Bird dogging is illegal in this state!

[Randy Thomason]

Just a PSA opinion to people on here that may be newer or just getting started in Arkansas.  I am constantly hearing from people after they have gone to one of these weekend seminars from the Drive Thur Guru's who pitch how to quit your job in 60 days by learning to wholesale.  They tell you to go out and get bird dogs to help you find vacant houses and deals and then you pay them a finder fee for $250 or $500 if you get the deal.  In Arkansas, and most states I imagine, it is illegal.  It is a class D Felony.  In February, I interviewed the Real Estate Commission here about this topic and many others centered around wholesaling.  The bottom line is that you cannot pay anybody a contingency fees, meaning if you pay based upon getting a deal then you are acting as a realtor because only realtors can pay or get paid on transactions based on the deal closing.  

When these seminars come thru town and get you hyped up that you can make tens of thousand of dollars and they "help" you swipe your credit cards for 5, 10 or $30,000 to learn how to do it- RUN!  (Some of them)-They often tell you to do things illegally.  If you get caught it is you who pays the price. Not them.  They have disclaimers about information only and it is on you to know the laws of your state. They are not doing the actual illegal things.

Don't fall for the lines that it is a marketing fee and not a commission. The RE Commission has made it very clear.  You can pay a marketing fee for marketing services If the fee is paid on "every lead." It is not a fee if it is based on "if you get the deal (a contingency)."  And if you pay more than $600 you better be doing a w-9/ 1099 at tax time. 

It seems that some of these traveling money vacuum companies from the Utah areas are the one's pushing the Bird dog teaching the most.  My words of warning to you is, If they tell you one thing that is illegal, what else might they be teaching you that is wrong or could get you into trouble?   

Just my opinions from a person who is a full time investor, runs the largest REIA in the state, former President of the State Landlord's Association, Worked with the Legislature on crafting Bills, formerly a licensed RE agent. But what do I know?

[Joe Villeneuve]

You may be missing one thing here.  The wholesaler, if doing it correctly, isn't "referring" and getting paid.  They are selling an agreement to buy...and they are also not selling real estate.  Selling a contract to buy real estate isn't the same thing.