Currently, I am a senior Finance major at UNLV. I live in Las Vegas and my emphasis is is REI and appraisal. I really did not even hear of bird dogging until recently. This seems like something I want to do to get into the REI field.
My most basic understanding of what a bird dog does is find homes that are underpriced compared to sales comps. Then find buyers and collect a referral fee. Is this done with flat fees or %?
First off, how do I start doing this? Do you need to be licensed or anything? If not can I just start researching and contacting buyers? Also, where do you all get comps of recently sold houses? Also are there any other kind of buyers beside the We Buy Houses people, people you meet at REI clubs, or from the newspapers?
Thanks in advance for any reply.
Also, what about the e-book Barry Grimes sells on this website on Real Estate Jobbing? Is this something I should purchase?
I’ve just started to do this myself after purchasing the e-book from Barry Grimes. I think the book itself is great and answers most of the questions that you’re asking. From what I understand, you can negotiate either a flat fee or a %. It’s mostly up to you. A good place to start looking at comps would be the public records for your county if you have at least the addresses of homes that have sold or the general area. The Bird dog e-book has some great info on this subject. It was a good purchase for me.
I have been looking around at some different stuff on this forum and others. I think I have developed a fairly accurate bird dog process. Correct me where I’m wrong, or add anything I missed.
Step 1 - Find buyers/rehabbers and find out their specifications.
Step 2 - Find properties not listed in MLS that meet their specifications. Usually properties from motivated sellers that are pirced at close to 60% of FMV with little repairs needed.
**Step 3 is where I am confused a little.
Step 3 - Notify the the buyers who have what they are looking for. Now what? How do I know that if I send them all the details they won’t just steal it from me? I have read to prepare some sort of report with estimated repairs, a CMA, pictures, etc.
Is this Step 3 right? Do i basically auction off the information to the highest bidder?
Man oh Man, am I glad that I dropped by here today!!!
First off, like one of the other posts said… “It ain’t rocket science”. Your steps #1+2 are pretty much right on the money. Step 3, however, needs to be treated very carefully, or yes, you could get pushed right out of the deal.
Here’s what I do for step 3.
Contact all of your buyers at the same time, email, phone call, whatever. Tell them that you’ve got a property that’s right up their alley as far as price, amenities, location, etc. Decide on how much YOU ARE WILLING to take in cash for your efforts (this is normally arrived at prior to presenting any properties to your investors. Usually, depending on your area’s market, $5k is generally the going rate)
Now, you can transfer the deal to your investors in one of a couple of ways:
become a principle in the deal (sign the sales contract as the buyer). Once that’s done, you essentially “FLIP” your interest in the contract to your buyer.
As above, become a principle in the deal. Tell your seller that you are going to bring in another investor to complete the deal. Call your buyer (investor) and tell him that you have a property under contract that fits his needs to a tee. What you do next is take your seller and introduce him to your investor, provided your investor has paid you your fee, and tear up your sales contract while handing the seller over to him so they can sign their own contract.
NOTE: Completing a deal as outlined above actually can be more lucrative for you, as you will already have a SIGNED CONTRACT from which you can negotiate a better price from your investor to you as your fee.
Again, make all the necessary calls or emails to your investors and start a feeding frenzy. This works very similar to starting a bidding war on a property, but instead of bidding up the price of the house, it’s your fee that’ll be getting raised to the highest bidder.
One word of caution here… DON’T GET GREEDY!!! If you want to get a bad rep as an expensive bird dog shoot for the moon, cause it won’t last for long. start out being extremely reasonable with your pricing. After your investors get to know you and the kinds of properites you can bring them, they’ll be only to happy to pay just about any price you ask for because they know that you’ll always be bringing them quality properties.