Real Estate Bird Dogs
Real estate bird dogs, or property locators as they are sometimes known, are used by investors to find deals that they might not easily be aware of. Bird dogs typically look for vacant or abandoned houses or FSBOs (For Sale By Owner). Bird dogs are looking for anything that is not already listed on the MLS.
Real estate bird dogs work on a fee basis. They can be paid for each lead generated and receive a bonus for any deals that go through for the investor. In some states, it is illegal to pay an unlicensed person a commission for finding deals. Paying bird dogs for lead generation or even an hourly wage can get around that, but it is best to check with a licensed attorney in your state.
Why do Investors Use Real Estate Bird Dogs?
Investors’ time is best spent negotiating deals, not finding them. With a bird dog feeding the investor leads, he can analyze and negotiate more deals. In addition, having more than one set of eyes looking turns up more potential deals. Depending on how many deals an investor does in a month, he may have one or a whole team of bird dogs working for him.
Don’t forget – some investors are part-time. They may work a full time job and invest in real estate part time. Using real estate bird dogs allows them to outsource some of the more time-consuming work to other people.
How to use Real Estate Bird Dogs in Your Business
To make the highest and best use of a bird dog, you must make sure they understand what a good deal is for you. The more specifics you can give them about what you look for, the better the leads they will generate.
Your bird dogs need to know:
• What areas you prefer
• Type of Property (single family, multi, commercial)
• Number of Bedrooms and Baths for residential
• Square Footage
In addition, make sure they know how much rehab work you are willing to do. You may have to train them in the difference between cosmetic and structural work. But again, the better trained your bird dog, the better off you are.
Be very clear on how you want leads submitted to you. Most investors want the address of the property, a picture from the front , a picture from the back if they can get it, maybe a street view to see what the neighborhood looks like. Owner’s name(s) and any contact information, whether it’s from a FSBO sign or by checking the property on the property appraiser’s site.
Don’t forget that you can use “unofficial” bird dogs. Delivery people, such as UPS or FedEx or even your mailman know of empty houses or when people are moving. Moving companies are another good source of leads. Let people know that you are in the market for properties and thank them appropriately for any leads that pan out.
How Can You become a Real Estate Bird Dog?
For those wanting to “earn while they learn” real estate, bird dogging is a fast immersion in real estate investing: You learn which areas and types of properties investors prefer and why; you learn wholesale, retail and rental values and you also benefit from finding out which deals investors will pass on and why. Whether looking for part time or full time income, or just an opportunity to learn, real estate bird dogs gain real world experience in a risk-free environment.
The best way to get started as a bird dog is to talk to investors, whether at your local investor meeting or investors you have met in the community. Tell them you are interested in bird dogging properties and ask if they are open to working with you. Then sit down with them and get their investment parameters – the areas they prefer, types of properties, price range and amount of rehab they will do. Find out how they want their leads submitted and what information they need from you.
Bird dog fees vary by area and by the information submitted. Some investors pay $5 - $15 per lead. Some only pay if they do a deal that you bring them. Even that fee can vary, depending on the profit margin of the deal. Bird dogs don’t make as much as wholesalers because they don’t talk with the owner and they don’t negotiate the deals. But they can make anywhere from $500 - $1,000 for a deal that an investor acts on.
Whether you’re an experienced investor looking for more leads or you’re new to real estate and eager to learn, bird dogging is a solution for you. Real estate bird dogs are a cost-effective way of finding deals for investors and a great way for newbies to learn the business.