Birddogging help!!!!!!!

Hi Gen,

If I understand your question correctly. The agent will get their commission from the Seller (if property is listed on MLS). The price of the property you will have to increase the price to your cash buyer, so you can make a profit.

ie. if you locked it up for $100k then you will sell it to your cash buyer for $110k. You will make a $10k profit.

Hope this helps!

You guys are both making a pretty common mistake here. You are confusing birddogging and wholesaling. Often, people think they are basically the same and that is not correct.

A birddogger finds a property for an investor that the investor normally would not be able to find for themself. Most investors will not pay a BD to find them an MLS prop because it is an obvious find. A BD does NOT negotiate a price or get a property under contract. A BD furnishes an address and sometimes some pictures of the outside of the property and possibly the name of the seller. Depends on what the buyer expects you to furnish. Establish this upfront. Usually these props are either FSBOs or abandoned or rundown props. A BD fee averages anywhere from approx $250-$1500. Of course, as with anything, this can vary because anything is negotiable, but this is a good guideline.

A wholesaler will find a deal, do the negotiating, get the property under contract and then, as Monique described, add their fee and sell to the end buyer at the higher price, usually assigning contract. There are also some end buyers that will not buy anything at all from a wholesaler that has been on the MLS. They want deals that no one else knows about. As a wholesaler, you can get much higher fees if there is room in the deal. You must always leave enough "meat on the bone" that your buyer will come back for more. So even a skinny profit for you is better than no profit at all.

REMEMBER!!!! You are NOT selling the property! You are selling your rights or position in the contract! This is the fine line that keeps this all legal in all 50 states!

Monique is correct in the fact that the agent is paid by the seller.

Karen

I'm glad to see your are taking action. Knowledge + action = Results. I will suggest you to build your cash buyers list by attending REIA and auction. Don't rely on only one buyer which you got. put out bandits signs for sellers which says

CASH FOR YOUR
HOUSE
CALL NOW
xxx-xxx-xxxx

Post ghost ads under wanted on CL title: ONLY VERY MOTIVATED SELLERS
body- I AM A REAL ESTATE INVESTOR THAT BUYS AND HAS CASH INVESTORS IN EVERY STATE!!!...

call me NOW!! xxx-xxx-xxxx I'm Available 24/7

I would suggest you to start off with FSBO.

Goodluck

Karen is absolutely correct. Without a basic understand of what a BD does and what a wholesaler does, it would be useless to go to the next step. I suggest you read up and understand the basics before going any further.

Your absolutely correct. I actually made that mistake with an Investor that emailed me on my deal (SFH). She was looking for an LO, I told her if she referred any buyers to me I would pay her a bird dog fee $500-$1000. She asked if I use a bird dog agreement, I stated I do ( I should research an agreement that can be used).

After a little thought I remembered bird dogs find properties for you, not the buyers.

Karen, I really appreciate the clarification... I guess I'm going through a learning curve:)

I thought you were still considered a bird dog even if you are assigning a contract? I sure hope so I used the bird dog service letter from insider elite to target cash investors. I plan on locking properties up and giving them to the cash buyers for a larger fee than the general bird dogging finders fee.

I don't understand why most wouldn't go that rout, locking up a contract and get $5,000 or more is way more worth it than the $500 finders fee imo.

I have a mortgage broker that I work with who refers buyers to me for LOs that have $$ to put down and good income but just can't qualify yet. I give him a "referral fee" if i am able to close anything with them. This relationshil works well because he will also be able to help my buyers with mortgages on down the road. I don't have a contract with him (in his position it is actually not legal to give him a fee) but I have verbally told him that I will 'take care of him' if that happens. In doing LOs though, the difficult part is usually finding the sellers. Buyers are normally the easier pert in these.

Karen

Sorry. You are NOT a BD if you are assigning a contract. You are a wholesaler. Doesn't mean you can't wholesale to any buyers that you find from your marketing. You just present the deal to them in a different way when you find it. So you are still good.

The reason that some don't go that route in the first place is that they are not comfortable figuring numbers, repairs and negotiating the deal and putting it under contract yet.

Karen

Thanks to everyone that gave me advice!!!!!!!

I wasn't trying to mix the two in terms of wholesaling and Birddogging. lol...However, I was trying to understand if you could BD a MLS Property as I thought it made no sense. So I needed to make sense of it. And I thank you for that. I am building my buyers list, however, I don't want to overwhelm myself. I am learning everything on my own. so this is a slow process. I have been on a site that has for sale by owners postings..and I will contact the owners today to see if the properties are available. The buyer is really interested in buying so, this is why my focus is on this one guy right now. I feel that if I add more to my mix, I will get a headache, for I am learning on my own and finding my own resources for the most part. It's completely different than being trained first.

Thank you all, for the advice. I think I will just stick with the finding property owners and go from there. I am just referring the properties, but do I still have to come up with the numbers? Or would I have to assign it to do that? If I still have to do the numbers, can someone please explain how that is done? I understand that the ARV is the after work value, The price of the home plus my fee is how much I will pitch...but how can i find out if homes are selling quickly in a certain area? I know how to compare home prices by looking them up on total view or zillow...that will let me know if it's priced in a good area...but I get stuck after that.

Again, I'm learning as I go...but I have two guys so far that I'm working for right now. One is buying and the other is selling.

I'm open to anymore advice!

~NickandGen

If you are just referring properties, you don't have to do numbers. You only have to do numbers if you are going to try to put in under contract.

The correct term for ARV is After Repair Value. I am not trying to be nitpicking here. But when you speak with your buyers/sellers you want to use the correct terms. Gives you more credibility.

To do numbers the basic formula is:

ARV x .70 (70%) this will cover closing costs, holding costs and profit for end buyer
Take that 70% - repairs - your fee and that will be the maximum offer you should make.

Do not base your ARV on the Zillow and TotalView numbers. Your ARV must be based on SOLD comparables. Not listed houses that are FOR SALE either! But what they sold for.

Karen

Thank you for clarifying that for me. I can see why people would be nervous about getting it under contract I feel that pressure right now, part of me is concerned that I don't have enough buyers to pitch to yet to even make offers. I sent out letters to cash buyers in the area yesterday and today, so hopefully I will get some calls and that will give me the backing to go in and hopefully lock some great deals up. Thanks Iv seen your posts on here you know what your talking about so it's appreciated

As always you give GREAT advice!!!!!!! Thank you very much Ms. Ma'am!!!!!!! And I took notes! I will be trying this out later this evening! To see what I come up with!

Again, Thank you!! Ttys!

~NickandGen

I like to use the following formula. It gives a more accurate picture.

ESP (Eventual Selling Price)
Minus Improvement Costs (depending on condition)
Minus Holding Costs (generally 15% of ESP)
Minus Minimum Profit (flat 10% of ESP + 1% for each $5 sq/ft improvement)
Equals Maximum Offer

Of course, profit is based on an investor's flip strategy point of view.

yea good advice karen as usual, good stuff. You add some vauluable advice here. yea guys go get em, my 1st deal was a bird dog deal I got $1,350 from that, my 2nd & 3rd deals were wholesale deals, i actually put them under contract etc.

That sounds awesome!!!!!!! Congrats! My strategy is to learn as much as I can and do some birddogging first. I am kind of nervous in putting properties under contract. But I will eventually get to that once I get my RE License in my state first...then I'll probably be more comfortable doing contracts in other states. Until then, I am trying to see about marketing and referring. But I have to make it clear that I don't have to do numbers I guess. But for now, it's ok because I need the education.

Again, Thanks all and Congrats CaliT!!!!