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Bird Dog Real Estate Explanation and Guide

Bird Dog Real Estate Explanation and Guide

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At New Western, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.

In real estate, the term “bird dog” refers to a someone who finds promising investment properties. They often then present them to a real estate investor in exchange for some sort of payment. Using a variety of tactics, “bird dogs” scour the real estate market for homes with promising earning potential. Learning the basics and developing a methodical approach are very important for people who are just starting and want to take on this job.

 

What Is Bird Dog Real Estate and How to Do It Successfully

 

Educate Yourself

Before you can become a real estate “bird dog,” you need to make sure you understand how the business works. Our complete real estate investing guides are probably the best place to start. Robert Kiyosaki’s “Rich Dad Poor Dad” and Brandon Turner’s “The Book on Investing in Real Estate with No (and Low) Money Down” are both great books to dive into. You can also learn new things and stay up-to-date on the latest strategies and trends by using online learning tools like our New Western blog.

You can get better at finding investment options and feel more confident about it by setting aside time to study, joining real estate investment groups, and doing deal analysis with real property listings. If you travel a lot and have a lot of down time, listening to podcasts like the “BiggerPockets Real Estate Podcast” can be another great way to learn as well. 

 

 

Key Characteristics of a Good Investment Property

To find a good investment home, you need to know what to look for. Part of this skill set is the ability to figure out how much a house is below its market value, how much it will generate in rental income, and how much it will appreciate in value over time. You can learn a lot about the real estate market on Zillow, Redfin, and the Multiple Listing Service (MLS). For more in-depth information on a property’s financial potential, use tools like DealCheck to analyze investment properties and their profitability, among other things.

New Western has created several educational guides that can help you learn all about real estate investing, the different strategies real estate investors use, how to market properties, and so much more.

Direct Links to New Western Educational Guides:

 

To be successful, you need to be able to correctly estimate net yield, cash flow, and return on investment. You should also focus on properties in areas that are growing, and you should know how the condition of a property affects its value.

 

 

How to Develop Your Property-Finding Skills to Become a Successful Bird Dog

If you want to find real estate deals for  investors, you have a few options. A few typical methods for identifying real estate opportunities include:

  • Driving for Dollars: This means going around neighborhoods looking for distressed properties—homes that show obvious signs of neglect. Look for things like for-sale-by-owner signs, overgrown landscaping, broken windows, or windows that have been boarded up.
  • Online Research: You can find homes by using Zillow, Redfin, and other online real estate sites, as well as public records and foreclosure ads. If you want to make your search more specific, learn how to use filters and key terms that will narrow down your search.
  • Networking: Successful real estate bird dogs are networking masters. They reach out to real estate professionals like real estate brokers, agents, and even real estate attorneys, as well as cultivate a solid network of investors, contractors, and even property managers. They attend real estate business seminars, meetings, and networking events, all in the name of getting leads for motivated sellers.

 

 

How Real Estate Bird Dogs Leverage Technology to Get Leads

Technology has revolutionized many aspects of the real estate business—finding potential deals is just the tip of the iceberg. Here’s a few ways you can (and should!) use tech to enhance your real estate career.

 

The New Western Advantage

Real estate “bird dogs” can greatly improve their arsenal by using New Western as a resource for discovering investment properties. In addition to having a huge selection of off-market properties, New Western also gives access to a wide range of possible investment possibilities, usually with sellers who are eager to sell, that are not open to the public.

For the those who want to give their investors unique and successful deals, this exclusivity is priceless. Offering detailed information and insights that can speed up the due diligence process, the app makes it easier to find and analyze properties.

Furthermore, New Western’s focus on investment properties means that every post has already been checked for its potential as an investment. This saves bird dogs a lot of time and effort that would have been spent weeding out properties that weren’t good investments.

Bird dogs can make the deals they offer to investors better and more plentiful by using New Western. They can also build a reputation for getting access to exclusive, high-potential investment opportunities, which increases their value and dependability in the real estate market while making it more competitive.

Use Real Estate Tools

Get to know the real estate apps and tools that can help you find and evaluate properties more quickly. This includes (if possible) access to the multiple listing service (MLS), real estate investment analysis tools, and property data platforms.

Here’s a short list of real estate tools that are quite helpful:

  • DealCheck: DealCheck is a popular tool for real estate investors, allowing them to analyze deals from anywhere, access basic property information, and share property reports with business partners, lenders, or property managers. It syncs data across all devices.
  • RentZend: RentZend is a useful data calculator for investors, providing property information like tax records and rental rates, allowing easy adjustment of return assumptions, and sharing reports with partners.
  • Trulia: Trulia is a valuable tool for investors, providing information on properties for sale and rent in the US, as well as free mortgage tools like affordability and refinance calculators, allowing for a thorough analysis of loan options.
  • Bankrate: Bankrate is a useful tool for real estate investors to verify mortgage rates and payments, offering more than 200 financial calculators. It allows users to input property price, down payment percentage, and interest rate, enabling them to compare rates and estimate financial decisions.
  • Rentometer: Rentometer is a valuable tool for verifying rental ranges for properties by providing data on comparable properties, average and median rent, and percentiles, and comparing rates to the neighborhood.

 

Social Media and Online Marketing

Mastering online marketing and social media is essential for growing your network and finding potential deals in the modern world. For connecting with professionals in your field and sharing useful material, sites like LinkedIn, Facebook, Instagram, and Twitter are great options.

By using scheduling software like Hootsuite or Buffer and tools like Canva to make it easier to create and manage content, you can keep your online profile active and professional.

By sharing market insights, investment tips, and properties on a regular basis and networking with real estate investors, agents, and peers, you can greatly increase your profile and usefulness as a bird dog.

 

 

How to Analyze and Present Deals Like a Professional Bird Dog

Another key aspect of becoming a successful real estate deal finder is knowing how to analyze a deal and present it in a way that entices motivated buyers to make an offer.  To do this, you need to learn how to analyze deals and create a property report.

When you’re analyzing properties, you need to be aware of key metrics like a property’s return on investment, cash on cash return, estimated cost of repairs, and after-repair value (ARV).

We have articles on our blog that go much further into detail about this. They are:

Once you’ve done the research and compiled all of the important information, you’ll need to create a comprehensive report that includes property details, your analysis, potential repair costs, and photos. This report should provide the potential buyer with a clear picture of the investment opportunity.

 

 

The Legal Side of Being a Bird Dog in Real Estate

In most cases, it’s legal to be a bird dog to help real estate investors find distressed properties. However, it’s illegal and frowned upon for licensed real estate agents to act as a bird dog for their clients. Additionally, a bird dog shouldn’t pose as a real estate agent or broker unless they actually hold that license. An example of this would be a bird dog pretending to be a real estate agent or making false claims to a homeowner. Obviously any type of dishonesty is never a good idea.

Make sure that everything you do is clear. Your number-one goal should be to provide high-quality potential property deals that are accurate and consistent. The key to success in this position over the long run is building trust. Your real estate business will expand organically as you gain a reputation for reliability, which will bring in more and better investors.

People who want to become bird dogs or hire one should talk to a local real estate attorney first. When you talk to a real estate attorney, you can be sure that you’re following all state and local laws when it comes to finding and setting up real estate transactions

 

 

How Bird Dogs in Real Estate Are Paid

There are three compensation methods for getting paid as a bird dog in real estate: a flat-fee model, a percentage of the deal model, and a hybrid of the two.

 

Flat-Fee Model

With the flat fee plan, bird dogs get paid a set amount for each property lead they provide, even if the deal doesn’t go through. In this case, the fee would be $500 for each tip that meets the requirements of a real estate investor.

Pros:

  • Predictability: You know exactly how much they will get paid for each lead, which makes their pay more stable.
  • Simplicity: This model is easy to understand from the start, with clear contract details.

Cons:

  • Limited Earning Potential: You can only make a certain amount of money per deal. This means that if an investor turns a lead into a very successful deal, you don’t make any money.
  • No Reason to Close the Deal: Since bird dogs are paid per lead instead of per closed deal, they might not be driven to make sure the leads are good or viable. This is a downside for all parties involved, and requires always acting in good faith to be successful.

 

Percentage of the Deal Model

If a deal goes through, bird dogs get a cut of the profits based on the leads they give. For example, if a bird dog’s contract calls for a 5% fee and the deal makes $100,000, the bird dog will get $5,000.

Pros:

  •  Higher Earning Potential: This model offers the possibility of significant earnings, especially if the lead results in a highly profitable deal.
  • Alignment of Interests: Bird dogs are motivated to provide high-quality, viable leads, as their compensation is directly tied to the success of the deal.

Cons:

  • Uncertainty: Compensation depends on the deal closing and being profitable, which introduces a degree of financial uncertainty.
  • Complexity: The need to track deals from lead to closure and calculate earnings based on deal profits can complicate the payment process.

 

Hybrid Model

The hybrid model takes parts from both the flat fee and percentage methods. For example, a bird dog might get a small flat fee for the lead and then a share of the income if the deal runs smoothly. Bird dogs, for instance, could get $250 up front for each suitable lead and then 2% of the deal’s profits when it closes.

Pros:

  • Balanced Incentives: Bird dogs enjoy the predictability of a flat fee while also having the opportunity to earn more if the deal is successful.
  • Motivation for Quality: There’s an incentive to provide leads that are not only numerous but also of high potential, as part of the compensation is tied to the deal’s success.

Cons:

  • Complex Agreements: Negotiating and managing hybrid compensation agreements can be more complex than sticking to one model.
  • Reduced Upfront Earnings: The flat fee portion of a hybrid model is typically lower than what would be received under a pure flat fee model, potentially reducing initial earnings.

 

Negotiating the Bird Dog Contract

Do not be surprised if a property investor wants to try to negotiate your fee. When negotiations start, don’t hesitate to toot your own horn! Here are a few areas you can focus on to help negotiations sway in your favor:

 

Lead Quality

The quality and possible worth of the leads you give them should affect how much you get paid. If you want to be a real estate bird dog and get paid fairly, you have to negotiate your terms with the investor in a fair and strategic way. You should know exactly what you can offer before you start negotiating. For example, you should keep thorough records of the potential property leads that turned into properties under contract and how many have successfully closed, know the average bird dog fees in your area, and be able to explain how your bird dog services save the investor time and money.

 

Track Record

Begin the conversation by talking about your track record. Stress the quality and profitability of the leads you’ve given, and explain how your work helps the investor succeed. You should be willing to talk about different ways to get paid, like a flat bird dog referral fee, a percentage of the deal, or a mix of the two. You should also be ready to explain why you think a certain model works best for the investor’s strategies and your input.

 

Listen to Their Concerns

When you’re negotiating, it’s also important to hear what the investor has to say. You can offer a compensation package that fits their goals and risk tolerance if you know what worries them and what’s most important to them. If the investor isn’t sure about some of the terms, you could offer a trial period to show how valuable your leads are, or you could be flexible with the percentage or flat fee based on success metrics.

 

Open Communication

Remember that the goal of any negotiation is to find an answer that works for everyone. If you go into the talk with the goal of working together and helping each other, you can come up with a compensation plan that recognizes how real estate bird dogging can be beneficial for them and builds a long-term, mutually beneficial relationship with the investor. Keep the lines of communication open and honest, and be ready to go over the terms of the agreement again as your relationship changes. This way, you can make sure that your pay continues to reflect the value and success you bring to the investor’s real estate projects.

All of this will help you make the right bird dog deal for your real estate business.

 

 

Final Thoughts on Defining Bird Dog Real Estate

Starting out as a real estate bird dog takes commitment, an open mind, and a never-ending quest to improve. As you follow these steps, you will be well on your way to becoming a successful bird dog, offering invaluable services to investors, and setting yourself up for a real estate career of your own, all without needing a real estate license!

Remember that being diligent, honest, and consistently providing high-quality leads is what it takes to be a successful real estate bird dog.

 

And don’t forget

Disclaimer: The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.