How Much Would You Offer To Pay a Bird Dog?

[Peter K.]

I would love the BP Community's advice on a current situation with a gentleman. He brought a deal to my attention and I'd like feedback on what is fair compensation.

I met a man that mentioned he had a deal, but no money to put it together. I'll call him Joe. After talking with Joe a bit, it became clear that he had NO experience, just came off of a Guru course and was out trying to make things happen...which I really admire.

Along with no experience, Joe also has no money and has not tied up the deal. He is so green that he really doesn't know what he wants to do with it. It turns out that it's a pocket listing and Joe, being green has also enlisted the help of his buying agent, so now there are two agents involved in the deal.

I asked Joe what he wants and he was a bit unclear, so I ran the basic scenarios by him.

A. Tie the deal up yourself and assign the contract to me.

B. Bird Dog Fee of $1000 and you should ask for something from your agent buddy.

C. Bring money into the deal for an equity share.

Joe didn't seem too happy, so I told him that this is the typical scenarios out there and everything is negotiable. I think Joe drank the guru Kool-Aid and is expecting to get rich on his first "Deal".

Here are the approx numbers based on research and info from agent, haven't seen the property yet:

Purchase $700K

Renovaton 100K

Misc Costs: 70K

ARV: 950K

Net Profit: 80K (7% of ARV)

I'd love feedback from the community.