When it comes to investing in real estate sometimes we do not pursue our dreams because we feel as if we don’t have the money to put toward making them a reality. The great thing about distressed real estate, however, is there are different ways to invest. Being a bird dog, without a doubt, is a creative option that should be considered, without even touching your daily bank account.
Becoming a real estate bird dog teaches you how to find propeties, locat buyers and put the whole process together. A bird dog, by definition, is someone who locates a good real estate investment prospect and puts the property under contract with the purpose of assigning that contract for a fee, to an investor. The investor then would repair this distressed property and resell it. This is a greatt way to start learning about real estate and investing, for ny newcomer. Bird dogs look for human relationship witht realtors, brokers, bankers, loaners and anyone else who can deliver knowledge of a beneficial real estate investment.
Market Yourself
In order to be a successful bird dog one of your main goals should be to market yourself in ways that will attract motivated seller leads. The best way to measure you marketing success would be to know the numbers. Below are some of the things you should know about your motivated seller marketing plan:
- Where your leads come from?
- The amount of prospects you need to reach to get a lead.
- Total leads that come in every week and month.
- Amount of quality leads.
- The number of leads we actually close.
- Closed Deals ratio to qualified leads.
- Your profit rate from each seller lead.
- The cost for each seller lead.
Following the basics will put you in control of your actions so that you will stop wasting time and resources on the wrong tasks. Marketing is a numbers game and succeeding at real estate is to know the proper numbers. With knowledge of the numbers and the activities it takes to get a motivated seller needs you single-handedly take gambling from the equation.
Compensation
When a real estate bird dog locates the investments property or leads, they then provide this information to the investor. After the closing on the property, a bird dog is then compensated a fee which is generally a percent of the dealings or sometimes it could be a flat fee. This will depends on the bird dogs original negotiations with the investor. For some bird dogs the finder’s fee percentage could run in the 3% to 6 % range.
The Downside of Being a Bird Dog
Another note is that some states do require you to have a real estate license to be a bird dog. Please research this within your area if you are not sure.
Finding Your Buyers
In order to find buyers, you will first need to build your buyers list of investors that are currently looking for deals. Your investors equal the cash you need to close any good deals that you find. You should start with at least 20 serious buyers to unload any property you come to find. The easiest way to locate investors would be to search for them on craigslist or even placing and add in your local paper. A good real estate bird dog is as good as the buyers on your list. You can find buyers by also working closely with investors that can show you the ropes.
Locate Sellers
Once you have your buyers lined up you want to find properties to get a deal started. . A few ways to find your sellers are the newspaper, for sale signs in the yard, and placing your own ads in the newspaper and on craigslist. The best way to generate leads is from the internet.
Presenting your Deals
Once you have your buyer and the property for them, you want to have everything laid out for your buyer. The reason you want to present your deals to your buyers is first and foremost you want to look professional. You have to package your deals to make you look like a professional bird dog that knows your local real estate market.
A few things you want to have together:
- Property Address
- Asking Price
- Location of city
- Type of house
- Pictures outside are ok (preferably inside as well
- Pictures of houses in the neighborhood
- A brief assessment of the house
- Email Account
Provide all of those into a package and you will ensure that your buyers will appreciate it when you come around because all they have to do is research the numbers and tell you if there is a deal or not.
You can make some really good money once you learn how to place buyers and sellers in the same room so you can step in to make a quick profit. Being a bird dog is a great way to start becoming an investor. All it takes is a keen eye and great organizational skills to turn over or properties in the shortest amount of time for the most profit.
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Bird Dog for Beginners
There times that problems may occur such as you will assign a good contract to an investor who tells you they can close. That investor then turns around and assigns your contract to someone else who may or may not be able to close.
Another problem that can be found in some new bird dogs that they do not have a good understanding of this business, and are out-bidding other senior bird dogs for the property without taking into account all of the cost associated with rehabbing and selling the property. So what could have been a good deal for everyone ends up either not closing, because the lender will not fund enough or the investor will pass on it because they cannot make any profit. So if your property is not closing, you may want o see what you can do differently to ensure that most if not all of the properties that are placed under contract will be assigned and will close.
