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Bird Dog- how to find/what to pay
Hi Everyone
I'm new to RE investing. I like the idea of bird dogs. Curious to get some insight on successful ways to find good bird dogs, and then what pay structure you have found to work well?
Thanks for any help you can give!
Josh Reynolds
This is a great question and would like to know the answer too. I have a friend (actually acquaintance) that successfully uses bird dogs, but he won't give me this information.
I have actually found a couple of bird dogs right here on bigger pockets. Another great avenue is to go to your local REIA meetings. These things are made up of primarily wholesalers, bird dogs, brokers, and agents. So it's a great place to be for any investor. Also when you see a bandit sign that says "WE BUY HOUSES" guess what!?!?!? You've probably just found the phone number for a local bird dog or wholesaler!
Cheers to finding that next great deal!
I'm willing to pay $500 for anyone who hooks me up* with a deal. (it hasn't happened yet, but it's right on my card and I tell every landscaper, attorney, mail person, barber I talk with )
*I close
I've offered 500 to local mailmen/women, UPS drivers and fed ex drivers . there the ones on the dead end streets and areas that aren't out in the open. I approached them while driving for dollars , told them who I was what I do. And if you know anyone in the town hall, building inspector, water dept etc, my phone is ringing and I'm getting E-mails, the hard part is tracking down the owner!! Getting to the owner before it goes into foreclosure is huge. door knocking can be scary but I do it, give my card to neighbors let them know I want the property next door and If they see the owner can they give them my card..
HAPPY INVESTING!!!
Thanks guys. I really appreciate the responses. alot of good ideas. Have you ever heard of or considered paying per lead? I've heard if investors paying maybe $5-10 per lead, where a lead is somewhat qualified... maybe a vacant house with no sign in front, that sort of thing...any thoughts??
Love the Gretzky quote @James Mudd :)
Here in Dallas most of the bird dogs have a written agreement with investors whom they get paid at closing.
Joe Gore
I have no problem paying for A lead, but I'd like to close on it.. My birddog's understand what I'm trying to do
A couple comments. "Finders" act as independent contractors, and if payment in a tax year is over $600, then you should be collecting a W-9 and filing a 1099-MISC. If you are a licensed broker, make sure you know the rules in your state for compensating unlicensed finders. There is generally nothing wrong with an unlicensed paying for information (contrary to what some licensed brokers may tell you, because they abide by different rules relating to brokers) but be careful on the extent of their involvement in the deal.
My preference is to not have any finder's fees paid at closing. My company doesn't even want them recognized as paid outside closing (POC) on a HUD-1. Perhaps @Steven Hamilton II can verify, but I think the intent is we don't want to capitalize finder fees that (I believe) will happen if they are identified as buyer paid on the HUD-1. We write checks prior to closing and expense these in the tax year incurred. Ditto with all other due diligence expenses that are not paid as a line item on the HUD-1, but prior to closing.
That is a good thought, but most bird dogs don't trust investors to pay so it is always better to put it in writing between both parties what fee the bird dog will get.
Joe Gore
I have two types of bird dogs.
1) The traditional way where they drive around and look for houses, take pictures, etc. I created a web based software so they can enter the property information and upload pictures. I can also update the statuses of the deals (color coded) so they can see what's going on. This keeps them involved because they know when a deal is going to close and they are getting paid.
2) The new type of bird dog is even better because we just pay to place an advertisement on their back windshield ... WE USE AN ANALYTIC TRACKING NUMBER THAT IS ASSIGNED TO THEM. These calls get recorded and bird dogs can pull monthly reports. This tracking is what keeps them involved. We capture them through the squeeze page that is built into the software by advertising on Craigslist, or sending direct mail to service type companies like lawn maintenance, pest control, mobile computer repair, etc. We also mail to divorce and probate attorneys. We pay them 10% of net profit and can pay them through Paypal using the software but I prefer to meet them at Starbucks and record a video giving them a check. We take that video and put it on the squeeze page for social proof. Then we get their friends family and neighbors who want to place the ads on the rear winshield of their vehicle! We found that the rear get 2-3 times the calls that ads on the side of the vehicle get. We pay the sign company $75 per vehicle and the tracking number costs $1 per month and .02 per minute. We use those tracking numbers on all of our direct mail campaigns too. I hope these ideas help anyone looking to set up an army of bird dogs. THESE LEADS HAVE VERY LITTLE COMPETITION! Plus, unlike other types af advertising, this is a one-time cost and the ads keep getting seen for a long time.
Paying Bird Dogs based on the sale of a property they refer you to is illegal in Ohio where I'm at. Apparently that is considered 'Real Estate Brokering' and paying a referral fee is a right only a broker or agent has earned.
I pay my bird dogs per lead they bring me. This is called 'Information Brokering' and is perfectly legal.
The Realtors' cartel has done a good job of making any appearance of brokering i.e. bring together a buyer and seller, illegal. I would not call it "information brokering"; rather information research. You can run a Craigslist ad "seeking someone to research neighborhood properties, county records, and court records. Need a car, camera/smartphone. Pay based on information researched." Pay based on the amount of research you have them do - Level 1, just take pictures and give you the address. Level 2, add research county Recorder's and Assessor's records. Level 3, above plus research Superior court records for probate information. Never use the term "bird dog." It's a red flag to Realtors who search that term. When someone responds, state they will drive neighborhoods to identify various types of properties and [possibly do basic research of the county records. Tell them they will never contact property owners. (It's a true statement but necessary because you will have some real estate agents call to get information to file a complaint that you are using an illegal broker.)
There are several bird dog "systems" out there. One I use is Cameron Dunlap.
Originally posted by @Josh Reynolds:
Hi Everyone
I'm new to RE investing. I like the idea of bird dogs. Curious to get some insight on successful ways to find good bird dogs, and then what pay structure you have found to work well?
Thanks for any help you can give!
Josh Reynolds
Hi Josh,
Bird Dos and wholesalers are one of our main sources of inventory.
We usually pay a finders fee of between $500 - $1,000 for every property we buy.
The fee is payable via check when we close.
Thanks and have a great day.
Originally posted by @Account Closed:
@Chris Martin,
That is a good thought, but most bird dogs don't trust investors to pay so it is always better to put it in writing between both parties what fee the bird dog will get.
Joe Gore
Your assumption that we don't put things in writing is incorrect. Everything is in writing, along with a W-9 (that we 1099-MISC). Per my post, We don't pay at closing, we pay before closing. Similar with wholesalers... we prefer to buy their contracts and not have that on the HUD-1.
Originally posted by @Christopher Olson:
Paying Bird Dogs based on the sale of a property they refer you to is illegal in Ohio where I'm at. Apparently that is considered 'Real Estate Brokering' and paying a referral fee is a right only a broker or agent has earned.
I pay my bird dogs per lead they bring me. This is called 'Information Brokering' and is perfectly legal.
I'm not a legal expert, certainly not in Ohio. I am familiar with posts on BP about Ohio. I've posted on some.
A 'bird dog' is not a broker. That's basically by definition. Not a broker in Ohio, not in NY, not in any state in the US. A 'bird dog' is a 'finder'... and while there are clear cases of advertisers overstepping their bounds into brokerage (http://caselaw.findlaw.com/il-court-of-appeals/1546961.html) there are also (many not so clear) cases where a 'finder' is not a broker (http://law.justia.com/cases/new-york/other-courts/2010/2010-20104.html).
I would encourage anyone to browse the last link for 'finder' and also to look at the section 'Quality and Quantity of Services', 'Fiduciary Duty', 'Differences in Entitlement to Fee'. These sections compare and contrasts a 'finder' (bird dog) with a 'broker'. Read this for information purposes only, since (like all court cases) your actions are unique to you and the results of this case may not apply to you ;)
Not legal advice.
@Robert Davidson
What other bird dog systems are out there? I have one I'm developing now and I wasn't aware there were others. I wonder how mine stacks up
@TimHerndon
I am interested in the the software that you have created. Can you provide more information on it or is it for sale?
Hello everyone,
I've only had a few leads come from "bird dogs", however I thought I might chime in. I think their payment really doesn't matter as much as having the numbers work for the investor (you). An example of this. I had a birddog call me about a fire-damaged house he could get for $40k that was worth 325k. He was upfront about the purchase price and was firm at wanting $10k. Keep in mind this guy didn't know what an option was at the time. I gladly paid him the 10k and later showed him how to protect his potential deals in the future from others. He has been trying to bring me deals ever since.
I think a majority of people forget about the deal after the deal. Sometimes when you take care of someone when you don't neccesarily have to you gain them as an ally. Our contractors, appliance installation people, and carpet installers love us. An extra $20 tip goes a long way and they remember that when they come across a house that might be a good deal later on.
As for paying for leads, I feel like that is counter productive. The only leads you want to pay for are "good leads", (Equity, owner finance, cash deals, etc) and most people don't know a good deal when they first start out. Once they learn they become wholesalers. I'd rather pay a few thousand for a fish then $5 for a lead they couldve sold to someone else too.
Hi.. Does anyone know if the Bird Dog gig is illegal /unethical CT or MA? Looking to become one. Thanks
Hello! I am a bird dog in CT. I work on the side for banks and mortgage companies as a contact t inspector for houses that are vacant or are in pre-foreclosure. I also take note of vacant or boarded up houses. send me a message if you would like my leads
Hello Marisa- I'm looking to get some real experience in the investor world and bird dogging looks like a good place to start. How did you get your gig here in Ct.? I know I would be considered competition, but maybe woman to woman you could give me some pointers? Do you attend the local REIA meetings? If so which would you most recommend?
Thank you!
These are the possible ways on how to find real estate Bird dogs.
1. Network at your Local Real Estate Investor Association meetings.
2. Use online ads such as Craigslist
3. Ask your family friends, and neighbors
I'm a real estate bird dog in Chicago vacant/boarded up houses and pre-foreclosures.