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How do you turn a bird dog deal into a wholesale deal?

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Dan Krause

Michigan

Mar 27 '10, 01:35 PM


:pup: Can this be done? Thats where i am at right now.I have 2 (maybe 3) active deals being reviewed By 2 different buyers and two different sellers.I found properties my buyer/investors were looking for and now i am kind of apprehensive because of the whole uncertainty of local real estate laws (even though the sellers and buyers are in seperat states) concerning finders fees (bird dogs).. No written contracts were exchanged at least on my part yet and a couple of the buyers are sure they want to close a couple of these properties.Is there anyway i can turn this into a wholesale deal at this point? Since there don't seem to be any local or federal laws preventing real estate wholesaling.I'd hate to give up on a good commission that has been offered to me-wouldnt you? Any advice would be appreciated. Thanks, Dan


Edited Jun 26 2010, 12:15


Matt Kearney

Real Estate Investor from Springfield, Massachusetts

Mar 28 '10, 01:21 AM


Hi Dan,
To wholesale them you'd have to put each property under contract yourself, then assign or doubleclose them and make your money that way.

I pay investors referral/ bird dog fees all the time, I don't think you are doing anything illegal.


Edited Jun 26 2010, 12:15


Dan Krause

Michigan

Mar 28 '10, 03:23 AM


Matt: What state are you in? Because i always get a brage of replies on here telling me that for an unlicensed person (bird dog) to recieve a commission for locating a property is illegal in most states. I contacted a real estate lawyer in my area the other day and he told me that in Michigan property finders cannot recieve a commission (albeit St6ate of Michigan).Granted-these are commercial property deals that are active with myy buyers. Have any of your bird dogs had negative experiences with local laws. Let me know Matt. Thanks, Dan Krause


Edited Jun 26 2010, 12:15


Matt Kearney

Real Estate Investor from Springfield, Massachusetts

Mar 30 '10, 07:14 AM


Sure, you can't receive a commision because you are not licensed, but you can receive a referral fee, or a consulting fee, or any other type of fee you can think of..... just don't call it a commission.

Or you can just put them under contract and assign them.


Edited Jun 26 2010, 12:17


Dan Krause

Michigan

Mar 30 '10, 10:19 AM


Whats the difference between a "fee" an a "commission"? A referal fee, a consulting fee -however isnt a "finders fee" a term most local governments use to describe legitimate and illegitimate real estate sales? Thanks, Dan


Edited Jun 26 2010, 12:17


Brian Haskins

Real Estate Investor from St. Louis, Missouri

Mar 30 '10, 12:35 PM


Of course you could turn it into a wholesale deal. You would just get paid at closing. If your concerned about getting around the bird dog fee in your state see if you can pay them for the lead not the deal. That is how most people get around it.

Brian Haskins


Edited Jun 26 2010, 12:17


Joseph Ziolkowski

Inspector from Alsip, Illinois

Jun 11 '10, 12:02 AM
1 vote


Hi Dan,

If you are already acting in the capacity of a bird dog on these particular deals, and your investors already think that, it might tick them off if you took it a step further and basically scooped them on the contract. In the future, to be a wholesaler, just do the stuff you already do, plus get the property under contract. Simple as that.
As far as finders fees being illegal, that isn't exactly true. What the others were saying is true, however. It's all in what you call it. If you are a serious bird dog, and treating it like a business, you aren't "finding properties" for people per se. What you are doing is selling information. As a bird dog you are an information broker. Companies sell lists all the time. Your lists are just short, specific, and comprehensive. You follow? Hope it helps!


Edited Jun 26 2010, 13:11


Luis Leon

Roofing Contractor from Woodlands, Texas

Oct 08 '10, 11:52 PM


Great stuff!!!



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