I am new to real estate and I recently was hired by a real estate investment firm part time unpaid to help them find off market multi-unit properties. If I was to find them a property and the deal was to go through I would get a portion of the acquisition cost. I no longer work with them due to the fact that I still work a full time job, but I am thinking of venturing out on my own. I have a sales background and wanted to reach out to property owners and then deliver potential off market listings to real estate investors in my area. Only problem is I am unsure of the legal parameters here as I am not technically working for an investor and I am not technically an agent or broker. Would I still be able to be paid an acquisition fee. Thanks in advance for the help!
@Sophie Lavet Assuming you do not put the property under contract, you could still be paid a finders fee from the buyer--whatever you agree to. You might not be very protected, but I think you'll find that a good buyer will keep their word because they'll want future deals from you.
@Sophie Lavet what you are referring to is known as being a "bird dog" similar to wholesaling, except you don't actually have the property under contract so it is more risky for you because there is no guarantee who ever you give the deal to will pay you. but it will make things simpler for you because you don't have to worry about the contract. I would say if you're going to do this you should first try to reach out to some investors in your area and ask them if they would be open to you sending them potential deals ( I know I would agree to this if someone asked me, and I would be willing to pay a fee if they really did bring me a good deal), that way if you do find someone that wants to sell you can move fast. I'm sure others can speak to the legality of bird dogging and whether it falls under the category of acting as an agent without a license.
Another thought, if this is something that you are interested in why not just become an agent? Then you could reach out to the same potential sellers and become the listing agent and collect your fee in the form of the agent fee?
Hi Sophie, Josh is correct... From investopedia:
¨Bird dog: Investing term that refers to someone who spends their time trying to locate properties with investment potential. A bird dog looks for motivated sellers or undervalued properties with the intention of passing the deal on to a real estate investor in exchange for a percentage or fee. A bird dog will also develop a network of real estate investors so they have a better chance of converting a particular lead into a deal. The term bird dog is more strongly associated with identifying properties for flipping, but it may also be used in the context of identifying income properties or residential rentals.¨
Best of luck