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About Bird Dogging in Real Estate
In the world of real estate investing, finding the right property at the right price is very crucial.
There are many ways through which a real estate investor purchases potential properties such as MLS, pocket listing, etc.
However, one very unique way to find potential investment properties is through bird dogging. In this post, we will understand what is a bird dog in detail.
What Does Bird Dogging Mean?
The name bird dog comes from hunting, where dogs are trained to find fallen birds for hunters. An individual in real estate is referred to as a “bird dog” who financial asset for other real estate professionals.
A bird dog is an individual who looks for real estate properties that are off-market or undervalued and offers them to investors in exchange for a percentage of net profit in the transaction or a flat fee.
A bird dog is not a licensed real estate agent, instead, they work with other bird dogs and build a network in the area they work to find properties that could bring potential profits for the real estate investors.
How Does Bird Dogging Work?
In the world of real estate, bird dogs search the market for foreclosures, short sales, distressed properties, or other investment opportunities. Once the bird dog finds a property, it contacts a reliable investor.
The investor has to decide whether he wants to continue with the project. Bird Dog earns money by paying a finder’s fee through an investor.
For example, let’s say you’re a bird dog and you found a foreclosed property that could bring potential profit for any real estate investor. You contact the real estate investor and tell him about the property.
Once the investor decides to purchase the property that you have suggested, you would be paid by the investor either a flat fee or a percentage (2% to 8%) on the total sale transaction amount.
What Are The Pros And Cons Of Bird Dogging?
Let’s take a look at the pros and cons of being a bird dog and see if this is the right choice for aspiring real estate professionals.
Pros:
Here are some of the pros of bird-dogging.
- Bird dogging is low risk and requires little involvement: Bird dogs are less risky because they are a type of real estate investment that does not require a bird dog to buy the property. Also, it has a low commitment because once they hand over the property to their investors, they no longer have responsibility for the property.
- Bird dogs can work part-time or full-time: Bird dogging does not need a full-time commitment, which means that you can be flexible and work a few hours a week or over the weekends.
- Bird Dogging Will Help You Get More Exposure to Real Estate Industry: Even if you don’t buy the property yourself, bird dogs can learn a lot about the house, especially when you learn to find potential properties. Newcomers to real estate may find that becoming a bird dog is a great way to learn about the real estate industry.
- Bird dogs may get good profit: It is possible to make good money as a bird dog, especially because they do not invest their own money.
Cons:
Here are some of the cons of bird-dogging.
- It could be a difficult job: One of the biggest drawbacks of bird-dogging is that it can be challenging. You have to spend a lot of time and effort to find a good business, and even then, there is no guarantee that you will succeed. Finding great deals can be difficult, as can finding investors who will benefit from the deals you find.
- Risky Commission-Only Service: Bird Dog is a commission-only service, which means you only get paid if the deal is completed. This can be a dangerous situation because there is no guarantee that the deal will close. If the deal falls through, you don’t get paid, which means you could end up spending a lot of time working for free.
- You can be ripped off: Unfortunately, there are always people who try to take advantage of others. When bird-dog, you have to be careful about scammers who may try to take advantage of you. Be sure to do your research and always work with reputable people. The last thing you want to do is find an investment opportunity for someone and not get paid for it.
Conclusion
If you are new to the real estate industry and are willing to spend time learning the business with minimum or no investment, bird-dogging could be one of the best options for you.
Before you decide to take this chance, make sure that you have all the points of risks covered. As a bird dog, make sure that you sign a contract with reputable investors that can pay for your service.
You can get help from a real estate attorney to finalize the contract that could be appealing to the investors. Make sure that you research the area where you are planning to work as a bird dog.
