First let me start by saying I’ve been a fan of REIClub for alittle over a year browsing thru the forums from time to time.Well any way im 24 with a family and a 9-5 job and want to start my career in REI but with little knowledge(im more of a hands on learner) thought it would be best to start birdogging first to gain hands on experience and pocket alil cash on the way to save for my start at the Investing side of things. Problem is I dont know how to begin like how do I go about finding investors to talk to about letting me birddog for them? and exactly how do you birddog? :anon seems like a dumb question but throughout this forum i havent come accross the topic that really breaks it down on what to do. I believe its more than just handing someone a name/address/phone number.Plus i work mon-fri 9-5 when is the right time to do this? :help
Check your local newspaper and want-ads circulars to see if you have anyone advertising “We buy houses - any condition” or something to that effect. Those are your local investors advertising. Check around town. Do you see any bandit signs that say the same thing? Check busy intersections.
Do you have a local REIA that meets? If so, attend the meetings and try to meet as many people as you can. People there will be able to point you to the players in your area. Do you have a local used appliance store? Investors probably frequent them.
REI with a full time job is going to require some type of time sacrifice. It might involve you making some calls or driving to see something during your lunch break, right after work, or on the weekends.
I don’t birddog, but have rentals. I work during the day at my regular job, come home and spend time w/ my family until the kids get in bed. Then I do whatever rehab work after they’re asleep. I work on the weekends on REI as necessary.
thanks for the advice justin!!! well i have the number to one ad saying I BUY HOUSES ANY LOCATION ANY CONDITION CASH OR FINANCING!!! my question is how do i put the deal together as far as calculating everything to know if its a good deal to present to someone?
Thanks Micheal, so exactly what do you mean by that? run me through exactly what i need to consider when doing the calucations on a potential deal? like lets say i see something for $100,000 where do i go from there?
When determining value you have to know how to determine “Worth Value” and “Money Value” the first is what it is worth and the second is what you’re willing to pay for it.
Cant answer the second question until you determine what kind of investor you are… As a flipper I need high equity deals however if I flipped using a lease option or land contract and made my spread rather passively then a little equity deal would make sense.
Heck I could pay full worth value if I knew how to ask and receive seller financing utilizing no interest loans, subordinated deeds and exchangeable collateral…
Does it make sense to over pay for a house under a sub2 contract?
Too big of a question… Certainly there are simple answers like 70% of value or 2% but wouldn’t it be better to know how to make almost every inbound opportunity a deal?
well i guess it boils down to who i birddog for then and that will determine what kind of investor they are. and ofcourse i want to make almost every inbound opportunity a deal!!! well i have a number to a I BUY HOUSES ANY CONDITION ANY LOCATION CASH OR FINANCING ad. what type of investor do you think that may be? and what type of deals do i do for those?
People who advertise “any condition or any location” are looking for a tore up house that no one else wants so they can play that aspect up and get the house REALLY cheap. Houses in poor shape generally aren’t going to be purchased by owner occupants so these investors are only in competition with other investors (and only some investors want to re-do houses in really bad shape). These investors may rehab then resell or they may buy, rehab, and hold for rental. There are many houses in poor condition that don’t get listed. A lot of times the owners will just throw a sign in the yard and hope it sells.
Best thing I think you could do is talk to these people looking for houses and just see what their deal is. A lot of times people tune into a certain portion of the market. For example, I don’t even consider places that people are asking over about 40k for (unless it’s a duplex or bigger). I can’t pull the rent I need to make it worthwhile if I pay that much for a house. So if you were going to be looking for houses for me, I would tell you that I need to buy houses that I’ll have no more than 30k in by the time it’s rent ready. That gives you a target when you’re searching.
ok im starting to see the light. so lets say i run accross a investor with the same requirements as you, as far as wanting deals that end at 30k or less when finished to be rent ready how do i calculate a deal like that? what are things to consider when calculating?
To make things more concrete, I’m interested in owning houses for cashflow, and would be very pleased if you brought a deal to me. For example, you could look for a house with a monthly rent equal to 2% to 3% of the cost of the house (including rehab costs). If you find one let me know the details and what your finders fee is. If I buy it, and I might, you’ve made your first deal.
Some things you’ll have to do: You’ll have to study rents in your area so you know pretty accurately what a given property will rent for. You’ll have to estimate rehab costs so you can add them to the price. And you have to find the property in the first place – not easy! In fact, depending upon your local market it may be impossible to find any property that meets critera this strict.
If you are able to find deals like this I doubt you’ll have any problem finding investors.
For extra credit you could talk to a few property management companies in the area and pass on what you learn to any out-of-state investors that you talk with, along with info on the local economy, job growth, etc. An investor is going to have to figure out how stable the rental market is, and anything you can provide to help him research this would be a nice touch. A cashflow investor wants to be sure that he’ll be able to rent the place at the required price without much difficulty.
Bob made a great post and said basically what I would as well. Some out of state “investors” are just looking at places where you can actually buy a house for under 100k. I picked up a 4/2 foreclosure here recently for 15k that used to be owned by an “investor” from CA (I’m in MS). Out of state investing can work out ok if done right, but this person had probably never been here to see the house or the area, probably never did repairs, etc. We put a new roof on, insulated it, updated the electric, general cosmetic things on the inside. We’re in it for a total of about 24k and it’s producing $650/mo.
If you don’t have much of a background in RE or home improvement type issues, you should take the time to learn what things cost, what it takes to fix things, etc. To find deals that will cash flow for an investor, you will probably need to negotiate the price down substantially in order to include those rehab costs in there for the final package. So that’s the part where you’ll earn your money. After awhile, you will be able to look at a house and estimate reasonably well what it will take to fix it. Another important factor to consider is if the investor will be doing none, some, or all of the repairs themself. Labor costs will obviously vary depending on that factor.
thanx for the info justin. so where do i go to find out how to learn about the repair cost and how to accurately come up with those calculations? and what do you think of opportunities here in michigan for me?
I bought a book a year or two called “Flip”. It had all the price charts and calculations for rehabbing and flipping a house. I thought it was a great tool for almost anybody in real estate.
Chuck,
Check out your local home improvement stores. Browse the aisles with a pen and paper. How much does the cheapest carpet and pad cost per sq ft? What about floor tile? Price bathroom vanities, medicine cabinets, kitchen cabinets, countertops, sinks, sheetrock, window a/c units, water heaters, shower walls, etc. Start to think about what can be done to make something rentable by being cost efficient. Hardwood floors in good shape, but faded and scratched can be painted with floor paint for about $25/gal. It’s cheap and a lot faster than refinishing. Things like that will get renters in without breaking the piggy bank for rehab costs.
This isn;t a thorough answer, but I’ll give my thoughts on being a bird dog.
If you mean locating properties, telling someone about them, and getting a fee of $1000 or less, I don’t see the point.
If you actually make offers and get contracts to buy that you can use to wholesale deals to investors for a fee of $5000 or more, I would absolutely start out doing that.
And you could always refer sellers who turned you down to other investors to seal the deal and get paid as a bird dog as a Plan B.
Chuck
I am from Michigan too. The rental market is very depressed as we will loose population growth statewide in the upcoming census. Investors in rehabs and flips is the same everywhere.Your idea to bird-dog to investors is a good one now because the houses that the others have described are abundant beyond description. I have been in the real estate rehabbing business for 10 years and I normally track 10-20 REOs per month in my county, now I am tracking 125 REOs this month and as soon as the banks discover that the government is not going to help them any further there will be 250/mo. I recently bought a house for 12,500 and fixed it up for another 12,500 and found a tenant/buyer for 75000, on a house that would have sold for more than 125,ooo in 2006. If you find them we will buy them.
redhawk