Bird Dog - Finding a Real Estate Deal for an Investor Already Looking for a Deal
What does it mean to bird dog a property? Why is this job important for investors? Is this legal and how does a property bird dog get paid? Bird dog is the term used for someone that informally works for a property investor. Whether there is a rehab and resell investor or a rental property owner doesn’t matter. A property investor will “employ” a person to hunt for property. They will provide vital information on “for sale by owner” property and for properties that are in disrepair and may be vacant. The investor paying for this service usually offers a flat fee for property information that eventually leads to property closing.
So how does this work? Some investors promote their need for property bird dogs. They will ask for information on properties. There is usually a set fee for the information. An investor might offer a $200 (example fee, some might pay more) finder’s fee for information relating to the property that is not already advertised in the MLS system. The investor will not pay the fee if the property is already advertised or if the investor decides not to pursue a deal with the property owner.
This is where problems start. Let’s say you agree with the investor that he will pay you $200 for any information that leads to a deal. You go out and find a property for sale by owner. You don’t have to do any investigation or cal the owner. You just pass along the address and phone number of the property to the investor. The investor then does all of the legwork to see if a deal is possible. If the deal is right and the closing occurs then that is great for you. Remember, it might be a month from the time you relay the information and the time the deal is signed.
You have to rely on the investor to in-turn write you a check for your $200 fee after the closing. You will have to trust the investor with the information and then rely on them to pay you after the closing. If this trust is not there you might be unlucky enough to find an investor who doesn’t pay. This is not normal but it could happen. The act of bird-dogging is legal but there is no way to guarantee payment. You cannot be included on the closing forms or listed and an interested party.
You just have to trust the investor. The good news is you can gather the information with very little work and then follow the property until it sells. It could be lucrative for someone that turns over multiple addresses and without much experience or property knowledge. You will probably want to coordinate with your investor to determine which neighborhoods they like and what types of property they are interested in, this will help keep the information you provide relevant and interesting to the investor.
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