What payment should I request for being a bird dog?

Question

I am currently searching for properties that meet the criteria of my investment "partner". I find and analyze properties and send a detailed analysis to the investor if I think it may be of interest to them. That could be the extent of my work or, it is possible, that in the future I may be called upon to actually visit a property as well.

My question is, only if the investor closes on a property, what fee should I expect?

I am thinking perhaps .5% of the sales price to as much as 1% of the sales price if I drive over 50 miles (one way) to visit a property.

Charles Carillo · Answer

@Rob Greenawalt

I think it really depends on the property size. We receive emails weekly from people passing us deals that are requiring a 3% "finders fee" on $20mm and $30mm properties. This of course is a crazy amount of money and illegal in Florida (unlicensed real estate sales). I have heard from other operators that are giving 3%-5% of the general partnership to the GP that brings the deal (this equates to about 1%-2% of the whole deal). I think it is great that you are analyzing the deals as well since this is a great benefit to your partners and uncommon with other bird dogs I have spoken to.

Brian Boyd · Answer

I think those numbers are a bit low. We just had a deal fall through and we gave our real estate agent the earnest money we put down. He worked his tail off and did a tremendous amount of work. Irrespective of whether the deal closes, you should charge for your services. You are providing value. Maybe ask for $2000 for any deal you bird dog and an equal amount if the deal closes.

Just my thoughts.

Good Luck,

Brian

Rob Greenawalt · Answer

Charles Carillo....thank you for the compliment about my analysis of properties while bird dogging!

Helps my confidence.

Rob Greenawalt · Answer

Thank you both Brian and Charles!