How much to pay a BIRD DOG on a $12,000 deal

Hi All, I have put together 2 deals this year and have 2 more closing this month.

The set up is:
A guy who contacts me about 4 or 5 times a year with properties that aren’t really deals finds one that I can put together.

I ask him if he wants to work it with me so he can learn the business, (no split fee discussed) and he says sure.

He gives me the phone number of the seller and asks me to call.
I call the seller, negotiate the sales price.
I set up inspections the seller and with my buyers.
I negotiate a buy price with one of the buyers I developed with this property.
I get all the contracts together with my attorney.
I set up everything for the closing. (Profit about $12,000)

I call and e-mail the bird dog every time there is an update and he doesn’t do anything to get involved.

What fee should I pay the bird dog? I don’t want to be a cheapskate, but he wanted to work the deal with me and I tried to keep him involved the entire time, but he didn’t do anything except give me the phone number of a potential seller.

I understand that finding the house is half the battle, but what would you do?

Thanks for your input, I don’t want to turn the guy off to the process, but he didn’t do much of anything.

Well, as you mentioned, finding the deal is half the battle. If that’s true for you, then he did his half, and you did the other half. So, splits the profits.

You could experiment… Offer this bird dog 50% of the profits, and see if he hunts any faster, or more often. Otherwise, there’s not much for you to lose is there? He’s doing all the expensive, time-consuming, hard, leg work, and you’re pushing papers toward a ‘done deal.’ And actually doing the negotiating…which pretty much makes, or breaks, even the most promising deals…

I promise you that if this bird dog is halfway decent and you offer him 50% splits, this guy will start hunting like a rabid hound. Why not? Do you really want to teach him to compete with you?

I’ll pay 50% splits with anyone that brings me real deals.

BTW, it probably took him four or five tries, just to figure out what a “good” deal is, according to you. So, he’s done a lot of meaningful homework to help you make some money. That’s worth something, too.

Hope that helps, more than confuses.

You’re missing a bit of information here. How much did you buy the house for? The going rate for me is what I would pay a real estate agent anyway and I have no problems working with real estate agents. I have no problem paying 6%. And as long as you use logic, it’s a fair deal. If it’s a $100K house, you pay him $6,000. If it’s a $50K house, then $3,000. If it’s over $6,000, then you may want to limit it to a 50/50 split and tell him a partnership is 50%. If you offer him $500 for a $100K house, I don’t think he’d be very motivated to bring you another deal or he might work for someone else. Even at a 50/50 split, I don’t think he’ll bring you a lot of good deals every month as it’s not that easy to find motivated sellers that will bring you great deals. A lot of it is just chance. With more people working for you, your chances have improved. Trust me, you motivate your soldiers fairly and you’ll be doing business with these guys forever and just think of all the money you’ll make with him in the future. You’re investing in long term business partnerships here.

In fact, it’s actually better that all he does is find you the motivated sellers because then he won’t want to do it all himself and not be a partner in the future.

Think of it this way. What’s the difference between you calling up the seller and setting up a price and you calling up a real estate agent and setting up a price if they both get accepted? You have to call the agent to set up an inspection. You have to negotiate a buy price with your buyer. A good attorney is supposed to have all those contracts anyway. If an attorney closed this deal himself, most of the work would be done by their legal secretary or law clerk making $12 an hour. A good real estate agent would also have their own secretary who would do most of that work you mentioned for $12 an hour. Pushing pencils and setting up appointments is not worth a lot, which is why we’re in real estate to begin with, not working for other people as secretaries.

I agree with Javipa, I pay my bird dogs 50% Would you rather have 50% of a lot of deals or 100% of a few? The bird dogs I work with are my friends for life, I use them as references and I use them as examples to recruit new bird dogs.
Can you afford to get a bad reputation, he did his job, if you wanted him to do more you should have told him what you needed.
I get my bird dogs to take more photos, change door knobs, show the house and run errands to the title company, notary, and the buyers. But most times all they do is email me an address.
He did his job. Now pay him half, take him to lunch, let him know how much you appreciate him and how this deal wud never have happened with out him, and instruct him on how to find more.
A few of my bird dogs are now partners, we split costs on mailing campaigns. We have formed mastermind groups, were planning on doing many more deals together.
You can mold this guy into a deal finding machine, but not if u cheat him.
Bite the bullet and reap more profits down the road.

Thanks everyone for all your advise. I can defiantly agree about developing a relationship with someone who will actively go out and find deals.

Just a quick update, my 1st buyer fell through and I’m on to a back up offer that only puts $5000 in profit into this deal.

I’m now spent more of my time, knowledge and resources to keep this deal on track and am seeing it even less as a 50/50 split for the bird dog.

I’ll figure out what he feels he should be compensated with and repost after the closing next week.

Thanks again for all the info. DAVE

The amount doesn’t matter.
It should be 50/50 split.
I quote you: “Finding the house is HALF the battle.”

interesting topic–glad someone brought it up because this is what I am interested in (I see {{{lots}}} of things around me in my weekly travels (hint hint) this is my first post BTW and hello to all of you :biggrin

I DO want to learn the business by helping and partnering up with someone like this–

I’ll sign back on next week–bye for now but I will check back in on Monday (it’s cold in this library and my fingers are nearly numb!)

BirdPupppy (aka Lisa)

I have no experience (yet) in Real Estate, but if I only gave a lead to someone, and they did all the work by themselves, I would not expect to receive a 50/50. I would think that in order to get a 50/50, then I suppose by my own standards I would need to do something more than just hand someone a phone number…? Besides, I would think I would be kinda nutty to pass up the opportunity as well to form a great partnership with someone for something like this as well as expanding my network of friends! There’s a lot of opportunity that could be missed here :beer :bobble
Just saying…(guess that’s me) anyway, library is closing! have a great weekend all :biggrin

Bird Puppy!

what is the best way to get started with earning bird dogs?

Just an update everyone.

The original knucklehead that said he would buy the deal backed out 2 days before closing.

I went with an back up offer that was able to come in quick and get the deal closed in less than 7 days.

I had to settle for a $5000 profit instead of the $12000 on the original contract, but it’s better than nothing.

I wrote out everything that went into the deal from when the birddog gave me the phone number until closing to summarize everything that happened. (I share the details of each deal with my real estate group)

I went over every detail with the birddog and he still couldn’t bring himself to admit that he got a phone number and I did all the work. In the beginning I should have been more clear that if he expected to split the profits 50/50, then he would have to split the work 50/50, but that’s my bad and I let it slide.

After all expenses, we were left with about $3400 which I split with him, but let him know that if he wanted to learn about the business, he would have to put in more effort to split the profits.

Alls well that ends well. We made some money, but we’ll have to detail the “SPLIT” for the next deal.

Thanks for all your comments and, birddogs, message me if you’d like more info about how to approach wholesalers and get into the mix.

God Bless. Dave

Hey Good Show Dave,
What kind of expenses did you have wholesaling?
Your buyer shud be paying closing costs and any other expenses.
My very first deal I wrote into the contract that We split closing costs, after that I thought why don’t I just write in the contract that buyers pay all closing costs?
I only had one beginning investor ask why shud he have to pay all of closing.
Now when I write in the assignment an $8,000 fee, that’s what I walk away with.

I’m not sure where you live, but here in Northern NJ, we have to involve lawyers in everything.

The cost of my attorney included setting up the original contract with the seller so I could have it locked up and no one else could hamstring me. The seller was great because there were 2 guys that tried to cut their own deals behind my back, but they said they were “with Dave”. It’s kind of dog-eat-dog in this area and if you don’t have a contract go through attorney review, anyone can come in and steal your deal.

The other costs were for the well test, I try to do all the tests, (well,oil tank sweep,septic) before I turn it onto my buyers so there will be no delays in case there are any issues and negotiate that with the seller before hand.

See you on the next deal, I have 3 more on the table.


Dave, just write in your contract that the property sells “As Is”
It’s the buyer’s obligation to do his own due diligence.
If you have a good contract that’s signed, take it down to public records and file a memorandum with that contract. It will cost you 15-25 buks.
Save the blood sucking attorney for when you really need him.
Losing $1600 on a $5,000 deal is not good.

Randoskie, what area do you do your properties in?

I’ve read about just doing your own filing at the court house to at least cloud the title just in case there are any issues and you need some insurance, but I’ve never done that.

Thanks for the info and I know that giving away that much on a deal, even a small deal is quite a pinch.