Is This The Basic Idea Of Bird Dogging? Uber N00b Q
I find a house for a great deal/sell it to an investor/make money.
I have a couple Q's about the above process.
If I find a house with a lot of potential for an awesome price do I
(A) Buy the house/Get a contractor quote for repairs/get a mock appraisal of the future value/then sell to an investor for more than I bought if for.
OR
(B)Have the owner sign a contract to sell to me at a certain price/sell the contract to an investor/and collect a finders fee from the investor.
I'm doing research as we speak just want to make sure I have the basic principles down.[ Edited by scarywoody on Date 06/23/2004 ]
essentially. Yes! A) or B) depending on your circumstances at the time. If you buy the property, you will have to fund the deal. You might not be able to do this starting out, and that would mean that B) is a better option for you.
Generally the way the terms are used A) would be wholesaling and B) would be birddoging
Wait. I thought if you were birddogging you weren't getting anyone to sell you anything, you just found the lead for the investor and collected a finders fee.
The "finder's fee" in B also sounds like a wholesale deal to me.
Please set me straight...
Actually they both sound like wholesale to me. <b>A</b> sounds like it's a wholesale on a rehab. <b>B</b> sounds like it isn't a rehab.
I must be way off. Or something.
scarywoody,
Glad to meet you.
What you describe in A & B is wholesaling.
Bird Dogging is what I call the No Fear, No Liability, No Money way of starting your career.
You only find deals for an investor and get paid for providing a lead. You can talk with a seller if you like, due extensive due diligence on the property, the more you do the more the lead is worth to an investor.
However, the minute you enter into a contract with a seller you take yourself out of the realm of a being a Bird Dog.
John $Cash$ Locke
PS: Micah, thanks for bringing this up, no sense putting someone in harms way when they are just starting off their investing career, sign the contract bear the liability.
[ Edited by JohnLocke on Date 06/23/2004 ]
Micah,
Experienced birddogs put the property under their control by way of a signed agreement with the option to assign the contract to anyone they choose. Therefore scarywoody's plan B is birddogging.
In plan A he says he is "buying" the house, doing all the number crunching and some due diligence, and then selling the deal to another investor for a profit. That is wholesaling.
CommercialKing hit the nail on the head. Just thought I'd try another take on it to help clarify for you.
Dave
[addsig]
Dave,
I think you will find this article by William Bronchick, Esq., also an investor in his own right detailing the difference.
http://www.legalwiz.com/articles/flip.htm
Now Bill and I go along with this one on what a Bird Dog is.
John $Cash$ Locke[ Edited by JohnLocke on Date 06/23/2004 ]
Well, I certainly don't want to argue with John Locke, who after all, wrote the book on Birddoging. If he says B is wholesaling then i guess wholesaling it is.
I think that this does point to a certain flexibility in the way these terms are used in the industry. In John's definition what a birddog does is find. The investor does all the signing.
Everything from signing to where someone starts swinging hammers is Wholesaling.
After you've started your renovation then you are no longer a Wholesaler you are a rehabber.
I guess the point is that each step has the possibility of added value. Theoretically the property is worth more after the permits are approved and before any work begins than it was before the permits were issued.
And that if you're willing to take the risk of signing a document then, at least according to John, you've graduated from Birddoging and gone on to being a wholesaler. Congratualations. Here's your cap and gown.
Mark,
It is the natural progression of things, normally you learn to crawl before you walk.
I have seen investors start out walking and some have a comfort level of crawling a little first, let's not forget we are dealing with people who are still asking "what's a deed?" let alone having them go out and sign one without guidance or experience.
John $Cash$ Locke
I'm on the same page with everyone then.
commercialking - the cap and gown was hilarious.
John$Cash$Locke,
I stand corrected. I read your link on your post and agree.
Dave
[addsig]
Dave,
You know I thought I was wrong once, but come to find out I was mistaken and wasn't.
You are doing a great job helping members here at TCI, so keep up the good work.
John $Cash$ Locke
Thanks for the replies. They were very helpful. I guess the thing to do now is talk to some investors, find out some resources for distressed, and figure out a way to get the information I need to sell the investor on a distressed property. Pshhh is everything this easy
http://www.legalwiz.com/articles/flip.htm
So in the article descibing the scout/dealer/retailer would it be feasible to start as a dealer? I like the idea of controlling the property, but I do understand the benefit of starting as a scout gaining more experience with what dealers and retailers want. hmmm thanks again for the replies
[ Edited by scarywoody on Date 06/23/2004 ]
I think has to do w/ your financial situation and how simple or easy ther deal is.
I have been looking at 2 adj. ~1acre ea. lots and have been salivating over the back end numbers. Until yesterday, when the county environmental health dept. got back to me.
"We have deem those lot to be undevelopable". Too steep to support a septic field.
So if I were and dealer and ran and bought them / put them under contract I might have been on the hook in some way financially.
I believe and I think this is what John and other are saying too, if you really have your bird-dog skills nail, it maybe time to move up a notch.
point very well taken...thanks
I am a newbie to the REI world and I got the understanding that birddogging is: No Fear, No Liability, No Money way of starting your career and that you only find deals for an investor and get paid for providing a lead. But where do I find the investor and how do you negotiate what I would get paid? Also where do I start? :-?
read this article:
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=489
Thanks for the article it was very informative and gave me some insite of how to get started.
Could someone please explain to me what the actual duties of Bird Dogging is? I know that you are the person that find the property for the investor, but I'm not sure of where do you go from there. Could I please give me some insite? I have been reading the different postings on the site but I think I may be getting confused on the duties.