approaching the wholesale business where you are buying and flipping and maybe even buying for yourself if you can not flip them.

Be friendly and get some sort of a signed agreement with each buyer if you are unsure and even if you think you are sure they are honest they may still forget. It is not a bad idea too to let the seller know who your buyer is too before you show them the property.

Once you have the buyer it is best to be in the middle somewhere of the negociations or at least in the loop. It is probably best to get paid from the buyer and get money as soon as possible. As  a buyer I do not like to pay untill the deal closes. There is another thread on that too here in this forum.

[SD Newbie]

Ted,
I understand that investors might only want to pay once the deal CLOSES and i also understand from the B-doggers viewpoint of wanting compensation for the research and time they put in on the property...

Where is the line drawn? Because this can make all the difference in the world, IMHO.  If a person drives around, finds properties, gets comps, put the data together and presents it to an investor... that is a lot of time spent especially if you have to drive to an entirely different part of town to satisfy your investors needs...

Once you have investors who say they will work with you, should the line be drawn at that point as to how fees will be paid?

I am curious because I am at that point and before I hit the ground next year I would like some things to be clear...  I dont want to waiste anyones time...

So Ted I am all ears... or should i say all eyes...  



SD Newbie

[tedjr]

Howdy SD Newbie:

It is important to know up front when and how and how much you are going to get paid. There are several ways to do it and this creates confusion. You could be like an employee and get a small salary and expenses until a big deal hits and you get a bigger paycheck. An example would be where you are searching for preforeclosures for one particular investor. As a birddog for them I would want them to give me gas money and money for meals and pay the freight so to speak for the monthly access fee to the foreclosure service, etc. especially if I were doing nothing esle but this. I would also want a grand or so when I found a super deal and actually bought the property maybe even more depending on the deal. You may even want to be partners.

In another situtation you have found a property by driving around for days on your own and now want to find a buyer for it. As the buyer I am not going to pay for this information until I see what it is worth and then probably not even until I actually close on it. Some will probably pay at least part upon the signing of the contract and the balance at closing. You may tell any number of investors about the property. Here again it is important to keep up with whom you spoke with and even register their names with the seller. Having a written agreement with you buyer is better. None of this will ensure payment if you find a dishonest buyer who does not want to pay you. I am sure he may have a friend or cousin who can act as the buyer and there you have it no coins for your work. I believe the world is mostly honest but still try to protect myself. Texas is more laid back than most other places I know of but still you should cover your butt.

There is really no iron clad rule how to do deals as a birddog. I would say to get as much as you can as soon as you can and be upfront and spell out the details of your expected payment in a friendly matter. I have dealt with folks that are too abrupt and almost scared me away with the first phone call. You will put up $5000 nonrefundable earnest money made payable to me personally was how one conversation started with one birddog I was trying to get help from. We did not get very far.

Somewhere in the mix of hings you will learn who is real and who is just kicking tires and who is trying to steel your deals. There are more players than before when I first started.

I hope some of my rambling helps answer some of you questions. Keep in mind too that Brokers and Realtors spend months sometimes before a deal closes and rarely get paid in advance. What you described above is also just part of the game. Once you have done the driving around and getting info you may find ten deals that are worth $2000 each to you. That would make a great Christmas tomorrow.

[SD Newbie]

Howdy SD Newbie:[/

It is important to know up front when and how and how much you are going to get paid. There are several ways to do it and this creates confusion.

There is really no iron clad rule how to do deals as a birddog. I would say to get as much as you can as soon as you can and be upfront and spell out the details of your expected payment in a friendly matter. [/i]

Tedjr,
Now I am kind of confused...  :-[

Knowing exactly how and when and how much one will get paid sounds good BUT as a NEW  B-dogger, how is that stated?

When a new B-dogger introduces himself to a possible new investor, what's been your experience on how the topic of compensation is handled?  

For example: would a new B-dogger state his price for just finding deals and/or assigning contracts once the investor said he could use a bird dogger?  Or once the investor said he would be willing to participate in some deals...

Tedjr, this isn't like a normal job because it's not like you can look online and find the average fees that are being charged for finding deals and/or assigned contracts...

No one wants to short change themselves...

I hate to ramble, we newbies are like that; but i just dont want to stab myself in the foot...



Thanks in advance for whatever advice you may give...



SD Newbie

[tedjr]

Howdy SD Newbie:

I am sorry you are confused. Birddogging is confusing. How much and when is confusing and negotiatable as well. Some investors will not pay you at all and will go around you. I am by far no expert on the subject myself and have only had limited experience. On several occasions I offered $500 at the closing to friends if they could find owners of boarded up houses. That was all they had to do. I never got even one deal.

I do not have an answer for what is normal. If you brought me a deal and were willing to help get the work done I would be a mentor and partner with you and work on a 50 50 split. If all you asked for is $1000 then you would get that at closing or possibly 50% at the contract signing and the balance at closing depending on what funds I had. Today you could have your pick of presents under the tree and $50.

All I can say is just start talking with the new investor and get a feeling for what they will give for a good deal. In some areas deals are easy to find and you may only get an old bone and in some areas a good deal is worth gold. An old saying I have heard for years is you run out of money before deals so wait on the better deals and pass on the marginal ones. This is hard to learn at first especially because you want to do a deal and you have looked for weeks and nothing and all of a sudden you get one that looks good and you go for it and it turns out to be only marginal and you go ahead anyway without any margin for error and then some thing happens and now you are working for free just to get out of it or it never sells and all your equity is lost in monthly payments. Does it sound like this has happened to me. You bet it has and recently too. I lost a condo that I just could not sell at market price. After six months no offers and I got behind on the payments and was forced into foreclosure. It happens to the best of deals too and this one I thought was a winner for sure. I had to pick between this deal or another that I was paying on that had more equity. It was just a business decision to pick the house instead of the condo. It still took several months to sell the house. I lowered the price 10 grand and offered a grand bonus and finally got an offer and it was to close before Christmas but now is scheduled for 12/30/04. I will get $25,000 a $20,000 profit. I kind of got off the birddog subject in pointing out about deals but I hope you find it interesting. I started to delete it all but decided not too. Maybe you will learn from my mistakes and successes as well.

You will probably have to learn as you go about how much to ask for and when to get paid. Mabye a good adea to call on ads in the paper and get to know  the investors that advertize that they buy houses. I would ask them first what they would pay you and when. I would be interested to hear the results of your calls.

[SD Newbie]

Hey Tedjr,

Believe it or not you cleared it all up...  It boils down to asking what they will pay and when.  So really the ball is in their court as to what they will do for the leads and I guess I'll take it from there.

CONFUSION GONE

I'll keep you posted on the outcome once I hear back from them... I am going to shoot out an email today.

Thanks again Tedjr for you time and patience.