Need HELP!!! Im currently working with an investor as a bird dog but unsure of what to charge or how to charge for my leads. How do i pass on the leads i have and make sure im not cut out of the deal?? I had this happen before… I sent someone massive leads and never heard from them after that, i felt like a fool. How do i keep this from happening again? :banghead
Tough spot. For one, the wholesaler will determine how you get paid, not the other way around. I’ve always paid birddogs out of the profit… 10%. Bottom line, most wholesalers don’t need birddogs, which puts you in a precarious situation.
When you pass a lead, just keep tabs on it with the wholesaler. Follow up often and know where he’s at in the process. It’s the same situation we run in to when we outsource leads. It basically comes down to trust…
Do you know the leads you passed before closed? It wouldn’t be unheard of if they didn’t…
Sign a sinple agreement to prevent this and really screen the people you give leads to. In a overall sense always keep you mind and heart pure so these situations don’t happen. I know that sounds so stupid but trust me you control your life.
In most states, bing a birddog and earning a fee based on the success of the deal (the buyer completes) is illegal unless you hold a RE license issued by the state.
Given that signing a contract, an NDA or anything else is a bit of a waste. Unless you expect to go to count and ask a judge to enforce the agreement even though the activity was illegal, why sign?
An agreement can be symbolic and similar to shaking hands. Just not enforceable.
whenever you run into a situation where it may seem illegal just make a agreement where it states you are getting paid a marketing fee
From time to time I like to bring up my point of view…
The local Real Estate Boards impose regulation relevant to the distribution or aid in distribution of a homestead with the intent to protect the consumer (and in some rare cases monopolize the marketplace).
Whether or not this legislation is put into place in a criminal or a civil context, it does appear fairly evident that the enforcement of this legislation would be limited to that of:
a) When a consumer is being blind-sided (ie: you are acting on his or her behalf without proper licensing and steering him/her wrong)
b) You are continuously taking a “fee” for selling real estate.
If you are working with an investor, and you are paid by the investor, who has experience in real estate transactions, and you are not party to that transaction (ie: a consultant) you should, (this is not to be construed as legal advice) be ok, for the following reasons:
You are taking a fee for selling information, not real estate (nobody can prevent you from charging $5.00 to tell him or her were the nearest gas station is, or where the nearest “deal” is)
Even if legislation was in place to protect the consumer, you have conducted no harm to the consumer…so in a semi-perfect world, you can indeed pay for a lead on a house!
I think it is important to know, most investors are opposed to the local Real Estate Boards attempting to corner the market on Buying/Selling properties, I am certainly of the opinion that the local Boards would like to see no investors/creative RE at all so that they can continue to take a small chunk out of every property sold and have the properties sold according to their “rules & regulations”.
There is also such a thing as a simple Partnership Agreement, thereby making you and the investor principals in the transaction. The Bird Dog is bought out of the Partnership by the investor, thereby violating no State Statute.
John $Cash$ Locke
John is right, as long as the bird dog isn’t representing a party in the transaction and not harming anyone, then the bird dog should be fine to collect a fee. If the bird dog has questions, simply contact the state board about contracting a property and then selling your interest.
Most if not all boards don’t have a problem. Just be sure that you are in the transaction with the investor.
Good luck to all!
Write up an seperate addendum stating that you are recieving a marketing or consulting fee for whatever amount the agreement is for. Both parties sign and date it. You can either go as far as getting the document notarized. To your success “Mrflippahouse” aka “PrinceofWholesaling”
I have few questions relationg to this topic.
I attended a REIA meetiing and listened to the discussion about Bird dogging by placing properties under contract in the name of the investor. This seems really risky since you have no good way to protect your interst as the bird dog. It was explained that this is best to prevent holding time issues.
Is this the only or best way to do this?
If I find a good property with an ARV of lets say $200k, that is for sale for $110,000 and needs about $30k in rehab what should my bird dog fee be? is there an equation I should apply?
When does the bird dog actually see a payment? At closing? How do you ensure this and does this check come from the title company in your name or it paid under the table by the investor?
with a equation like that you could just wholesale the deal for 5-10k thats when you get the check from the title company. birddogs are paid under the table through checks from the investor or cash. birddogs sell leads to deals wholesalers sell contracts which would result in why they get paid the way they do.