Starting out as a wholesaler in real estate business requires high initial capital funding which may not be available to most novice investors. However, one can still work their way into the real estate wholesale business through other means that do not require high funding. Bird dogging is one of the easiest and most practical ways of making significant income from real estate with the least finances. A real estate bird dog basically acts as a middleman who receives commission based on sealed deals between buyers and sellers. The main aim of bird dogging is to hunt down properties that are ready to be sold and source interested buyers. The job may seem simple but includes a lot of networking and hunting.
How a Real Estate Bird Dog Works
A bird dog, also referred to as real estate jobber or deal scout, is paid referral fee by the investor for finding distressed real estate property. Distressed real estate simply means property whose owners are almost desperate to sell. The phrase can be used synonymously with motivated seller leads. The deal scouts are therefore property finders who search for ready-to-be-sold real estate property and refer buyers such as wholesale investors. When the property is sold and deal sealed, the real estate investor pays a small fraction for the referral. Searching for seller leads and connecting them with active real estate investor is not as lucrative as property flipping. Nonetheless, it is a good starting point for beginners who have little real estate knowledge, confidence and funding. As a real estate bird dog, there is no requirement that subjects you to signing a contract. The only duty is to find sellers who are having problems selling or those searching for buyers and connect them to investor willing to pay. The contract is made between buyers and sellers. The property finders only get paid for sealed deals.
Advantages of bird dogging
There are many benefits of starting out a real estate bird dog. Some people do this as their full-time job while most practice it as a part time venture. Some of the advantages of bird dogging include;
- You can make money from completed transactions with limited financial or business risks especially since you do not sign any contract
- You can earn money while you continue learning about the real estate world and business
- Build a list of contacts containing active investors and wholesale buyers. This will be very important for future prospects
- It can be done as a part-time venture while you learn how to create discounts or decide whether real estate is your appropriate career.
Despite the benefits of limited risks and initial fees, bird dogging also has a few demerits. Perhaps the main disadvantage is that hunting down properties for sale requires heightened networking, learning and prospecting while its remuneration is only a small fraction of the deal. When compared to the profits made in actual property flipping, a bird dog’s earning is quite small. It requires several deals before compiling the money to become an active income buyer.
Bird dogging is a common practice that fetches good money for beginning realtors. It also offers a chance to learn and develop real estate prospects. Bird dogging is usually a temporary involvement that is taken over by active property flipping after compiling enough funding.