Hello all.
Quick question. Generally, what has the most potential to make more money? (Wholesaling or Bird Dogging)?
Wholesaling by far. It’s a risk/reward thing. Wholesaling has risk, bird dogging has none. It’s also a skill thing too, wholesaling requires an additional skillset that bird dogging doesn’t.
Thanks, Rich I appreciate the advice.
Many times it depends on your definition of wholesaling and bird dogging. Lets assume you mean that wholesaling is actually taking title to the property while bird dogging is simply flipping the contract.
Obviously when you take title to the property you will have a lot more risk. You will have money that you probably have to put into the deal. You may also encounter contruction costs and time will probably lapse from the moment you take title and finally are able to sell the property. But the rewards for a wholesale deal done right may actually be in the tens of thousands.
When you act as a bird dog, you simply put a property under contract and then assign the contract to a third party. There is much less risk envolved with this scenario, and on a per deal bases you will also probably make less then the investor who will ultimately take the title.
But I would strongly suggest if you are just starting out to explore the possibility of bird dogging some deals first. Not only because of the lesser risk level, but also because you will learn a lot while going the motions of identifying deals.
In my opinion, there is nothing more important that you can learn, then the art putting together a profitable deal. Once you learn that, the rest gets much easier and your confidence level will get much higher.
As far as I’m concerned bird dogging is simply locating the property, taking title to it or putting it under contract makes it wholesaling. Bird dogging is just like what a bird dog does when hunting, points to the bird. The dog does not catch the bird, it merely tells the hunter (wholesaler) where it is. Let’s not confuse people and twist definitions around and change them to things they aren’t, it’s hard enough for the newbies to wrap the heads around all the terms as is without giving them contradictions.
Definitions from the REICLUB glossary:
Wholesale - to contract a property with the intention of reselling it quickly at a higher price.
Bird Dog - someone who identifies a potential good real estate investment opportunity and passes that deal on to another investor for a fee.
Hey Rich,
Thanks for the clarity. That was my understanding of those terms. Any and all advice sent to me on wholesaling is and always will be appreciated. :biggrin