All Forum Posts by: J. Lamar Ferren

Look Brian,

I respect the fact that you've been in the game for 55 years, but understand that what I do is legal and within the laws of the state(s) I operate in. Plain and simple.

I don't need an investor to tell me that, regardless of how long they've been in the game. I seek attorneys for legal advice. Bottomline.

They know the law better than me and are fully qualified to advise me on that.

I'm sure I don't need to go into detail on what a lawyer is, so I won't even insult your intelligence.

But understand that I'm not speaking for anyone's state or law. As you suggested, everyone needs to do their own due diligence.

I have done my due diligence and always remain IAW the law.

I'm not sure how else to respond. I don't do business according to the "old pro" saying you quoted nor do I agree with it.

As for the legality of birddogging, its a dead issue. My attorneys have advised me that its fine and that's whose advice I'm going with.

Everyone interested in birddogging needs to do their own due diligence and ensure to seek proper legal counsel.

It's not about your personal feelings when it comes to interpretation of the law, it's about what it says and what it means. Follow it!

As for what a new breed investor is... it's simple;

A new breed investor is someone who will not hesitate to take down any deal in the country, without seeing it in person, as long as it is profitable.

It's someone who operates with a sense of urgency, integrity, transparency, authenticity, and a strong posture.

It's someone who is open to creative ways of marketing and investing and is able to easily adapt to changes in the market, without making excuses.

Overall, its someone who understands that they don't have to get it all right, they just have to get it going when it comes to learning this business and taking action. New Breed Investors Live Life On Their Own Terms!

If you disagree with this, then its on you. I have no reason to go back and forth on this with you either. This is who I am and it won't change for anyone. I mean that in the most respectful way possible and hope you don't take offense to my response.

Brian there is something we can agree on, and that is those reading this should definitely move up to wholesaling when the opportunity presents itself. It definitely makes a difference to the business as a whole.

Wow, I cannot believe I missed this post. First off Bill, I'd like to apologize for the late response to your question. I honestly just saw it. Secondly my name is not John. Nice guess though...

Third of all, I would NEVER...let me say that again, MR BILL GULLEY, I would NEVER give ILLEGAL advice to anyone because this is simply not how I conduct business, nor do I want anyone else further ruining the name of ethical investors like myself.

Now let's address the issue at hand because many people try to twist this law. Before I begin I would any and everyone reading this to understand that I am not a lawyer, tax consultant, legal assistant or anything like that. So if you want to verify anything I am saying, then please go seek one or proceed at your own risk. (Which is what I said from the beginning.)

First of all lets look at the Law you mentioned...

Commonwealth of Virginia Code 54.1-2100:

Anyone who, for compensation, sells, offers to sell, buys or offer to buy, or negotiates the purchase or sale or exchange of real estate...leases or offers to lease or rents or offers to rent any real estate or improvements thereon is required to hold a real estate license.

This is what the law says right?

Well a birddog does not:

Sell a home
Offer To Sell a home
Buy a home
Offer to Buy a home
Lease a home
Offer to lease a home
Rent
Offer to rent a home
Negotiate (Even if they tried, the final negotiation piece would remain with the seller and the investor)

All they do is recommend or refer a property that they feel is a really good deal. They do not make any claims to be a principle in the transaction, they do not try and pass themselves off a licensed professional, they do not have any involvement in the real estate transaction itself and therefore will not be at the closing table. Their compensation is paid after the sale or it can be paid for the reccommendation itself.

However, there is a fine line between what a birddog does and what a wholesaler or retail investor does.

Birddogs don't sale properties, they FIND properties for Wholesale or Retail Investors who essentially become a principal in the transaction and either buy the home or assign/flip it to someone else for a profit.

Realtors CANNOT pay birddogs a REFERRAL fee. However, they can pay what is called a MARKETING Fee and as Ken said, there should be an invoice or receipt in place noting that.

Your fee does not get recorded on a Hud-1 (At least I've never seen it that way)

If it did, (which I don't see as neccessary) then I personally think they should annotate it as a marketing fee and that it would be their responsiblity, not the seller's responsiblity.

With that said, birddogs are normally paid after the close and from the investor's profit. They are compensated for their marketing/researching efforts only.

Whenever someone asks me this question, I always put it this way...

If you ask someone to post an ad for you or put up a sign regarding the selling of a home, instead of doing it yourself. They are going to expect to get compensated for the work they do. They did something that generates a visit to your website or a ring to your phone. The only difference with a birddog is that they typically get paid after the closing verus the sign poster who typically gets paid before the closing.

And if that example isn't enough... Think about all the online services that list homes for sale and aid and helping people sell their homes. Some are free and some make you pay for the service. However, they are all advertising and have found properties for you based on their advertising. You mentioned that some have to have license... Ok, but do they disclose that publicly? I personally have never seen a disclaimer in my newspaper say:

Disclaimer: The Washington Post is licensed with the Viginia Board of Realtors...blah blah blah...

I haven't see this disclosed on Craigslist either. One of the largest Online Classified Websites in the world...

Not disclosing this would be illegal, would it not? I mean that's why a realtor has to disclose who they are when they do investment deals.

If I advertise my real estate services and a seller comes to me and I can't help them get the home sold myself, should I not reach out to another investor who could?

Should that investor not be grateful and compensate me for that alone? They're intentions would be to thank me for my advertising services that I have already put my own money and time into and because they want me to continue doing so.

There is a thin line between "Acting as a Realtor" and recommending a property. The thin line also comes into play when someone unlicensed gets compensated. Clearly birddogs are not to be apart of the actual real estate transaction. It's when they go beyond that that they cross the line...

I've signed and have had contracts written by and reviewed by Real Estate Attorneys in Virginia and Maryland who clearly understand what I or the investor I'm dealing with does. They know the law much better than I do and I'm sure would not write something up for me to use legally, if it was illegal...

It does Brian, Thank you!

Anthony, are you referring to property locating/bird dogging?

The only contract involved would be the agreement between the birddog and the investor. There isn't any need for exit strategies or clauses. You're not locked into the deal. There is no risk on your part. The agreement should lay out your responsibilities and how you get paid based upon those responsibilities. If you agree, then you sign it and return it to the investor.

As for speaking to your attorney and not wanting to sound stupid...They get paid to know more about the legal apects of contracts than you, so dont' worry about sounding stupid.

I'd rather sound stupid and fully protect myself than think I sound smart and have poorly written contracts.

Oh and thanks for your insights JCC

Its 8 days to first enter processing...

This is supposed to be a new lender. lol The last one they had was MET Life or something like that and they had to many complications.

I have to follow up with my friend today and see what happened because they very well could have chosen a new lender (third)...

The buyers were about to be on the streets. I forget what happened, but basically they couldn't stay in their current home and they had a short time frame to find another home.

*The only reason I said that they could be trying to prioritize loans is because I can't imagine why it would take 8 days to even begin the process.
*The loan is about $150K so I think that is a pretty good avg number for that area.
*Not sure why it would be difficult.
*From what I understand the buyer has 2 jobs and can show the income necessary to qualify quickly....

Did I post in the right section?

Has anyone heard of a law that says a Loan Officer must hold the Buyer's Information for 8 days before they can attempt to close it?

A friend of mine has been trying to close his home for months and is basically having trouble with buyers getting approved for the loan. Either its on the buyers end and they're unable to qualify or the Loan Officer isn't able to move quick enough and the buyer has to walk away.

In this situation, we have a buyer who is ready to move and from what I hear, they're able to get qualified. It's just that now my friend was told by their new Loan Officer that they must hold onto the buyer information for 8 days before they can process for closing. They said it was a new law.

I've never heard anything like this and I'm wondering if it could be some sort of stall tactic, so they can process other loans that they feel are priority.

If I should know the answer to this, then please pardon my ignorance for today. lol :cool: