Bird Dogs in Real Estate

Bird dogs are out there scoping out the real estate market looking for deals for the investors they are working with - what they want are properties that can be purchased for cents on the dollar. It could be a foreclosure sale, short sale, listing by a real estate broker or For Sale by Owner.

Why are investors hiring bird dogs? There are real estate deals all over and these investors can't be everywhere all the time, so they need an extra set of eyes and ears. And they are willing to pay money to those who are able to find these properties that are potentially undervalued and that could bring in profits to the investor.

These can be legitimate jobs where an individual finds the leads and then receives a referral fee by an investor. The downside is that if a person doesn't know exactly who they are working for and how to find a workable deal, they can be spinning their wheels and not getting paid for their time and efforts. There is also a certain amount of risk involved if putting a property under contract and then not being able to follow through (or the investor not following through). Bird dogs need to know the Investors and/or groups of investors and find out what deals they have closed. They also should know exactly the types of properties the investor wants. It's just too easy to waste a lot time researching homes, neighborhoods, current values/trends and potential profits on a property when it does not have the criteria an investor requires.

Some bird dogs may even be part of the negotiating process. If they are entering into a contract, they may then assign the contracts. (And in some cases the investor then can assign their interest in the contract). It's an interesting process and those delving into this type of business can easily get frustrated for a variety of reasons. To be successful, a person has to know how to find a home with enough potential profit after resale (or if the investor is buying to hold and rent, a bird dog has to know what going rents are, expenses, etc). If repairs are needed, these costs have to factored in, as well as costs while the home is on the market, broker fees, incidentals, etc. Investors will have a certain profit margin expected for any deal. If, negotiating is part of the job, this makes the job even harder because there are so many other competing investors in the marketplace that are buying right now and some with cash. A person has to know the in's and out's of a good contract and how to appeal to a seller when other contracts may be on the table. They also know how to protect themselves in the contract with contingencies or outs if something doesn't go as planned.

There are CDs and ebooks on how to start and work the bird dog business---but be careful, especially if they say it's a quick way to get rich. Bird dogs have to be knowledgeable in real esate and have a good understanding of the investors' needs to be successful and it also takes considerable time and efforts.