The easiest way to spot a wholesaler who SHOULD be a bird dog is how strong the contract is. We’ve had some horrible contracts assigned to us, but they were good deals and it didn’t matter.
I can tell strong investors by how well the contract is written because it has a good option (no less than 14 days, which is tough unless it’s a great deal), fair earnest (but not too much, let’s say .05%), etc. You don’t have to fleece the seller, but we’ve had deals with 5-7 day options and 2% earnest. We knew we were going to close even though we only had 1-2 days for due diligence.
Hi, so based on everything you’ve told me, what should I LOOk for in an investor? I have one now who wants to buy low ARV properties, no more then 10K in repairs with a few other requirements. I plan on calling some of the ads I’ve seen(craigslist, backpage, bandit signs, penny pincher,etc…). What would be some telltale signs of a good/bad investor???
I don’t usually post but I have been a member of REIclub for the last few years.And I could not resist this one.
I just wanted to point out that in this industry it dosen’t take long to make a name for yourself , be it good or bad, especialy if you work in one specific area.My target area is Sacramento Ca. And I have gotten to know a lot of the areas best and worst investors here.
Your career as an Investor or Birddog will either take off or die depending on how you conduct business.
I treat my Birddogs extremely well , because without them as part of my team I would not get half of the deals I get. Each one brings me exactly what I’m looking for and that alone is priceless!
I also recommend getting the amount of your fee on a seperate contract. :deal It’s less complicated that way. Then there will be no confussion on what you are getting for each closed deal. I do have some that don’t require the contract but I have worked with them a long time.
Linda made a great point! I’ve used non-circumvention agreements to assure payment. This is a simple 1 page form you can find online for free with a simple search. You worked for it, protect it! :bobble
I figure I would put this thread up to the top again, as there are still questions about birddoging that I believe I have answered so far. If there are any more questions, feel free to ask the forum.
Lamar, this post was very helpful. I had a question about fees. You mentioned $500-$1,000 as a commission. I have heard investors offering a % of the profits. Is the birddog fee normally a flat fee structure or percentages that you have used?
Do you know where I could find a basic contract to use between the investor and property finder?
It can bee whatever you work out with the investor. It doesn't have to be a flat fee. Also it doesn't have to be $500 - $1000 either... It could be more or less... but usually that is what I see on average. As far as percentages, I've personally seen 1/2 to 1 %. Again, its whatever you two agree to.
As far as finding an agreement. I would google it. Look for Property Locator Agreement or Birddog agreement. Also, you can post that question in this forum as well as other forums to find where people are getting there’s from. I had one through a birddog site that I signed up for when I first got started. They actually updated their site. Haven’t been there in a while, but you could check it out and they may have what your looking for. Again, I used them a long time ago and I didn’t do deals through them, so I don’t know their criteria or anything now. They actually shut down for a while. Looks like they’re back. Check it out: www.Birddogz.com and hopefully you’ll find what you’re looking for.
When I was bird dogging, I would have several investors lined up. I would email them all about a property, without providing the address info. When one of the investors said they were interested, I would send this email agreement to them.
This email constitutes a contract agreement, whereas in consideration of services to be rendered by YOUR NAME (Finder), and YOUR INVESTOR (Client) hereby employs Finder to refer to Client a prospective:
Finder agrees not to participate in or conduct any negotiations with prospects, or solicit loans on behalf of prospects. Finder is not licensed by the Texas Department of Real Estate.
Finder hereby delivers to Client the name and identity of the following prospect:
Name:
Address:
Telephone:
Finder hereby delivers to Client particulars concerning a real estate parcel that Client might want:
As compensation for Finder’s referral, Client agrees to pay Finder $1,000.00 upon the closing and sale of the transaction involving the above-cited real property, or upon the closing of the first transaction involving the above-cited prospect.
Should the prospect or the property not result in a transaction involving Client within 12 months of the date of this agreement, Client shall owe Finder no compensation.
I seem to have the opposite problem from most of you and don’t know why. I have way too many properties due to great buying model, but lack investor pools. I can buy houses, have my rehab crews and rental dept as well as prop management, so I can still sell my props at around 70% ARV rented and with assistance with hard money and perm financing for great opportunity for investors. Great rental market here and houses are cheap. Just cannot find enough investors that want a passive income with no money of their own invested. Seems simple, but i guess I spend all my time on the projects I am not out with the investor world…any advice?
Great Post - The “go getter” type bird dog’s have proven invaluable to me. I like to throw in unexpected bonuses or incentive so they call me first any time they have a great deal. Something like fee + $100 gas card…especially since they are my only person on the ground in some areas.
I’m new to the real estate world and I want to start out by bird dogging. Does anyone know some great questions to ask the seller to get them to drive to sell their property so I can give it to an investors? Any help would be greatly appreciated.
:biggrin Hey Lamar,
That is very good input I didn’t think of it that way keep up the good work. It directs me in the right way
of doing things.
Thank-You
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Whether you’re a novice real estate investor or you’ve been at it for years, real estate investing is an endless series of challenges. First, you have to locate motivated sellers. Then you have to buy it right, manage it even better, and still find a way to turn a profit. To top it off, you have to try to do all these things while simultaneously juggling the myriad other details of your life while laying the groundwork to become a full-time investor.
There just isn’t enough time in the day, is there?
Wouldn’t it be nice if profitable deals would almost magically come to you?
Well, they can.
By putting Bird Dogs to work for you there’s more time for you to concentrate your energies on more profitable activities: negotiating with sellers, putting together winning proposals, and moving on to the next deal.
In case you’re not familiar with what a bird dog is - or what a bird dog does - they are basically scouts that sniff out deals for you. Their sole job is to locate properties that have motivated sellers and lay the groundwork for you to move in and close the deal. This saves you time for the really profitable aspects of real estate investing.
While all bird dogs are not Realtors, Realtors have a huge advantage over non Realtor bird dogs, for obvious reasons: They have access to the local MLS, FLMS listings, they know the neighborhood, they know how long the homes are on the market, they know what buyers are looking for, they know what it will take to get it in resale condition, they have access to motivated buyers and sellers or can find them for you.
Without motivated sellers you can’t put together real estate deals. The problem you have is there are only so many hours in the day for you to do everything that needs to be done. If you still have a full-time job working for someone else you have even less time available for your marketing and prospecting efforts. If you assume that marketing - of which locating motivated sellers is a critical part - takes 20%-25% of your time, you can easily see how little time that leaves for the other activities you need to be doing on an on-going basis to reach your goals.
By having a bird dog or bird dogs doing these things for you it allows you to better utilize the time resources you have at your disposal. A good bird dog isn’t born: they’re made. It’s going to take a little effort on your part to help your bird dogs help you. The best way for you to do this is by clearly articulating to them what you need. Again, here is where Realtors can be invaluable, because you will spend less time bringing Realtors up to speed as they already have had extensive training.
The good news is that there are plenty of people willing to be bird dogs. They could be friends, family members, or others you come in contact with. You can also work with novice real estate investors through your local REIA to locate properties for you. It’s also relatively easy to put together larger teams of bird dogs by utilizing message boards, Craig’s List, and other online resources. If all else fails you can run a newspaper ad of your own. The main point here is that bird dogs will free up more of your time so you can do those things that have a greater probability of earning you money.
Bird dogs can be the path to your real estate investing goals. The finder’s fees you’ll pay your bird dogs for bringing deals to you are more than offset by the value - and the wealth - they’ll generate for you. Take the time to learn how to work with bird dogs in reaching your investing dreams. As you get better at working with bird dogs you’ll find that you have more time and money for other pursuits - like deciding what to tell your boss when you quit your full-time job and take the plunge into full-time real estate investing.
Ask them why they are selling the property and you will see how motivated they are. Its more a question of how motivated they already are, not how motivated you can make them. If they are not very motivated to sell, in other words, if they are not becoming stressed over not selling the property, you may not want to waste your time.