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Why the Concept of Being a Real Estate Bird Dog is a Scam…

by Clay Huber on July 19, 2013 · 44 comments

  
Bird Dog Real Estate

That’s right. I said it. S-C-A-M.

If you are unaware of what a bird dog actually is, here is a definition I found from Investopedia.com:

A real estate investing term that refers to someone who spends their time trying to locate properties with substantial investment potential. Usually, the intent is to find properties that are distressed and selling at a discount that can be repaired or remodeled and sold for a sizable profit. Sometimes, however, the term is also used to refer to people who find underpriced properties that would make good income (rental) properties.The term itself is a reference to hunting dogs that would point to the location of birds and then retrieve them once the hunter had shot them.

This definition may sound familiar to another strategy (good eye!), but I don’t want to cross that bridge quite yet. Let’s first talk about a few different other things. The reason I am calling the concept of being a bird dog a scam is because it is one of the favorite sales pitches of those real estate gurus. I’m sure you’ve heard it before…

No money needed and No risk… all you do is collect your finder’s fee.

It’s time now to deconstruct this sales pitch. I will do this in sections, and then wrap things up showing just how sly these gurus can be.

Problem #1: You Need to Produce Deals

While I understand this is completely obvious, many over look this simple point. In order to collect the classic “bird dog fee”, you need to bring something of value to your end client: the real estate investor. Herein lies the problem.

I’m going to use personal experience from this. I’ve had numerous people contact me who ask if they can be a bird dog for me and locate deals. It’s no risk to me since I would never pay until I had a deal in hand, so of course I’m going to say “Yes, I’d be happy for you to be a bird dog for me”. I’ve had people from both in my area, and then out of my area (in fact, some that are in different states!) request to be a bird dog. No matter where they are from, they all have produced the SAME exact result.

This result has been so consistent, that now when people ask if they can be my bird dog, I have a boilerplate response I give them, and so far 100% of them I’ve never heard back from. So what is this result?

They send me listings from the MLS. Bluntly put, this brings NO VALUE to the table. I am a licensed real estate agent, so the MLS is my home. Even if I wasn’t though, anyone can log onto a local Realtor site and do a search.

Bottom line: you need to bring value to your client and surfing the properties that everyone and their brother have access to is not going to add any value.

Problem #2: The Risk of Locking in Payment

Let’s say you do find a deal for someone. How exactly are you “sure” you will be paid. As much as I wish I could say a “hand-shake-agreement” would be good enough, unfortunately in this day and age, those sorts of agreements aren’t worth too much.

You’ll want a good contract. In order to have a good contract you’ll need a good attorney. In order to get a good attorney you’ll need money… hey wait! I thought this strategy said no money needed?!?!?

Keep reading…

Problem #3: The Semantics Game

Earlier in the article I hinted that you may have thought the definition I posted sounded like another well known real estate investing strategy, in particular: wholesaling. It is my contention that “bird dog” is just a new phrase used by people trying to sell courses so that they can avoid the word “wholesaling”.

As people begin to realize “wholesaling” does indeed take money, there needs to be another avenue for people to imply “no money needed”, and that seems to be this whole bird dogging concept.

In reality, in order to be a valuable bird dog, you need to find solid deals. In order to find solid deals, you need to market for them yourself and negotiate with the motivated seller…. so that, when you bring the deal to your end client, they will be more than happy to pay you. On top of this, to ensure you get paid, you will want some sort of mechanism that protects you.

To recap…

  1. Need to do marketing yourself to find properties and motivated sellers (sounds like a wholesaling gig)
  2. Need to turn these properties into actual deals by negotiating with seller (sounds like a wholesaling gig)
  3. Need to eliminate the risk of not getting paid, and a good way to do that is to charge a fee to assign your interest to someone else (sounds like a wholesaling gig)

Do you see where I’m going? You can’t be a good bird dog without doing the steps above, and these steps are just describing what a wholesaler does.

Conclusion

There is no way to enter into real estate and make money without spending money. Unfortunately, sending real estate investors properties already listed on the MLS and then trying to collect a finder’s fee is going to be quite the daunting task.

I’ve seen some people say they pay their bird dogs to go and take pictures and such of properties; however, I’d argue that is the incorrect use of the “definition” of a bird dog. I’d say paying someone for that sort of thing is more like a “real estate assistant” job, not “bird dog”.

The point I hope I’ve driven home is that if you are planning on being a bird dog, you might as well plan on becoming a wholesaler since the only way you will ever be able to become a quality bird dog is by using wholesaler techniques.

Despite what those trying to sell courses may say, there is no such thing as an “easy – no money down- real estate strategy”… bird dogging included.

Photo: Vince Viloria

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{ 44 comments… read them below or add one }

Karen July 19, 2013 at 5:42 am

One term that has sounded interesting to me is “driving for dollars”…. but time and gas aren’t free either!

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Clay Huber July 19, 2013 at 9:19 am

EXACTLY Karen. If someone thinks it takes zero money to drive for dollars, then they’ll have a rude awakening when they look down and see their fuel gauge needle right next to “E”.

“Driving for dollars” can be a great strategy, but that is one of many strategies that a WHOLESALER uses.

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Dan Breslin December 2, 2013 at 10:18 pm

I believe the article raises some valid points, however being a Bird Dog is a great first step for a new investor to get around the business.

Being a Bird Dog is like “sweeping the floors” or being the “busboy” in the real estate investing world-it is a place to start and get you in position to observe the way the business works. It can be done with minimal money-like band-it signs or driving for dollars-and give you the opportunity to ask questions and get advice from experienced investors in your market.

The second step for someone without much money is wholesaling. You should move as fast as you possibly can from being a bird dog to wholesaling real estate deals.

I started in the business with NO MONEY-I had to have my dad drive me to do my first wholesale deal-I even brought my 5 year old daughter with me ( I was 26 and unemployed at the time). I earned a $6,000 assignment on that deal and more importantly the proof that this business works-even on a small budget. It was a $69 weekly newspaper ad that produced that deal.

Since then, I have completed more than 100 deals and only 1 was listed with an agent. I just sold that one Realtor property and LOST MONEY!!. Every other deal I have completed were directly with the owner (closing 3 this week)

I do a TON of online and offline marketing to buy directly from Sellers, but I also spend as much time as I can coaching new bird dogs & wholesalers.

Most of the deals I close these days are brought by referrals from my “Bird Dog Apprentices”-my wholesalers in training. In fact all 3 that close this week were my “Bird Dogs’ Deals”.

Even though I have a few successful Bird Dogs in my stable, I also receive many, many calls from the “Seminar Grads” offering to bring me deals, add me to their buyers list, and send me leads. Although I don’t hear from most of them, I have closed my largest deals to date from those exact calls.

Beside the deals I do, I was once that “Seminar Grad” blindly crawling, fighting, & calling my way into the World of Real Estate Investing.

To help educate the BRAND NEW BIRD DOGS that do call, I send them to download a free course which describes some of the things I need them to look for. It gives an introduction into what we, as real estate investors, are looking for. You can check the course out at http://www.BirdDogApprentice.com

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adam July 19, 2013 at 9:53 am

Ya I definitely agree with your article. If it takes $1500 – $5000 in marketing costs to locate each deal, and your getting a $1000-$2000 bird dog fee, this isn’t going to be a money maker.

I think in reality bird dogging happens more between 2 experienced investors, who thru their marketing find deals they don’t want and just want to recover some of their expense.

Maybe the gurus tell people this because they know people will try and buy a MLS house to flip, and they want you to run to your nearest investor so they stop you???

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Clay Huber July 19, 2013 at 9:59 am

Thanks for the comment Adam.

If you are spending $1,500 or more in marketing expenses, then you BETTER be taking the appropriate action to “protect” yourself, meaning get your signature on the contract so you can be assured you will be paid by “assigning” the contract. At this point, you are a wholesaler.

I would agree, if two veteran investors are tossing each other deals, then yes, I suppose you could call that a “bird dog fee”, but just going out as a rookie and thinking you can make a living doing it… I think they’ll be let down in the end.

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john milliken July 19, 2013 at 1:27 pm

you nailed it clay.
bird dogging leads should only past by when you reach the amount of deals you can handle or the house doesn’t meet your criteria but fits another investors that you know of.

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Clay Huber July 19, 2013 at 1:44 pm

Thanks John.

Great point and one that I totally agree with. The only “bird dogging” that truly goes on in real estate is when investors get too many deals, so they quick “send it to a friend” for a fee… BUT, this is NOT their main business model. Just a quick way for them to monetize a deal that they can’t currently undertake.

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Gloria July 19, 2013 at 2:28 pm

This is a great article and valuable info for a newbie to REI as myself. Now I understand a new term and now know what not to do if I decide to pursue wholesaling. Thanks!

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Clay Huber July 19, 2013 at 2:30 pm

Glad you found it helpful Gloria.

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Kevin Yeats July 19, 2013 at 3:39 pm

Your title intrigued me and I read your column with my analytical eye. I agree with your premise …. the bird dog, indeed anyone with whom you do business, must bring VALUE to the transaction. You get paid to be a problem solver.

Thanks Clay.

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Clay July 20, 2013 at 9:42 am

Thanks for the comment Kevin.

In reality though, in order for the “bird dog” to bring value, they need to adapt the strategies of a wholesaler, and by doing this, they are no longer a “bird dog”, but a “wholesaler”, showing how the concept of “bird dog” is very very misleading.

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Glenn Schworm July 19, 2013 at 10:26 pm

Clay,

I too get those calls every week with a new wholesaler who will find deals for me and none of them come though. I have a template email I mail them to save me the same conversation a hundred times! Good article.

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Clay July 20, 2013 at 9:44 am

Same here Glenn. I have myself a nice template that basically says “if you plan on just sending me listings from the MLS, I will not pay you for these as I have access to the exact same properties”.

After the template email, I’ve never heard back from them.

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Karen Rittenhouse July 20, 2013 at 7:42 am

Clay:
We’ve had “bird dogs” come to our office and take notes on all of our criteria. They’re typically new and very enthusiastic. I explain the difference between a “lead” and a “deal” and tell them we pay for “deals”, not “leads” (we can find leads ourselves).

Like you, none of them have come back. Bird dogging, the way they understand it, is not a real concept. Wholesaling, however, is.

Thanks for your explanation.

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Clay July 20, 2013 at 9:46 am

Great point Karen.

There is a massive difference between a “lead” and a “deal”, and yes, there is no point in paying for a lead.

“Bird dogging, the way they understand it, is not a real concept. Wholesaling, however, is.”

Exxxxxactly!

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Donny Trana June 6, 2014 at 12:52 pm

You say there is no point in paying for a lead because that is something you can get on your own.

So, are you suggesting that you would hire an employee to walk/drive neighborhoods to get leads (properties that are distressed but that might not be on any ‘list’)? Where as, you would NOT pay a bird dog for this?

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DORN July 20, 2013 at 3:31 pm

I totally disagree with not only your article but most of the comments as well. I have purchased houses using a 3 dollar bandit sign, I have gotten houses under contract and flipped the contract with three dollar bandit sign. I have people that bring me deals which I work and then pay them a finders fee all the time.

I pay them when I close, for the LEAD. Done correctly you can have an army of lead generating bird dogs feeding you leads. I disagree with this, and I’m not selling anything. Bird dogging is another source of lead generation plain and simple. if you do not like it or suck at using them then don’t use them. I will continue to do it, because it works.

I see some semantic things in the comments also. a birddog, markets finds the lead and brings it to a wholesaler. The wholesalers actually does the due diligence negotiating etc. when it closes the birddog gets a cut of the wholesale fee. Not sure exactly what the scam is there?

and 1500 to 5k to find a deal GIVE ME A BREAK.

I’m forced to disagree…

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adam July 20, 2013 at 7:19 pm

I’m going to guess that you either buy reo, shortsale, or off the court house steps…or you don’t do that many deals because it sounds like your not marketing.

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Clay July 29, 2013 at 10:05 am

Exactly my thoughts Adam.

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Clay July 29, 2013 at 10:05 am

If you are using bandit signs and “flipping” contracts, then that is a wholesaler in my mind.

The “scam” is thinking you can make a living doing it, which your theory points out perfectly.

So a bird dog spends all this marking money to generate leads, and when they get them, they hand them off with the “hopes” of the wholesaler closing the deal. If indeed the wholesaler does close the deal, the bird dog gets a minimum fee.

While I won’t say bird-dogging isn’t profitable doing what you described, you won’t be sitting on the beach sipping margaritas anytime soon either like the gurus make it appear as.

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Jason Grote July 20, 2013 at 9:03 pm

Clay,
It’s kind of funny, I just updated my BP profile to read that I bird-dog also. I think I have an old-school version of the term. The difference between a “bird-dog” and a “wholesale” is that when I “bird-dog” a property lead, I don’t get it under contract. I turn the lead to an investor that will ultimately “engage” the seller and do what they want with it. If they acquire it, I get paid. Whereas with a “wholesale” property, I get it under contract because I engaged the seller and got it under contract then assigned it to another investor.

BTW, I would like to get your boilerplate response for the bird-doggers who call you… Would ya share?

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Clay July 29, 2013 at 10:11 am

Jason, thanks for the comment.

And that’s my point exactly, you are marketing for the leads. You are not hopping on the MLS and then sending investors homes that are listed in places where everyone has access.

Yes, you can “bird dog” leads to investors, but the people that come to me (along with many others based off the comments left so far) do not understand that you need to market like a wholesaler does in order to create leads.

“Create leads” does not mean hop on the MLS like so many do.

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Jack July 21, 2013 at 6:59 am

I don’t like to work with people who bird-dog and run, often times their criteria for a “deal” are different from mine. I’d rather work with someone looking at deals, using my criteria, which I give to them in return for a share of the deal. I want to educate them on what to look for, calculate it, and in the end, I will probably lose them to their own deals, but it is a risk I am willing to take.

I have found that when you give, you get it back 10x, and if we work on a deal where they get something and I get something, there is MORE motivation to get it right. So I teach bird dogging using tools, the net and what to look for in markets to my bird dogs.

Great topic though, this is step 1 in our 10 step course here in Jacksonville for CIJax.

Jack

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Clay July 29, 2013 at 10:14 am

Thanks for the comment Jack.

Many great points in there.

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Shaun July 28, 2013 at 12:11 pm

Clay,

I totally agree with you that if someone is doing all the stuff you laid out for adding value that they should be thinking of themselves as wholesalers and not birddogs.

However I feel that you don’t understand what the difference between a birddog and a crappy wannabe wholesaler is. I guess it is understandable since it seems that none of the commenters except Dorn and Jason do either.

First nobody is planning on making a living by birddogging (If they are they don’t know what they are doing). They do a tiny bit of work and get a tiny fee (Relative to a wholesaler) for the trouble. They don’t engage a seller or negotiate or get a contract. They see a property that might have a chance of being a deal and they pass it on and if you make a deal they get a few hundred or maybe a thousand bucks.

I’d not really ever think of a birddog as anyone that is even involved with real estate in general. A real birddog would be someone like a mail carrier that gives you addresses of places that are vacant on his/her route. Someone in the building department that tells you about places that are being condemned before the records are published, the firefighter that gives you a heads up on places that had fires. Maybe the college kid that you explain the signs of distress and they walk around the neighborhoods around campus (Though this would likely be a little more like when people talk about “ants”).
So a birddog is really nothing more than someone that you would pay a finders fee to for passing along a possible lead that you eventually bought.

Biggest difference between a birddog and a wholesaler? A good Wholesaler should be using these types of birddogs to expand upon the ways they can get leads to tie up.

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Clay July 29, 2013 at 10:20 am

“First nobody is planning on making a living by birddogging (If they are they don’t know what they are doing).”

Really? Nobody? This is one of the real estate guru’s favorite ‘strategies’. Hence, the point of the article.

I agree about your various examples (mailman, firefighter, etc.) and would classify those as “bird dog” leads; however, myself and many others based on the comments are NOT being approached by those types of people, but rather people calling themselves investors.

Bottom line is this. If you think you think being a bird dog and generating leads is a “no money needed” real estate strategy (like MANY MANY MANY do), then you are going to be sorely disappointed.

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Shaun July 29, 2013 at 1:45 pm

BTW first off I just re-read my comment and I sound really passionate about this.
I really am not, just found the conversation interesting, just the dangers of having a casual conversation in writing. :)

Anyway, I guess that maybe the gurus have switched gears a bit the last few years. The various REIA’s and other meetings I go to have brought in many national guys the last couple of years so maybe they are changing.
This isn’t the only strategy that BP bloggers have recently posted as being a Guru strategy that I have never heard one promote (and actually would say only heard them go the opposite of), so maybe I am out of touch.
I’ll put that as a good thing though. :)

In my experience I have never seen a Guru talk about how someone should become a Birddog, but have had them say you should get some. I would say that a “real” birddog are the types that I cited before. Basically people that might come across houses you won’t in their lives that would be ecstatic to get a finders fee for doing little more than telling you an address.
I tell people I will pay fees for leads I buy, heck I even have it on the back on one version of my business card (Some Guru told me to do that…).

FYI I also get people coming up to me at meetings all the time asking me if I would pay for leads and I tell them yes. Then I never hear from them again, usually.
Bottom line is if someone sets out to be a birddog they aren’t a birddog. They are going to either quit because you can’t make any real money as a birddog, or they will become a wholesaler.

Birddogging is beer money since if you are lucky you probably get $500-1,000 once or twice a year.

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Shaun July 29, 2013 at 1:49 pm

“The various REIA’s and other meetings I go to have brought in many national guys the last couple of years so maybe they are changing.”

Isn’t’ it annoying when you leave out that one word that completely changes the meaning of what you are saying?
There should be a NOT between “have” and “brought”.

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Frank July 31, 2013 at 4:05 pm

Sorry for my delayed response. Birddogging in itself is essentially wholesaling except you’re not getting the huge piece of the pie for closing the deal. As a beginner, my initial REI strategy is wholesaling so I definitely am trying to learn the process for myself without having to pass the torch for someone else to close the deal. On a side note, I’m a video game fanatic and I can appreciate your article photo for how you relate ‘Duck Hunt’ as a birddog analogy.

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notarealtornoreverwillbe August 28, 2013 at 12:13 am

Part of the reason it has been 5 years since I’ve been to this site or sites like them is because of articles like this. I remember when I first got started in investing (2006) I searched this site and a real estate investor website to find a legitimate way a bird dog could get paid on deals only to leave even more confused and watch people claim to have answers about subjects they have never tried to implement in their local markets themselves. You could say I got smart and went out and did deals rather than talk about them on these forums. It is for this reason I hope the next fledging investor catches my rebuttal to your all too apparent ill-informed post.

Call me biased but in 2009 I made a couple grand on a property after an investor added me to a purchase contract on a short sale deal. All I did was generate the lead.

I did this with No Money (transactional funding), Bad Credit (Foreclosure and 580 Score) , and with No Experience (Read A Couple of Ebooks, watch some webinar pitch fests and My REI Education costs totaled maybe $100.00 in 2 years).

Perhaps the author should have practiced due diligence and look for ways that one could be a legitimate bird dog instead of claiming gurus are just out to get your money and bird dogging isn’t a viable way to make money in real estate. Isn’t that the real question?

At a minimum the title of the article should be changed to “Some Gurus Claim You Can Quit Your Job As A Bird Dog, I Call B.S.”

What’s up with these sites banging on gurus anyhow… A guy can’t make a dollar? I would argue that most of these programs are legitimate and its the lazy, unmotivated and entitlement types who end up complaining online about just about any product whether it works or not.

Who’s worse, the liberal w!@#$ who thought she was dating a doctor or the saavy young con artist scoring hot chicks every weekend because of his rented bmw and a good game plan? I would say both? Anyway there are real investors who sell products and there are some bad wannabe’s but if someone is ignorant enough to buy a product and expect dollars to fly out of the screen them lets call them the liberal w!@#$ I described above. Enough about that I don’t want to get off subject, let’s talk bird dogging right folks.

Allow me to poke holes in your premise and justify my own. Shall we?

#1 You Need To Produce –
Ya… That’s a minimum expectation… not a “hurdle”.

As a viable business a bird dog can:

Market Online
– Build a free website for sellers using (weekly.com)
– Post ads on craigslist, oodle, backpage, kijiji and OLX for sellers.
– Post his/her own articles, blogs, and build their own inbound links that will higher improve SEO for lots of free traffic.
– Email FSBO ads that are posted on the same online classified sites

*** Haven’t spent any money yet

Market Offline
– Network with real estate pros (realtors, mortgage brokers, appraisers) and attorneys (probate, bankruptcy, divorce, real estate planning)
– Network with mold remediation and fire damage companies
– Network with Mail Carries
– Network at home, school, the gym, the library, and church. (everyone gets a business card and elevator speech)

*** Haven’t spent a dime yet except for Free vistaprint.com cards (just paid shipping).

Marketing (w/money which is optional)

Buy Leads (listsource.com)
Buy Bandit Signs (banditsigns.com)
Buy Adwords (google, bing, and yahoo)
Buy Direct Mail (click2mail.com)
Buy Domains and redirect to Free sites (go daddy and weebly.com)

All under a grand but not needed in the beginning more to grow the business after a profit is turned.

#2 The Risk of Locking In Payment –

We all know the saying, “No risk, no reward”, however this risk of not locking in a payment is squashed the following ways to get paid.

#1 Pay per lead (not tied to a closing $5-$25.00 per lead)
#2 Pay per lead using a contract (collect assign for the same sales price while collecting a fee outside of title using a flex option, option to purchase and an assignment contract)
#3 Joint Venture (Add the “bird dog” to the standard purchase contract, there is your equitable interest and everything is disclosed)

*** Yes I realize they could become a wholesaler and use a standard purchase contract and assign the contract but….I’ll answer that in rebuttal to your last issue because you don’t realize what that entails.

#3 The Semantics Game –

I don’t see a semantics game at all. A bird dogs vs a wholesaler well a bird dog will do none of the following:

– Buyers (You have to have some relationships with buyers and then market the property to those buyers which is a process in itself in order to be a wholesaler)
– Negotiation (You have to talk to the seller, build rapport, and make an offer in order to be a wholesaler)
– Analysis (You have to know current market value and ARV as well as repairs in order to be a wholesaler)
– Appointments (You have to physically drive to the home, take pictures, access repairs to be a good wholesaler)
– Financing (hard money, transactional funding, private money)
– Title Company (You have to seek out a title company that is familiar with your investment strategy whether that’s short sales, tax liens, lease options, land contracts, trusts, selling LLCs, contract for deed, lease purchase, assignments, and double closes in order to be a wholesaler)

Q: HOW CAN A WOULD BE BEGINNING INVESTOR AVOID ALL OF THIS ADDITIONAL EDUCATION AND RISK?

A: Be a Real Estate Bird Dog!

Conclusion
A good bird dog is basically an affiliate marketer in a way, they take a product (cash buyer investor) and market the his/her services to potential sellers. By doing these they can enjoy an ease of entry into a very profitable industry of real estate investing. Once a seller lead is attain they either sell the lead or joint venture the deal.

That was fun I’ll see you guys in five years cashing checks all the way and paying bird dogs handsomely in all 50 states.

Pay it forward, live long and prosper.

Unknown

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Clay August 28, 2013 at 8:02 am

Thanks for the post.

Although, sounds to me like you spent quite a bit.

While the money may have been minimal (which is still more than “no money needed”), the TIME you need to spend in your outline is quite massive.

Point being, for all the time it takes to be a worthwhile bird dog, you might as well just become a wholesaler and reap ALL the rewards. The trade-off is very much in your favor.

And let me know when you find a bird dog that can sit on the beach and sip a fancy drink while leads are being generated and monetized…. because THAT is what the people I am going after claim in their guru courses.

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Shaun August 28, 2013 at 8:35 am

Interesting points, and it sounds like you are having good success in your business!

Some thoughts on your comments:

“All under a grand but not needed in the beginning more to grow the business after a profit is turned.

#2 The Risk of Locking In Payment –

We all know the saying, “No risk, no reward”, however this risk of not locking in a payment is squashed the following ways to get paid.

#1 Pay per lead (not tied to a closing $5-$25.00 per lead)
#2 Pay per lead using a contract (collect assign for the same sales price while collecting a fee outside of title using a flex option, option to purchase and an assignment contract)
#3 Joint Venture (Add the “bird dog” to the standard purchase contract, there is your equitable interest and everything is disclosed)

*** Yes I realize they could become a wholesaler and use a standard purchase contract and assign the contract but….I’ll answer that in rebuttal to your last issue because you don’t realize what that entails.”

I’d argue that #1 is a birddog strategy but #2 and #3 are just different wholesale tactics. People wholesale Options all the time.

“#3 The Semantics Game –

I don’t see a semantics game at all. A bird dogs vs a wholesaler well a bird dog will do none of the following:

– Buyers (You have to have some relationships with buyers and then market the property to those buyers which is a process in itself in order to be a wholesaler)”

So who are you selling your leads too?????

I’d argue that you are not at all a full blown birddog, sounds like you do some of that and do some “out of the box” wholesaling too.
I actually would say that you USE birddogs to help generate your leads. When you say that you:
“- Network with mold remediation and fire damage companies
– Network with Mail Carries
– Network at home, school, the gym, the library, and church. (everyone gets a business card and elevator speech)”
Assuming you give these people any kind of cut or reward for helping you up THESE are true birddogs, at least IMHO.

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Ken October 8, 2013 at 8:46 pm

THANK YOU! Glad I’m not the only one who notices this! I’m trying to get started as a wholesaler outside the New Orleans area and EVERY time I’ve read or heard the description of what a bird dog does, the same questions kept throbbing in my head:

“Wait a minute: I’ve got to FIND these properties, look at them, crunch the numbers on them, submit offers on them, AND have them under contract before I even contact the investor I’m bird dogging for? How the hell is that ANY different from just straight up wholesaling?!”

It would seem the only difference I can point out is that your investor has a buyer’s list at the ready, but if you’re sitting on a good deal, I’d imagine one quick call to the local REIA group could solve that problem in no time. I’m not wasting my time with middle men. Bird dog THIS!

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Alex Harris November 2, 2013 at 5:58 pm

Interesting views. I agree will some on both sides. I also admit at the beggining of this article AND read the FIRST couple comments, I was wondering if maybe I was the only one who thought this was a little different. Like stated above I think the title should read something like “Guru Lies and Taking Advantage of Bird Dogs” or something along those lines since duties you mentioned like negotiating with the seller are not really the duty of a real Bird Dog. Another main point you made was that it is not a FREE way to earn money like many gurus explain. Honestly nothing is free. A bird dog could just use a pen and paper to write down addresses to pass along to a wholesaler. In this case, you could STILL argue its not FREE since the pen and paper cost a couple dollars not to mention a cell phone and phone plan.

You would think to be a REALLY GREAT Bird dog, you need to do a lot of marketing. Only problem with that is anybody who wants to be an expert bird dog, inevitably becomes or tries to be a wholesaler. So why is this?

Fact is that the best bird dogs ARE NOT interested in becoming wholesalers and doing the extra duties that wholesaling entails. Like stated before, they could be mailmen, firefighters, college students, etc who already have careers or jobs – but might just need a little extra money. FACT is also that MOST of them do not produce. You are right about that Clay. I think for the majority of us wholesalers, finding a REAL bird dog to produce and generate leads seems like it is not worth it. Why is this? Because we feel AT BEST they could only generate 1 deal (and that it most likely won’t happen). To us, it is a better use of our time to find our own deal instead of wasting time on finding a potential bird dog.

Its similiar to being licensed. I would compare a bird dog to a licensed real estate referral agent. Find a lead and then pass it off. That being said, referral agents barely do any deals.

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Melodee Lucido November 28, 2013 at 9:45 am

It is so interesting to me all the different ways and views we can have on the same topic. I have good success taking people that have NO experience in real estate step by step along a path that can get as detailed as they want. And I call these people Property Finders.

The majority are just driving for dollars. I work 90% virtually in my business so these people go “driving for dollars” in areas that I can’t go and send the leads to me each week. About 95% of the people that answer my ads never take action. The other 5% get to it and get occasional deals. Some of these people actually want to learn more which works well for them and for me.

I send them pointers and tips, encouragement and help in emails every 1-2 weeks. If they want to go further in the process then I will start to teach them in baby steps how to wholesale. If they bring in a good deal then we jv on it.

And yes, it does cost them gas money so it’s not a no money out of pocket plan. It is, however, a good plan for those that work it to generate thousands of dollars more per year than would have otherwise.

I love teaching and training people >>> well, the ones that are teachable.I work with the ones who WORK. I don’t put a lot of time in to this but I do get deals that I wouldn’t have gotten otherwise, or at least I wouldn’t get them as fast.

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David January 9, 2014 at 2:30 am

Sounds like a case of sour grapes because your bird dogs couldn’t hunt.

I. You mean they really have to produce to make money? MONSTER REVELATION! There are plenty of profitable homes to be found on MLS. In Lexington KY there are roughly 2,500 agents using MLS legally and a close to 500,000 home owners and investors using it as well. I managed to turn up many steals. One yielding a $65,000 with little more than a new kitchen floor and interior paint. The latest was a $30,000 profit with one month work. I was an appraiser for 20 years. It’s not the source dude…it’s the intelligence and the hard work of the bird dog. Obviously there were 502,500 Realtors and investors who overlooked the deals I found. You simply need to find better bird dogs; better yet you need to work harder in screening those valuable MLS listings yourself.

2. Not sure why you are bashing the bird dogs over contracts. Anyone can create a legally binding bird dog contract on a single page without the need of an attorney. If a bird dog is that concerned about their fee they simply need to convince the homeowner to give them an option to buy the property that allows for assigning the option. Again, no attorney needed if the bird dog is semi-intelligent.

3. Anyone with determination could start bird dogging tomorrow with no money required IF they are willing to knock on a few doors every day. You would be amazed how helpful people can be at providing referrals. Do this every day for a month and you’ll need a computer to keep track of your leads.

I agree that most real estate gurus are overpriced (buy a book instead) but you are way off base by declaring this income opportunity a hoax.

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johannes February 19, 2014 at 10:17 am

That is laughable … tell my bird-dogger, Kevin, that the $1000 he gets consistantly and the $10,000 he is about to make on a deal of 20 rentals he found for my partner and i that it’s a scam. I didn’t read much of what you had to say because of your heading. I am not sure if you are suggesting Kevin is the scammer or we are the scammers. I can’t say that it really matters.

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Tristan Bradley February 22, 2014 at 8:44 am

I enjoyed the article as it laid out some important points regarding anything that is posted identifying itself as NO MONEY NEEDED. I do field inspections for banks and insurance companies and I am a Licensed Real Estate Agent as well, and on my stops, sometimes 30-40 a day, I find a house or two that has an owner who is thinking of selling or is in a distressed situation. If in the short conversation they think they want to hear from an investor or Re Agent (me)regarding their situation I hand them a card and tell them I have a few people that may be interested in the property. I also sometimes see property that is abandoned, usually with tax issues, and take a picture and make a note to research auditor’s website. If I get a call back and I have many times,and it fits investment property parameters I pass the information along, or if it doesn’t fit investment property parameters, I discuss listing the property in the traditional manner.

This way of finding houses, if it’s called bird dogging, is no extra cost to me, as I am already out in the field. It is a perfect marriage with what I am already doing. I will say that in the 100+ houses i inspect each week maybe I get 1 call. Of those 4 a month usually none fit the model for investing but over the course of a Quarter, maybe 1 in 12 will. I would say of those 4-6 a year, half will get a contract and then the “finder’s fee/referral fee” will range from $500-1500.

Last year, 2013 I got 4 checks, one a quarter for a gross of $4000. I also took 5 listings that closed for an average commission check of $3500. In total I put $21,500 in the bank. Not beer money, but not a living.

it definitely takes time, money and contacts. It augments by business but it isn’t my business. If someone can do it better more power to them. It works as a second stream of income for me. That’s about it!

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Shaun February 22, 2014 at 10:28 pm

That is awesome.
You are also what a real birddog is.
Someone that comes across potential leads in the course of their lives and passes along some good ones and makes some money.
The fact you are an agent as well is a nice bonus since you can monetize the retail leads in ways a non-licensed person could, since you would not be able to “sell” those to an agent legally.

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Darrell K March 2, 2014 at 12:12 am

Wow such controversy over the term Bird Dog. It does seem like a lot of people here on this post have agreed to disagree. Well my thoughts are that of the people who disagree in so many ways about bird dogs.

I am a new RE Investor and I’m looking daily for deals in my area with no one to pass them on to in hopes of making that coveted finders fee and or assignment fee. I have learned the basics of wholesaling, short sales and how to come across REO’s that require double closing.

To me, bird dogging is kind of like wholesaling, However, without that end buyer, your stuck holding a peace of property till you sell it or pass it off to a savvy (Cash Buyer) investor if it fits his or her buying criteria, which leads back to bird dogging.

If I could get deals from people who go out to look for them, it would be valuable to me and I would gladly pay them for the leads. But if I was driving for dollars as I often do, when something is found and since I am a newbie investor, I would turn the lead into full profit potential for myself as anyone should.

However, you can’t be everywhere at once and having other people who don’t mind doing it will work for me. Is bird dogging a scam? I don’t think so, some very nice money can be made from doing it. Is it like wholesaling? it could be and can go a couple of way’s as someone mentioned, if their intelligent enough to know that one could put more than a couple of grand in their pocket if they knew how to wholesale. And or shoot the lead to an investor/cash buyer who will gladly pay you for the find. To me it all rocks because money can be made. One

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Kathryn April 13, 2014 at 4:09 pm

I just stumbled upon this article while doing a Google search on REI in my area and, I’ve got to say, I’m quite surprised with a lot of views presented both in the article and in the comments. I suspect it has a lot to do with old school vs. new school investors and terminology. While I’m relatively new to the practice on my own, I grew up watching the practice (and swearing I’d never get involved when I got older, ha!) since my family’s been in the REI business since the 60’s. In my experience, bird-dogging was exactly what a lot of people in the comments believe it to be: people who pass on leads. It may be a FSBO sign you see on a lawn, an abandoned house in your neighborhood, finding out through the grapevine that somebody’s about to move or default on their mortgage, etc. but bird dogs were generally considered to be your eyes and ears on the street. No more, no less. We used to liken it to the difference between a criminal informant vs. an undercover officer. One is already in that environment and will pass on any information that will be helpful…for a fee. The other is part of the larger organization that will profit from the info.

All this talk of marketing, bandit signs, making phone calls, etc. was not part of bird dogging. The BD might jump in to grease the wheels a little if the seller is a friend or family member and they think it’ll help the deal along, but that wasn’t part of the “job”, so to speak. Anything having to do with marketing materials sounds more like your modern, post-bubble collapse “wholesaler”. Wholesalers as they are now didn’t really exist then, at least not in my area. If you were involved in anything having to do with contracts, closing and such you were looked at as just another investor.

So I wouldn’t call these people that send you MLS results bird dogs (because the whole point is to find properties that are both unadvertised and deals) just as I wouldn’t call anyone who gathers leads with marketing materials a bird dog.

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Renee Williams May 26, 2014 at 3:10 pm

There are only two problems with your article.
1. It is not “wholesaling” if the bird dog is not buying it and then selling it at cost to you. If you are going to be nit picky about definitions and exact meanings, then be so with your substitute terms. If the bird dog is not reselling the property at wholesale cost to you, then they are not a wholesaler, they are a bird dog.
2. The next problem with your article is your obvious disgust and disdain for bird dogs, which sounds like a rather convenient middle man for a busy agent.. Quite frankly, (and I am not in the biz) I have the same disgust and disdain for real estate agents – and lawyers and politicians. In any case, the point is that there is nothing wrong with being a bird dog. Just as there is nothing wrong with being a cop, a lawyer, a politician or a real estate agent. The problem is the bad ones screw it all up. Which kind are you? That’s rhetorical.

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Babakazoo July 11, 2014 at 8:14 am

I got sucked into this and soon realized I was an idiot.

Message to future “Bird Poo’s” – Don’t Do It. You Will NOT MAKE MONEY.

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David July 20, 2014 at 9:17 am

the worst post i ever read !!!!!!!!!!!
i am working as a “bird dog” for eight years now for a local real estate investor in new york
i have several friends who do the same and all of us making SIX figures commissions a year
so i bet you had never worked on the field and your so called “Knowledge” is based on lazy wannabe’s “bird Dogs” that couldn’t make it out there and have nothing but bad words, but that is fine they have bad words on McDonald as well….

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