Help Us Build a Birddog How-To FAQ
Joshua D.Pro Member
BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votesEarlier today I had a request that we build a FAQ for birddogs. I'd love to get out and do it, but I'm a bit overwhealmed right now. If anyone can help us put this together, that would be great! Just add on to this thread and we'll get it going!
Thanks in advance for all your help, tips, notes, etc on this!
With that in mind, lets build the BIRD DOG FAQ!
I think you guys might be blowing this whole birddog thing out of proportion. Like who is really aspiring to become a birddog? I think people are aspiring to become REI's. And if they have to use strategies to raise quick capital then sure they are using those techniques. I just think it's the wrong term and it's unfortunate that it's spread. If I had to do that I'd still try and think of myself as a "REI" who's just trying to raise quick capital for my first real deal. NEVER as a birddog. I think people have to be very careful as to what they label themselves or what others label them. Because you're becoming the thing that you think you are. So if you're a birddog that's what you are, basically someone who's not there yet, who doesn't know the industry and is well pretty pathetic. It's not the right perspective to have. If you wanna get somewhere you always have to work in "reverse". So if you're wanting to become a millionaire via REI, and you're just getting started then the most important thing you can possibly do is start to tell yourself everyday over and over again that you are infact a "Millionaire Real Estate Investor". Because what will happen is that your brain cannot interperate that input any differently. It has to act on what it's given. So as you tell yourself you're a "MM REI" you'll more and more start taking the actions that a millionaire would take. And I guarantee if you keep telling yourself that, you will not only build up the believe system that you are one, but you'll also automatically start taking the right actions, eventually leading you to becoming a millionaire. That's how the universe works, it's impossible for that not to happen once you have the believe that you are any certain label. But if you're telling yourself that you're a birddog well gloy-gee that's like telling yourself that you're not very good and that you don't know anything about the industry. It's the absolute wrong label to put on yourself. The perspective that anyone who's a REI should have is that there a multi millionaire. Because like I said you're becoming what you think about and think you are all day long. Once you develop that believe that you are something it can either be your greatest asset or your biggest weakness. So tell yourself that you're a Multi millionaire REI, not a birddog. Because you're becoming what you think of yourself as. Ya, honestly get that term bird dog completely out of your head. It's not who you are. What you are is a multi millionaire REI, who's just raising quick capital in order to fund your first real deal.
Also on a side note to all this...my thought is that I don't know an easier way for someone to reach millionaire status than REI. It's got to be the easiest way out there doesn't it? Like where else can you make six figures even seven per deal. So if you're not thinking in terms of making millions well start too. Because it's not that hard in this industry.
lol. Jim - I put the contract there.
One of the other forum members provided it. Thanks! :lol:
You can get a lot of information on bird dogging from [LINK REMOVED]
You can't really get any info from that thing cuz it is just his advertisement to buy that ebook...
I was not the creator of the book.. all i did was read it and felt like if he wanted to become a birddogger that book was specifically made for that purpose. If you have ever been to that website you will get the same response from investors who started out as birddoggers
Also on a side note to all this...my thought is that I don't know an easier way for someone to reach millionaire status than REI. It's got to be the easiest way out there doesn't it? Like where else can you make six figures even seven per deal. So if you're not thinking in terms of making millions well start too. Because it's not that hard in this industry.
Sorry if it sounds to direct I'm just curious because I haven't applied the concepts you mentioned. I'm currently reading a book right now that tells me to do what you just said and I'm just testing the waters. I still have a lot to learn!
3. Pretty much everything a standard investor should know, basic market information as well as possible buyers. Network like crazy and you should be fine.
Jbalinvest,
Sorry to ask a dumb question, but what do you mean by the term "network"?
Vicky
Sorry in advance if this is a bit too long...
Actually you will find that being a birddog is illegal in all states that have licensing for RE agents. That said some operate legally and call themselves birddogs. Let me explain.
In states that have licenses RE agents the rules largely say that if you are matching a buy and seller PLUS you expect to be paid a fee if a deal happens you need a license.
If you are just introducing them and receive no compensation (free lunch, fee, commission) you are fine.
If you provide leads and get paid for the leads but not on the success of the deal (selling mailing lists, etc) you are also fine as you are making money for brokering a deal.
Yes, this is not what people expect based on what they read.
Note that in some states the person committing the crime is the birddog and in others it is the person paying. It might also only be a civil matter in some states. I am not a lawyer and I can not speak for each state.
Wholesaling and flipping is legal and you can make money based on the deal completing. The logic is you are a principal in the transaction. You have something at stake.
If you listen to some of the replies here you will hear getting things under contract. They are folks who negotiate a deal and have a binding contract. They are selling their position when they flip or wholesale the deal. They are involved in the transaction, have something to lose if the deal does not go forward (they contract if nothing else).
A person who finds sellers but does not get a deal under contract and then expects a fee that is based on the deal closing is operating illegally if you check the regulations in states that have licenses RE agents. They can sell the lead but not for a fee tied to if the investor buys the property. Folks who only have leads are selling more or less are selling contact details and nothing else. It is worth what ever a lead is worth like buying a mailing list.
I know this is controversial. I know that some make a good bit of money being a birddog and they are not principals. I know investors pay such folks. Just like speeding on the highway. If a lot of people are doing it and you have gotten away with it before that does not make it legal. The judge will not accept such a defense.
A problem with a birddog getting a deal under contract. The investor might not like the terms that were agreed. So some investors really would just like a lead and not an agreed contract if they feel they can negotiate a better deal than a birddog (most birddogs are new and not that good at negotiating a RE deal as they are learning).
A variation that can work if there is a bit of trust....
The spotter finds a hot prospect. They pass it on to the investor. The investor negotiates the deal and buys the property using an LLC. The spotter is a member of the LLC so gets a stake in the deal. As a member they can be bought out of their position. The spotter is both able to be compensated based on the deal going forward (skin in the game) while at the same time the investor has control of the negotiations and the deal mechanics.
Note that user English case law (used in 49 states) there is the principal that is something walks like a duck, talks like a duck it is a duck. Hence the above structure is not perfect in all states. If a state attorneys general wants to claim that the paperwork is an attempt to hide what is really a brokerage relationship they might succeed in court. It has been tried before in OR and there was a partial victory.
Bottom line. Be a principal. If that means partnering with an investor where you are part of their team then go for it. Just know the laws and do not assume that prior success at speeding means you will not get a ticket.
John Corey
Referral or Birddog fees in excess of $50.00 are illegal however, at least in Texas... how do you get around this? "Assigning contracts", in which you are the buyer, for a fee is 100% Legal, and in my opinion a better way to ensure that you get paid.
Bird dogs can get paid for leads. Names and other such info. They can be pad for supplying the lead. The fee can not be contingent on a deal closing. I get you a name you pay. Simple as that.
Now a bird dog could do a lot more than just a name. They can look up the property details, figure out if there are liens, etc.
Normally a bird dog is new and all they are doing is beating the bushes to flush out motivated sellers. They do not really know how to negotiate. The investor does not want them to negotiate the deal.
A wholesaler is someone who has a contract in place, agreed a deal with a seller and is selling their interest in the deal. They are selling something they own and are a principal in the transaction. You are buying their place at the front of the line. It comes with the already agreed terms.
A wholesaler can be paid if the deal closes as they are selling their right to close the deal. Or and investor can pay them even if the deal does not close. When you buy an option you pay even if the deal does not close as you bought the option to buy (hence you bought something; just not required to buy the property).
John Corey
Jim has a point. The term is generally used by most investors to mean something that is clearly illegal. The small number of investors who know how to legally bird dog or work with bird dogs will rarely be noticed.
Similar to the term hacker. It started out as a complement for technical software developers who were good at writing code. The term had no connection to illegal activity or breaking into systems. Over time the use changed and those where used to be hackers in the legally correct way stopped using the label.
A bird dog can operate legally. Most newbies and others who are not aware of where exactly the line is tend to use the term when operating as an unlicensed agent.
Inventing a new term and defining the activities correctly will be a challenge if you want the new term to be broadly understood.
John Corey
Also...
If you wanna to change your finances it takes work. The main thing you have to do more than anything else is start making lots of offers. That's it. Lots of low ball offers. So get acquainted with your local online MLS. Look at properties daily, make at least 1 low ball offer each day. It's like fishing if you bait that hook just right and keep casting, you will get a bite, and you should be able to reel it in. And when you get it in your boat, it might be a really big fish! Then just keep casting out. But if you're sitting around and thinking about it and not taking the key action of making offers, casting your reel, then you won't catch any dinner. So when you go hungry and wonder why? That's one main reason.
And if you're willing to do that then start telling yourself that you're a millionaire. Doesn't matter one bit what's in your bank account or what you have or where you came from right now. What matters is if you can say that to yourself. Your mind will have trouble with that though. But say it anyway. Because what you say about yourself will manifest itself. Then one day you'll be casting and you'll latch onto a deal that makes you five figures, then you'll caste out and you'll eventually get a deal netting you six figures, then again cast, and you'll get a deal making you seven figures.
Hi,
I was reading through a few threads you had responded to and see "low ball offers" a lot. After doing some research on the term, it seems that a lot of REAs and sellers are very offended by low ball offers.
The last thing I would want to do is make someone mad by a low ball offer. How do you do this without pissing someone off?
Hi, let me introduce myself, "I'm a millionaire real estate investor!!!"
How's that, for taking control of my mind? Remembering its mind over matter, right?
Ok, but what exactly is the bird dog doing? Are they buying bandit signs and putting them up to get leads? Are they mailing out their own direct mail pieces? If you are only able to pay them per lead, then how do you determine whether they just took phone #'s out of the phone book and gave them to you asking for $50 per lead? How do you determine how much you will pay them per lead? Does an investor usually pay one bird dog who gives him good leads $50 each while paying another bird dog $10 per lead who usually provides low quality ones?
If a buyer calls the bird dog from a bandit sign that they put up, what would they tell or ask the buyer?
Worry less about pissing them off. If they want your money they need to meet you price. They can say no if they like. You can tell them that if they change their mind they can come back to you. Think of it as a back up offer that will continue to be good in case they do not find someone who will pay more.
Would you rather be poor or have the seller think you offered to little?
You do not need to offend them on purpose. I just would not worry about what they think of the offer other than did they say yes or no.
John Corey
Assume everything I post on BP is based on the US RE market. If I want to say something about other countries I will make it clear.
If you want local state knowledge or even city knowledge then find other investors operating there. Attend and maybe join the REIA for your area. Search Yahoo and others for state, region or city specific mailing lists for RE investing. I happen to be on 2 for different parts of OH.
Each state will have a website. Some are better then others for finding general info.
There is a national apartment association. It tends to chapters in every state. They focus on landlord tenant laws.
John Corey
so is the faq about bird-dogging being written or has the idea been abandoned?
We're working on it, as we are on a FAQ for all the other real estate topics. You can start with:
http://www.biggerpockets.com/investing-guide/
What I love about REI is busting the brush. Thats where I get my satisfaction. If I can help others along the way, then all the better. Some are in it for making the deals. I do understand that side of it. What i dont understand is why someone would purpose to be a birddog.
Why would one bust the brush to find the good deals and then turn them over for someone else to make the real money on them. There is only one instance where I can see it. Investors scratching each others backs. I have my niche market that blows my skirt up. While im out there gettin my jollies, I run across an opportunity that doesnt tickle my particular fancy so I call up Kyle Kadiddlehopper, who is into the type of property I stumbled onto and point him in that direction.
The big K makes a wad-o-cash and appreciates me for my kind heart and brilliance and so gives me a call when he comes across something that he knows will make MY heart go all-a-flutter.
Networking! Thats what Im here for. I dont have alot of cash nor the prettiest credit picture in the world. What I have is a love for what Im doing and a desire to succeed. Determining what it is that truly floats our boat and what our own definition of success is, is the place to start.
Ive only been able to dabble over the past several years. I havent made any money yet but couldnt put a price on all Ive learned. Ill be cruisin timber and busting brush for real come next spring when I leave Alaska behind. :woohoo:
If anyone wants to find me after March 08, it'll be easy. Just look in Idaho, Montana, Wyoming, North dakota, South Dakota, Nebraska, or Kansas. If Im not there, Ill be in Colorado, Iowa, Minnesota, or Wisconsin.
PS. Ill be the guy in camos, carrying a longbow and huge grin on my face!!
There has been great information posted in this topic already. But I would like to give you a personal perspective on "bird-dogs", or as many like to call them "property locators".
My company has worked with hundreds of locators in the last 12 years of being in business. Our locators have brought us hundreds of deals that we have purchased and have been able to profit from. But most importantly....the locators themselves have made tons of money from bringing these deals to us. The bottom line is being a locator is a tremendous opportunity for many individuals.
Typically, locators fall into one of four categories. They are either someone that:
1 Doesnt have the cash necessary to invest into real estate
2 Doesnt have all the knowledge to make the correct investing descisions
3 Doesnt know all the key individuals that they need to know to successfully complete a real estate transaction
4 Just isnt interested in buying and owning real estate
But the bottom line working as a locator is a fantastic way for someone to not only get into the real estate industry but to also prosper. And remember this key point, the MOST important aspect of real estate is the understanding of how to correctly structure a real estate deal and make sure that the buy price leaves equity in the deal. Once you are able to master how to successfully do that....you have about 90% of real estate dealmaking mastered.