Am I Paying This Bid Dogger Right?
What an excellent forum this is. I'm new here and have not been involved with RE for some years, but am deciding to dip my toes in again.
Anyway, I've aligned myself with a Birddogger here in the Seattle area, and am thinking of paying him 1% of the buy price.
AM I NUTS? or am I just paying him well.
I've looked at this forum and cannot find any direct comments on paying birddoggers --- yet I'm sure there have been many. Also done a search on the site to no avail. So I'll post it here.
Since I have not birddoged myself, at least not for someone else, I'm imagining that it will take from 10 - 30 homes for one to go through. That's a bunch of work for someone.
So with a $359,000 home, he would receive $3,590 after closing.
Hey, I figure the owner needs to pony up to the bar themselves.
I know John has a birddogging book available, but that takes the fun out of figuring things out for yourself.
Any comments, good -- bad or ugly.
Thanks
I'm looking to birddog in the central Florida area and the going rate is a $100 to $500 per deal, and that needs to stated in the contract so there will be no questions down the road.
ratatatat,
Glad to meet you.
Just one question, if it takes the fun out of it by making the investment in the book, why are you asking instead of figuring it out for yourself as you stated?
Just having a little fun, however not a bad question. I have paid my Bird Dogs up to $25K for a good deal, I made money the Bird Dog made money, so why not pay someone that helps us make money.
Let's also look at the loyalty factor, I have never been adverse to helping someone albiet, a Bird Dog or Investor, it all comes back 10 fold on way or another.
Welcome on board this board, keep them Bird Dogs happy and well fed.
John $Cash$ Locke
I've just gotta blame this one on the lady. First she starts out with this thing about all the books I've bought and blah blah blah! --- and she doesn't even have an inkling on the ebooks yet.
So, sometime last year, I came to my senses and said something like -- " Maybe I CAN think for myself . . . if I just try."
This is the path I'm on now. No more books, no more school --- just do it! I've been known to do some dumb things in my time --- this may be another one of them, but I'm going to give it a whirl.
This must be what it's like to be blind, just going in a direction till you bump into something, then tacking and going some more. Eventually we get where we want to go.
Thanks for the feedback!
ratatatat,
I wish you nothing but great sucess, my wife was the same way until she picked out her Mercedes, of course it was the real expensive one courtesy of Subject To investing and the Bird Dogs who helped me.
Most, not all, the people I know who just went out and did it never did do it or a least didn't do it right.
John $Cash$ Locke
John Locke is right about the loyalty factor. I am a birddog and if someone pays me well for a deal, I am already at work to find them another. Paying a birddog well means they will keep bringing you new deals which means more money for you. I usually get about 15% of the investor profit, which comes out to 3K of a 20K profit. I find that to be a good guideline to go by but that is in no way set in stone. I hope it helps.
Chris
It's all about trial and error. But if we are are not armed with some kind of knowledge base on what the heck we're supposed to be doing, then what are we doing??? I'm with John Locke, a part of the fun (and less heart ache) IS not having to reinvent the wheel and LEARNING from those folks who have already made it. So, I will continue reading my books, AND ebooks to my heart's content. Mr. Locke I'm be purchasing your bird-dog book.
The BLAH BLAH lady
I think that 1% is way too high on the property you listed. Is it too high every time? No, but I would need to have more information about how you received help and what the bird dog did to earn the funds. Did they do all the research, or did they merely give you a name and very little information?
I think having a standard percentage that is so high can do you more financial damage than you are estimating. I would be conservative but fair until you and the person have worked together more etc.
I think you have to be fair, and be smart. I personally dont have tons of cash to throw to bird dogs (unless warranted), and when you add up the costs of acquiring a property, even if done creatively, throwing 1% on top can break a few deals in my book.
I would do what you feel good about, but also be wise in how you spend your funds.
Also be careful that expectations for the bird dog are managed properly, it might be wise to say that in this case the fair ammt is "X" $$$, but that each transaction is a separate one and that you are fair, but that it is a business..
Call me fickle, but parting with $$$ should be done with great caution.
GL
Two things I know are true:
Always pay your help well so they WANT to work for you. I don't think 1% of the gross sale amount is high nor do I think 15% of the net profit is too high.
The hardest thing I've found in the foreclosure market is to find the properties with enough margin to make a good deal so I'll take all the help I can get.
[addsig]
cpifer,
You have to do what works for you, and if that works for you, great!
I would like to know where in the scheme of things that your bird dog puts up the funding to secure the deal, risks the credit in order to get traditional financing (when applicable), when they either work on the rehab, or front the money to hire the workers, where they pay the mortgage when you are either working on the project, or getting the deal finshed (selling or getting the buyer in) and where they are on the hook for the length of the holding time for the property?
I could go on and on about what role a bird dog plays in the process, but to me the finding part of the deal is important, but not nearly 15% of the profit, nor 1% of the deal..speaking generally, not specifically.
Not saying the role isnt important and valuable, but to me it has its part, but not to the extent mentioned here..
WSCapers
So what would you pay to someone who brings you a deal, and not much else? They don't do the research etc. etc.
Lets see...
First deal, depending on the effort put in, the ammt of $$$ I have to put into the deal, the amount I am going to get OUT of the deal, but based on these things being constant (not out of the ordinary)..
I would pay between 100-500, much as the person in Fla mentioned. Now if there was a relationship, or they did extra work or there were circumstances that warranted it, I would go higher. I dont agree that "the higher the profit, the higher the fee". I dont see the correlation. What I do feel is, the greater the time and the longer the relationship, the stronger the lead, the greater the pay.
But to toss out flat percentages, and for any bird dog who doesnt have a financial interest to ask for a cut of the profits is just unreal!!!
But to those who feel it is warranted, go for it, I just dont see it that way.
What would you pay to a bird dog who did a contract with the seller and found a buyer?
Pinky,
I dont want to hog this thread..
I speak to the people I work with before they talk to the seller. The bird dogs I deal with get the info, the details, and turn it over to me.
I want to be the only contact the seller knows, and any "investors" who call on my ads and want to work with me, I tell them that straight up. I wont take over any contract. For all I know they promised the seller the moon, and I might not agree with their determination. People dont take offence when I tell them that it isnt smart business to come in blind like that.
But I will say, that I havent done any deals with investors so far, but you never know. I do work with bird dogs, and am pretty close on a couple..but the terms are already figured out before the leads are turned over. I am also quite independant and I only work with a few..
I'm a bird-dog - I get paid $3,000 per deal I help get closed with a $30,000 spread. (I do more than just find the house - I also help work the deal)
I keep finding sellers and the investor keeps finding buyers - we couldn't do it without eachother!!!!
I agree with JohnLocke - the more contacts and relationships you have built, and the more you scratch their back and they yours, the more money everyone will make!
-refinder
refinder2003,
Glad to meet you.
This is why I say there is Big Bucks Birddogging, you are an example of what I am referring to.
As Investors or Bird Dogs, when we work together everyone makes money. I would pay $3K all day long if I make $30K off a deal.
Welcome on board this board and keep up the good work.
John $Cash$ Locke
hey refinder come my way wish that I could find a guy like u I do the finding financing and even the repair/work and the people just mentioning the deal want 1% silly.
I look at over 30 deals before I do one and then I do most of the work.....and the risk cuz I have the money!!!!!
Ha there are actually birdogs that do all that geeez PLEASSSSSSE give me a call ......have talked to 23 people that want to "birdog" meaning please train me!!!!! Forget that I!!!!
SKI
OK I offer $500 to every Tom Dick and Harriet I talk to.
"If you see a house that looks run down if it is run down and vacant even better call me with the address if I buy it you get $500"
I have gotten two deals this way!
I have researched 100s
If there are birddogs in Colorado that can qualify the properties better I have not found them.
I am a good buyer, make the price right I will be ready with the cash.
I would pay a lot more than $500 for qualified leads.
I can only see paying $500 to the one because ot the other 100+ I have to wade through to get to the one
Final note: if you want to bird dog in Colorado for me show me that you know what you are doing and I will pay more.
[ Edited by bob1082 on Date 07/27/2003 ][ Edited by bob1082 on Date 07/27/2003 ]