Real Estate Professional · San Francisco-East bay, CA · Member since 2013 · 340 posts · 50 votes
When there is cash available and pipeline of investors/funds available, is it worth working with Bird Dogs to get the appropriate deals? What are few things to note when they bring FSBO options? How much is appropriate to offer for their services?
Thanks.
I was speaking to a fellow investor last night at a REI meeting. He recently clolsed a very lucrative deal brought to him by a Bird Dog. She was brand new and he paid her a generous $5,000 (it was a very good deal.) Without her, he would have never found the deal. It was a WIN-WIN all the way around.
I am willing to bet that it won't be the last deal she finds for him. The average person simply never imagines making that kind of money legally for simply passing on information. Unless you have too many deals to work, I don't see much downside here, especially if they send you high quality leads.
Thank you everyone, who wrote on this.
So looks like it does make sense to work with Bird Dog, however how do you know how effective they are? Licensed brokers and agents have websites, and get reviews and stuff. Anything like that for people that does Bird dog.
Also where/how do you find one in a new Area you get into?
I'm joining the conversation late but my experience is very positive using bird dogs or "wholesalers."
I own a brokerage firm in addition to investing and syndicating and I use bird dogs regularly.
There are several regulars who have brought me good deals over the past years on a continual basis and many others who bring me a few worthless leads before disappearing.
If everyone's comments are the norm (excepting Max's REI friend) I seem to be dramatically overpaying. Regardless, my thought is that they are worth every cent if they bring me a deal I wouldn't otherwise have seen. In other words, I'll gladly pay someone $1 to make $2 or $3.
My rules for bird dogs are simple. Don't bring me anything listed on the MLS and you only get paid if I close a deal.
I'm in Los Angeles and invest all over LA and Orange County so our deal size usually falls between $250,000 on the low end to $1 million on the high end. We pay our bird dogs $5k per closed deal.
Our guys know what we look for in terms of a return on our investment so our regulars are pretty good at bringing us more hits than misses.
I hate to generalize, but after doing this for 19+ years my experience has taught me that most people who wholesale have very limited/inaccurate impressions of market value. As always there are exceptions (eg. most of my regulars) however it's imperative as the one putting capital at risk that you do all of your own due diligence before buying anything brought to you.
Having said that, I'd be interested to hear more about Sam's experience trying to do this from overseas...