BirdDog Payments
How are birddogs usually paid if they make money from the difference between the price on the contract and the price the investor pays for the contract? Is it by business check or cashier's check? Also, at what tax rate would the birddog be taxed for this money?
What you're proposing isn't birddogging, its wholesaling. A birddog does not put a property under contract.
To answer your questions, as a wholesaler you would be paid at closing for your assignment of contract. You would receive a check from the title company or a wire transfer, usually your choice if available. Your income is taxed at short term capital gains rates, which is the tax rate for whatever bracket you fall into.
-Chris
[addsig]
Birddogs are normally paid by a company check after the closing. The birddog will receive a 1099 from the investor if he earns over $600.00 during the year tax is due. He will also pay self-employment tax+the normal tax rate.
Thanks for the quick responses!