So you are a Wholesaler???? Bird-dog?????You Tell Me

[R. Kerry Brooks]

Ok so I have seen a lot of post on wholesaling and bird-dogging and the difference between each. I have been a bird-dog and have wholesaled deals, so I would like to throw my two-cents in the game. Since other have already went in to great details on the difference between the two. I am not going to spend a lot of time on that. It pretty simple-

[b][i]If you are connecting the people that are going to make the deal go you are a bird-dog, don’t worry about negotiating the deal, I do that. Just bring me stuff that fits into my parameters.

[b][i]If you have the property under contract you are a wholesaler. You should already know what a “good deal” is. Be solid on the numbers don’t under/over estimate cost. Present me a clear deal and if it works I will buy it.

What I do want to talk about is how to make yourself, the best at either. Even as a newbie you can still present yourself as a professional that investors will want to work with. Just ask any investor, we all have lots of list and emails/text coming in and the vast majority get a quick look then gone. Then, there are the few that get our attention. We will stop what we are doing and make working that list or email/text a priority. Why??????? Well let’s take a look.

Ok some basics, bird-dogs don’t insult me with some crazy fee. I am not going to pay you 10k(even had some want as much as 30k) to connect me to a deal. I have even had bird-dogs try and take all the profit out of a deal. My average deal will pay a bird-dog 500.00 to 1000.00, that’s it. Don’t try and piggyback someone else’s deal. I had deals that come to me that have three people trying to make a hit off the top, which generally makes it a bad deal. Find your own, do the work, don’t be lazy. Despite what the latest guru has told you, this business is WORK and lots of it! I lose respect for bird-dogs that constantly bring me other peoples deals. Also, know that I already have people in place that are working the mls (agents) and others working (me and my wife) listings in papers and publication. So the odds of you spending 10 min on a mls site and finding a deal I have not already seen is slim. (Notice I did not say impossible, just slim). BIGGEST THING FOR ME IS….. Do not (repeat) do not present yourself to me as a wholesaler when you do not have the property under contract. I had a guy call me the other day on a property that he would sell me for 24k. I recognized the address as one I was making an offer on that afternoon, so I asked him if he had it under contract and he said “yes”. When I contacted the owner he said no some guy had just called him about 5 min earlier and asked about the property, but that was it. Several problems with this, but the biggest one is DON’T LIE, it is a small word in investing.

If you are wholesaling, you should have enough experience in your market that you recognize a good deal and should know how to negotiate and structure the deal. You already have a marketing system in place that includes some of the standard tactics, i.e. direct mail, bandit signs, listings in papers and publications…. You are bringing me deals that you have under contract, and have done some of the due-diligence. A point to clarify here, wholesalers do often bird-dog a deal, you don’t have to make a killing off every deal. Sometimes it is better to help one of your clients, thus building a strong relationship, don’t let greed make you the guy I won’t buy from no matter how good the deal is. But when you are bird-dogging the deal tell me that up front. We all generally do both, making money is making money. Biggest thing I look for in a wholesaler is someone who brings me a solid deal. I really don’t care what they make, as long as the numbers make since for me. In my market I find it rare when you can make huge sums off a deal anyway. If you can it just shows me you are a great negotiator.

In my opinion if you are a newbie take some time to learn the business. Wholesaling is not really the place to learn, you can ruin you creditability or worse your bank account with just a few bad deals. This is not a race It is a journey, though it is ever changing, it never is a bad time to invest in real estate. The biggest thing for both a wholesaler and a bird-dog is this, get to know me your end buyer, how I evaluate a deal (right now ROI is my hot button, ARV or LTV not so much), what areas I like and don't like, how much rehab $$$$$$$ I normally spend on a project and what is my max. Do I buy and hold or flip. Know if I am a person that invest in real estate or am I a real estate investor (there is a difference in what is a deal to each). I'll cover that in the next post, because I think identifying the difference is very important.

Hope this helps, I am very passionate about Real Estate Investing. I have learned a lot of valuable lesion, some from others, some the hard way. I enjoy sharing this information; making you better can never hurt my business, only make the industry better. If you’re new find honest people who will help you grow, and never let a bad experience taint your opinion of this business. There are a lot of crooks out there, learn how to identify them and protect yourself from them. Then align yourself with the ones that will help you, not use you.

[Account Closed]

Thanks for your thoughts on this. I just don't get why wholesaling or calling oneself a wholesaler matters. I don't see the need to identify myself as anything when I have a property to sell. I identify the property i'm selling and tell buyers what I need (price and terms). Wholesale means different things to different people. Some think it means a "wholesale" price, some think it means assignments or double closes, some think it means always selling to rehabbers. I think the sooner we get away from using the terms wholesaling and flipping, the better. If you have something to sell and you sell it for what the market will bear, that's re-selling. And it's retail, no matter the condition, no matter how many escrows, no matter who you sell it to. If you rehab a property and resell it, why in the world would you call it flipping? Flipping was the phrase we used just ten years ago to describe re-sale transactions with no rehab. Rehabbing takes time, skills and risk.

I have relationships with some repeat buyers that have developed over time. They can close fast when I need them to, but they also have the patience to wait out problem escrows. Some have managed properties for me. One supervises some of my rehab work. So, those buyers get first opportunity to bid or we negotiate a good price for them because of the relationship. There's nothing wholesale about it.