Property Manager · Tempe, AZ · Member since 2015 · 26 posts · 6 votes
I'm a newbie. (introduction post here) I've had a few people now recommend to me that I consider EITHER wholesaling or bird-dogging. My question is, what's the difference?
I read this blog post which seemed to say that if you're doing bird-dogging right (no arguments there!), then you are wholesaling. Is this right or am I missing something?
Investor · Cincinnati, OH · Member since 2013 · 2k+ posts · 1k+ votes
10y
@Stephen Nicholsonnailed it. @Joshua Hill, one other thing I'd say is also look into wholetailing if you are in the right market. That's where you sell to the retail buyer vs. another investor. There are risks involved and I have never done it (I buy apt communities) but I've interviewed many people who do it successfully.
I'm a newbie. (introduction post here) I've had a few people now recommend to me that I consider EITHER wholesaling or bird-dogging. My question is, what's the difference?
I read this blog post which seemed to say that if you're doing bird-dogging right (no arguments there!), then you are wholesaling. Is this right or am I missing something?
A "bird-dog" is nothing more than a lead that YOU pass along to someone who may or may not be able to do something with that property. Most people pay a standard fee for referrals. For example I pay anywhere from $500-1000 for leads that I end up buying and selling.
A "wholesaler" is someone who does the entire transactions from start to finishing. Find the selling, Find the buyer and sell the property and make your "assignment fee" which could be anywhere from $500-50K depending on the size of the deal.
Property Manager · Tempe, AZ · Member since 2015 · 26 posts · 6 votes
10y
Thanks all! This really cleared things up. Now that I understand the difference, it looks like what I'd be interested in is more the wholesaling side. I'm ultimately looking to become more acquainted with the world of REI and build my knowledge and experience base. It seems if I were just a bird-dog I would be avoiding all the parts of the business I would be wanting to learn through wholesaling.
@Stephen Nicholsonnailed it. @Joshua Hill, one other thing I'd say is also look into wholetailing if you are in the right market. That's where you sell to the retail buyer vs. another investor. There are risks involved and I have never done it (I buy apt communities) but I've interviewed many people who do it successfully.
Oh, I'm intrigued. Do you use any creative financing strategies or do you have enough of your own capital? If you have enough capital, was it acquired by wholesaling, flipping, etc? Give us the juice because buying/owning apartment communities is a goal of mine. Right now I'm looking to purchase my first quick flip so I have quite a way to go. @joe
Investor · Cincinnati, OH · Member since 2013 · 2k+ posts · 1k+ votes
10y
@Brittaney WoodsI raise money and buy apt communities with my investors (and put in my own money too). On my first deal I didn't put in my own money because I didn't have any to put into it (I raised the money). Re: creative strategies, one of them is a Master Lease. I used this approach to buy a 168 unit (my first apt deal). I still had to bring money to the table (about 20%) but it allowed me and my investors to take control of a property without having to get formal loan approval because the current owner stayed on as a guarantor.
"It seems if I were just a bird-dog I would be avoiding all the parts of the business I would be wanting to learn through wholesaling,." that's not necessarily true. There are some bird-dogs that just want to pass on information & not be involved in the business. There are other bird-dogs that work with wholesalers and cash buyers & use it as an opportunity to learn the business from them, but from a very, very, low monetary risk standpoint.
I wholesale, but also depending on the type of opportunity I bird-dog. When I bird-dog, I'm the one bringing a buyer to the table & only ask for a referral fee IF the buyer closes on the property. I usually do this if the deal involves several wholesalers, I don't daisy-chain.
@Brittaney WoodsI raise money and buy apt communities with my investors (and put in my own money too). On my first deal I didn't put in my own money because I didn't have any to put into it (I raised the money). Re: creative strategies, one of them is a Master Lease. I used this approach to buy a 168 unit (my first apt deal). I still had to bring money to the table (about 20%) but it allowed me and my investors to take control of a property without having to get formal loan approval because the current owner stayed on as a guarantor.
Those are some of the deal structures I would love to put together!
@Brittaney WoodsI raise money and buy apt communities with my investors (and put in my own money too). On my first deal I didn't put in my own money because I didn't have any to put into it (I raised the money). Re: creative strategies, one of them is a Master Lease. I used this approach to buy a 168 unit (my first apt deal). I still had to bring money to the table (about 20%) but it allowed me and my investors to take control of a property without having to get formal loan approval because the current owner stayed on as a guarantor.
I think you should write a blog post (if you haven't already) getting into more detail. I know it seems easy to you but it would be so helpful for the beginners.
@Brittaney WoodsI raise money and buy apt communities with my investors (and put in my own money too). On my first deal I didn't put in my own money because I didn't have any to put into it (I raised the money). Re: creative strategies, one of them is a Master Lease. I used this approach to buy a 168 unit (my first apt deal). I still had to bring money to the table (about 20%) but it allowed me and my investors to take control of a property without having to get formal loan approval because the current owner stayed on as a guarantor.
Here are a few things about Joe's post
1. Apartments are commercial investments not residential
2. Master leases and Master Lease options on commercial apartments are a great way to control property and not havr to get a loan, A bit of caution here, you were basically guaranteeing a lower payment to the owner and charging a higher amount to the tenants, so this is not for people that don't have capital
3. When you deal with residential less than five units, The residential laws coming to play, Dodd Frank, TILA, CFPB, etc,
Joe had some awesome audio recordings on his website, I did an hour recording for him regarding a joint venture with the seller on a rehab
If you learn private lending and prohibited transactions and disqualified persons, you can get capital without going through banks
@Brittaney WoodsI raise money and buy apt communities with my investors (and put in my own money too). On my first deal I didn't put in my own money because I didn't have any to put into it (I raised the money). Re: creative strategies, one of them is a Master Lease. I used this approach to buy a 168 unit (my first apt deal). I still had to bring money to the table (about 20%) but it allowed me and my investors to take control of a property without having to get formal loan approval because the current owner stayed on as a guarantor.
Here are a few things about Joe's post
1. Apartments are commercial investments not residential
2. Master leases and Master Lease options on commercial apartments are a great way to control property and not havr to get a loan, A bit of caution here, you were basically guaranteeing a lower payment to the owner and charging a higher amount to the tenants, so this is not for people that don't have capital
3. When you deal with residential less than five units, The residential laws coming to play, Dodd Frank, TILA, CFPB, etc,
Joe had some awesome audio recordings on his website, I did an hour recording for him regarding a joint venture with the seller on a rehab
If you learn private lending and prohibited transactions and disqualified persons, you can get capital without going through banks
I'm a newbie. (introduction post here) I've had a few people now recommend to me that I consider EITHER wholesaling or bird-dogging. My question is, what's the difference?
I read this blog post which seemed to say that if you're doing bird-dogging right (no arguments there!), then you are wholesaling. Is this right or am I missing something?
If you are new in Tempe, AZ, a great market (I had an office in Tempe and home in Mesa a long time ago) I would:
1. Get licensed in AZ
2. Learn how to be a "Terms or Cash Investor", meaning offer cash or term offers (terms are lease option, lease purchase, wrap, land contract, TIC, sub2 with or without a note, etc) OR you could offer to list the property.
3. Go after expired listings or cancelled listings.
Bird dogging can be illegal in some states. Get an option to Buy and sell your option. Check your "agency" laws in AZ. Have the ability to close with Transactional funding or Hard Money. Start here for learning about agency laws.
Given that you are in Tempe, Google Sean Terry. I am not going to get in to a debate here about him being a Guru, but the man does a big Business in Phoenix as a wholesaler and has a lot of utube video's on the subject. You can learn a lot from those videos. Hope that helps.
Sarasota, FL · Member since 2014 · 151 posts · 80 votes
10y
A real estate investor's romance story might look something like this, it is the chain of events (steps) that someone first starting out in real estate investment might take:
1. Birddogging - as a starting point and to raise some capital
2. Wholesaling - convert sufficient birddog capital earned into marketing for wholesale deals
3. Fix and Flip - convert larger gains from wholesale earnings into buying wholesale, fixing, and then selling at profit (flipping)
4. Buy and Hold - from fix/flip and wholesaling you now have sufficient experience and knowledge, and hopefully money, to be selective in keeping some properties and start to build a passive income portfolio
5. The Skies the Limit - you take all you have learned and experience gained, and move into a bigger arena of real estate investment such as commercial properties etc....
All being said, where you start in real estate investing will depend on where you are in terms of experience, knowledge, and ultimately funding. As they say in the BP world, your first step is going out and doing something (take action).
Do you happen to know of any good places to learn more about being a "Terms or Cash Investor"? I haven't searched deeply, but my first couple searches didn't turn up much on the topic. The words contained in that phrase have so many hits it seems difficult to wade through all the search results looking for exactly what you're talking about (while not knowing what it is) and finding a quality source of information.
Do you happen to know of any good places to learn more about being a "Terms or Cash Investor"? I haven't searched deeply, but my first couple searches didn't turn up much on the topic. The words contained in that phrase have so many hits it seems difficult to wade through all the search results looking for exactly what you're talking about (while not knowing what it is) and finding a quality source of information.
Hi Joshua
Below are notes from one of my students recently, this business is about being creative and solving problems for sellers and buyers