How does bird-dogging work?

[Yankees338]

I'm looking into bird-dogging for local investors in addition to building an eCommerce site.

Can anybody help in explaining exactly how bird-dogging works? From what I understand thus far, it is done through tying up a contract and then assigning the contract to somebody else who pays you a finder's fee.

How would I, the one who ties up the contract, avoid becoming responsible for closing on the property and taking control of it myself?

Also, do I need to use an attorney to tie up the contract? Wouldn't that eat up any of the profit I would get from the finder's fee?

My goal with bird-dogging is to gain practice and experience in analyzing properties and to build relationships with local investors.

 

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[lightning]

Yankee,
Here is a good website regarding Birddogging 101 I think you may find helpful.

http://www.biggerpockets.com/articles/bird-dogging101rb.html

That one helped me alot when I was first trying to learn the ropes! Bird dogging for other investors can help you gain ALOT of experience & understanding of how fixer-uppers work, and build up some cash for you to use in the future. A wealthy friend of mine gave me this advice, and told me to remember that NO ONE starts at the TOP. YOU have to pay your dues. But by paying your dues, you gain experience, understanding, and cash.

Good luck.

 

[Yankees338]

Yankee,
Here is a good website regarding Birddogging 101 I think you may find helpful.

http://www.biggerpockets.com/articles/bird-dogging101rb.html

That one helped me alot when I was first trying to learn the ropes! Bird dogging for other investors can help you gain ALOT of experience & understanding of how fixer-uppers work, and build up some cash for you to use in the future. A wealthy friend of mine gave me this advice, and told me to remember that NO ONE starts at the TOP. YOU have to pay your dues. But by paying your dues, you gain experience, understanding, and cash.

Good luck.

Thanks for the response. Rep+++

Did you ever actually do any bird-dogging, or was it just something you looked into? I actually read that article on another site (same post by the same guy, though). Definitely helped me a bit. While I was Googling "bird dogging", I found an article by John T. Reed (whom many here are not too fond of from what I understand) stating that bird-dogging is illegal -- he even mentioned NJ (where I live) specifically based on what the laws were when he was an agent here.

My family friend is a real estate attorney. I might send him an email tonight asking for this to be verified.

 

[bflash98]

You also might want to check out shauns blog. He has some excellent information on how to bird dog:

http://shaunsre.blogspot.com/2004/10/step-by-step-guide-to-buying.html

 

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[Yankees338]

You also might want to check out shauns blog. He has some excellent information on how to bird dog:

http://shaunsre.blogspot.com/2004/10/step-by-step-guide-to-buying.html

Excellent, thanks! Rep+++!

 

[lightning]

I havent closed any deals yet bud, but it is something I have been reading about for awhile now. I am fortunate that a friend of mine knows the real-estate ropes quite well, and him and I have been talking about working a deal together for over a year. (he is actually the one who started teaching me about birddogging and the benifits of setting up deals for other investors). While learning from him in the meantime, I have gained some experience, and it is always interesting to hear his perspective on why one property is a great deal, why I should walk away, what options are available when Im ready to pursue, etc.

Best of luck!

 

[I85]

Also, do I need to use an attorney to tie up the contract? Wouldn't that eat up any of the profit I would get from the finder's fee?

If you are bird dogging, you won't need this. You simply inform potential buyers of the property...if one of them buys it then they pay you whatever was agreed upon.

How would I, the one who ties up the contract, avoid becoming responsible for closing on the property and taking control of it myself?

I wouldn't go getting contracts if you don't have a good size buyers list, and/or the money/financing to buy the property. Also, it's gonna be pretty hard to tie up a contract at 17 . Anyhow, you can use many clauses in the contract, if the owners agree. Partner must like property, inspection, financing, etc.

Can anybody help in explaining exactly how bird-dogging works? From what I understand thus far, it is done through tying up a contract and then assigning the contract to somebody else who pays you a finder's fee.

Sounds more like wholesaling to me. From what I have read, a bird dog will simply pass deals along to other investors. They do not tie the deals up.

I'm not sure if you have read these or not....
http://www.reiclub.com/real-estate-articles.php

 

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[Yankees338]

If you are bird dogging, you won't need this. You simply inform potential buyers of the property...if one of them buys it then they pay you whatever was agreed upon.


I wouldn't go getting contracts if you don't have a good size buyers list, and/or the money/financing to buy the property. Also, it's gonna be pretty hard to tie up a contract at 17 . Anyhow, you can use many clauses in the contract, if the owners agree. Partner must like property, inspection, financing, etc.


Sounds more like wholesaling to me. From what I have read, a bird dog will simply pass deals along to other investors. They do not tie the deals up.

I'm not sure if you have read these or not....
http://www.reiclub.com/real-estate-articles.php

Rep+++ for the response! That was the original article that I read; it's actually the same thing as what lightning posting but on a different site.

Should I get a list of potential buyers together first, or should I scope out some good deals first?

 

[NoMoneyDown]

Rep+++ for the response! That was the original article that I read; it's actually the same thing as what lightning posting but on a different site.

Should I get a list of potential buyers together first, or should I scope out some good deals first?

Go to your local REI club and network. Look in the local newspaper or FREE circular (Green Sheet, Thrifty Nickel) under "Homes Wanted" and call. Call the "We Buy Houses" signs. Get to know who the players are and their needs (different areas, different types, different price ranges, and so on). Find out who are seasoned investors and who are newbies.

Also, check out http://creonline.com amd http://reiclub.com for some FREE articles and lively discussion about RE investing.

 

[Runum]

I would definitely get your investor network set up first. You need to know what each one is looking for. You need to know their likes, dislikes, quirks, docs they need, availability to you, etc. I agree, network at an REI club. Good luck Ryan.

 

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[tbsells]

I wouldn't let John T. Reed talk you out of anything. He's overwhelmingly negative on most topics and people. He does seem to be knowledgable but from a "glass half empty" perspective.

 

[bflash98]

You should find your investors first so that you can find out what deals they are looking for. Find out what types of units: duplexes, SFH(2bed,3bed),condos, townhomes, what locations they are interested in, what % of FMV are they looking to purchase homes for and what level of fixing are they willing to do.

With this information you can concentrate on the type of houses they want and you will know what numbers they will need to see to pull the trigger. More than likely they will be busy people so they will appreciate you bringing deals that are well researched and what they are looking for instead of everything that you find.

I hope that makes sense. A friend of mine has started to do this work and has been very successful.

Rep+++ for the response! That was the original article that I read; it's actually the same thing as what lightning posting but on a different site.

Should I get a list of potential buyers together first, or should I scope out some good deals first?

 

[I85]

Rep+++ for the response! That was the original article that I read; it's actually the same thing as what lightning posting but on a different site.

Should I get a list of potential buyers together first, or should I scope out some good deals first?

I would concentrate on networking and building your buyer list first.
You can have all the deals in the world lined up. However, if you have no buyers, you will not be making any money.

 

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[Bilgefisher]

Yankee,

Ive never bird dogged, but I have dealt with 1. Basically we would just pay a finders fee to someone if they found a buyer for our house we flipped. The neighbor of a the house we were flipping knew a lady that was a potential buyer. He was into gas powered model planes. If she closed we were going to buy a model airplane for him. Cost about $700-1200.

I know your looking at the finding deals side of bird dogging, but finding a buyer for a seller can be just as big. Just some food for thought.

A side note: When flipping a house, talk to the neighbors, let them know your just a normal guy and you are willing to give a finders fee for them locating a buyer. Its a win/win/win. You sell the house, the neighbor gets good amount of cash, plus they know their neighbor already, which can really help out the neighborhood. Sorry for the slight derail.

 

[Yankees338]

Thanks for all the replies everyone!

I think I'm going to get a list of investors together first. What do you all think about starting with an ad on Craigslist?

 

[I85]

Yankee,

Ive never bird dogged, but I have dealt with 1. Basically we would just pay a finders fee to someone if they found a buyer for our house we flipped. The neighbor of a the house we were flipping knew a lady that was a potential buyer. He was into gas powered model planes. If she closed we were going to buy a model airplane for him. Cost about $700-1200.

Is that legal?

Thanks for all the replies everyone!

I think I'm going to get a list of investors together first. What do you all think about starting with an ad on Craigslist?

It would be free and take very little time, so I don't see any harm in trying.

I would also call up anyone advertising on craigslist, your paper, tv, bandit signs, etc. Also go to your local REI club, if you have one near.

Have you looked at this list before?

http://www.reiclub.com/real-estate-clubs/New Jersey.html

 

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[Yankees338]

It would be free and take very little time, so I don't see any harm in trying.

I would also call up anyone advertising on craigslist, your paper, tv, bandit signs, etc. Also go to your local REI club, if you have one near.

Have you looked at this list before?

http://www.reiclub.com/real-estate-clubs/New Jersey.html

Yeah, I saw it awhile back but never joined one. I should definitely look into it this summer. Thanks for reminding me!

I think I'll put up something to get some interest from investors. I think I'll leave out that I'm a high schooler for now -- might turn them off.

 

[I85]

I think I'll put up something to get some interest from investors. I think I'll leave out that I'm a high schooler for now -- might turn them off.

While that is something I wouldn't just randomly throw out, I wouldn't let it discourage you. As long as you can make them money, they aren't going to care if you are 8 or 80.

Yeah, I saw it awhile back but never joined one. I should definitely look into it this summer. Thanks for reminding me!

There is no time like the present .

 

[Runum]

Yeah, I saw it awhile back but never joined one. I should definitely look into it this summer. Thanks for reminding me!

I think I'll put up something to get some interest from investors. I think I'll leave out that I'm a high schooler for now -- might turn them off.

Ryan, REI club meetings are usually once or twice a month. If you commit to "looking into it this summer" the summer will be gone. You need to find one and know where, what day, and when the meeting will be. Put it on the calender and be there.

Also, the REI group in my area has FREE beginners breakfasts every Sat. morning just to get to know people. Usually 10-15 people show up, very informal.

Summer is HERE dude.:icon_super: Get with it.:fastlane:

 

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[Runum]

Oh yeah, you will be nervous at your first REI meeting. So what. Everyone will know it's your first meeting. So what. I think when you step in the door and start shaking hands and talking with people you will impress them. Show them that wisdom and energy that you show us and you will have them all envious of you. Be bold. Good luck.:cheers:

 

[Yankees338]

Ryan, REI club meetings are usually once or twice a month. If you commit to "looking into it this summer" the summer will be gone. You need to find one and know where, what day, and when the meeting will be. Put it on the calender and be there.

Also, the REI group in my area has FREE beginners breakfasts every Sat. morning just to get to know people. Usually 10-15 people show up, very informal.

Summer is HERE dude.:icon_super: Get with it.:fastlane:

Oh yeah, you will be nervous at your first REI meeting. So what. Everyone will know it's your first meeting. So what. I think when you step in the door and start shaking hands and talking with people you will impress them. Show them that wisdom and energy that you show us and you will have them all envious of you. Be bold. Good luck.:cheers:

You're right. I just looked into the closest club to me, and they meet on the 4th Wednesday of every month from 6-9:30PM and the day before at the same time. That would be next week, but I have baseball games at 5:45 on both nights. I'll see when the other groups meet.

P.S.: Rep+++ for keepin' my a$$ in line!

 

[Yankees338]

I just threw up two ads on Craigslist targeting investors in my area. I'll see what kind of response I get.

Once that is done, I'll begin looking for prospective deals that will fit the criteria given by the investors.

I posted that I'll be looking for between $500 and $1000 for the deals. Do you think that's fair?

 

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[Runum]

Congrats Ryan. I think your fee is low but it is a start. I hope you catch some attention with your ad.

 

[PurEnergy]

Your buyers list will probably consist of landlords and guys who rehab and sell. You'll need to know what a good price is to these guys on each type of house and how much repairs cost. The less repairs the better but some don't mind doing more work if the price is right. You'll need to be able to differentiate the difference between a rental neighborhood and one that's right for rehabs. A good general rule to follow is to buy at 60% after repaired value. Every market is different though and especially right now.

You asked about bird dogging but what you describe is wholesaling, which is actually putting the property under contract and flipping it. If you put it under contract, make your offer subject to your partners approval and make it within ten days. If you can't sell your contract within ten days, something is probably not right and you are wasting the sellers time now. You can always extend the 10 day period with the option to extend it for a certain dollar amount like $100 or $500. Add it to your contract.

What I don't like about wholesaling is the lack of control over the deal. Most people when they talk about wholesaling, it means they have no intentions of actually buying the property. I've had too many people go around me and buy directly through the seller. These are the guys who will tell you what you want to hear and then scam everything they can behind your back. Be aware that these guys are out there and they are looking for you. When bird dogging you have even less control and you are operating based on trust only. I don't trust too many strangers and I've had people I've known for years cut me out of a deal.

Here's my number one suggestion when wholesaling. If an investor says he likes your deal, he should be willing to put up at least a $1000 non-refundable deposit. If he will not, he is not your guy and he is thinking of a way to steal your deal in all likely hood. Assign your agreements.

Don't deal with investors who are going to TRY to get a bank loan. Forget it. Only deal with people who have the money ready to go. I'll say it again, DO NOT deal with investors who have to get a bank loan. Unless, you have prearranged with a bank to get loans for investors.

Good Luck

 

[Yankees338]

Your buyers list will probably consist of landlords and guys who rehab and sell. You'll need to know what a good price is to these guys on each type of house and how much repairs cost. The less repairs the better but some don't mind doing more work if the price is right. You'll need to be able to differentiate the difference between a rental neighborhood and one that's right for rehabs. A good general rule to follow is to buy at 60% after repaired value. Every market is different though and especially right now.

You asked about bird dogging but what you describe is wholesaling, which is actually putting the property under contract and flipping it. If you put it under contract, make your offer subject to your partners approval and make it within ten days. If you can't sell your contract within ten days, something is probably not right and you are wasting the sellers time now. You can always extend the 10 day period with the option to extend it for a certain dollar amount like $100 or $500. Add it to your contract.

What I don't like about wholesaling is the lack of control over the deal. Most people when they talk about wholesaling, it means they have no intentions of actually buying the property. I've had too many people go around me and buy directly through the seller. These are the guys who will tell you what you want to hear and then scam everything they can behind your back. Be aware that these guys are out there and they are looking for you. When bird dogging you have even less control and you are operating based on trust only. I don't trust too many strangers and I've had people I've known for years cut me out of a deal.

Here's my number one suggestion when wholesaling. If an investor says he likes your deal, he should be willing to put up at least a $1000 non-refundable deposit. If he will not, he is not your guy and he is thinking of a way to steal your deal in all likely hood. Assign your agreements.

Don't deal with investors who are going to TRY to get a bank loan. Forget it. Only deal with people who have the money ready to go. I'll say it again, DO NOT deal with investors who have to get a bank loan. Unless, you have prearranged with a bank to get loans for investors.

Good Luck

Great, great advice. Speed+++

As of now, I'm leaning towards the bird-dogging route because I feel that that is more realistic considering I'm 17 and can't legally put anything under contract by myself.

I don't want to have to get my parents involved, so this is probably the easiest way. I'll definitely work on getting a deposit, too. I like that idea a lot. What kind of written guarantee could I give them to assure that it's a non-refundable deposit, and I'm just using it to cover up my a$$?

Thanks again for the posts, Greg and Pur.

 

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[PurEnergy]

I've never really pursued bird dogging but I've done a good bit of wholesaling. Since you are not going to have any property in your control and under contract...I would say it's going to be all about the relationship you have with the investor.

It's not that you need to be sucking up to anyone but rather you need to know that this is a person you can trust. You need to feel for some legitimate reason that you can trust that person. Something like a referral from others that this person is legit would be good. It's going to be tough to make that call but there are legit people out there. Many if most will not be the guy or gal you are looking for.

Again, the key is trust and the ability to close on your deal. You find a real deal at 60% and I can almost guarantee you'll find who you're looking for. If you bring these guys houses in the war zone and tell them it's a great rehab candidate they will not take you serious.

Find out what they are looking for and where...then go find it.

 

[Yankees338]

Thanks for all the advice!

I just got off the phone with a guy I found on Craigslist. He advertised that he pays cash for any properties in any condition. After speaking to him, it's not exactly him that pays the cash, but he has investors who he finds the deals for. I actually believe he's kind of a bird dog for them, but he has an established network of investors that he works with.

Anyway, he said he'll start off paying $500 for the first deal, and then more and more as I begin to find more deals. I'm thinking that Craigslist will be my biggest asset on this journey with the wealth of listings they have available and the easy search options they offer.

I still don't know whether or not this guy is legitimate, but I have a pretty good feeling about him. We started talking about investing in general, and it seems that we have similar philosophies. He wants to invest a lot in the future as well, potentially full-time. He was also surprisingly receptive when I told him that I'm 17. His first response was, "I'm jealous." Then, he asked if I'd read Rich Dad, Poor Dad, thinking that that was what sparked my interest. I told him I had, and he was impressed.

I'll be looking for deals for the next few hours now, and I'll probably go check out anything local that I find. Thanks again for all the help!

 

[Runum]

Oh yeah! Great job Ryan. :fastlane: +++speed for taking action.

 

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[Yankees338]

Oh yeah! Great job Ryan. :fastlane: +++speed for taking action.

Thanks, Greg!

Update: I've been speaking with the guy I originally contacted on and off. I sent him a few deals today. Hopefully, one of them will work out. If not, there will always be others.

I also finally got a response in regards to the ad I posted on Craigslist. I just replied a minute ago, so I'll see what his response is when I let him know what the deal is. He also asked if I'd be able to do any handy work for him. I offered to do painting or basic landscaping, but I don't think I can legally do any hard, physical labor being underaged.