Using Option Contract to Legally Pay Bird Dogs

[Kalen Houck]

Hello!

I am a new wholesaler that is currently recruiting some bird dogs to look for vacant properties. I am just looking for good fix and flip opportunities that I can wholesale on over to rehabbers.

I am asking them to find the address and take a few pictures, then send it to me (if they happen to get the homeowner's contact info then great!). Then I will go about contacting the home owner, negotiating, etc. I am letting them know that I will pay them between $500-$1000 if the address/deal they send me closes.

I thought that was a brilliant idea until I've read that doing it that way constitutes practicing real estate without a license (I'm in TX). I want to operate legally, so I looked for answers (here on BP and elsewhere).

The 2 solutions I have found (that I like) are to either pay per lead ($2-$6 per lead up front) or to have the bird dog sign on option agreement to become principal in the contract with me and then paying them the $500-$1000 assignment fee.

I like the idea of paying them only if a deal closes. So in getting them on an option agreement....how exactly would that work? Would I have to take them with me to every appointment I go on (that they have sent me the info on) and then have them sign the option agreement on site with the seller (before assigning it to me)? How would that process work?

I'm a little confused and haven't found a specific answer to my question. Any help would be appreciated!

-Kalen