BIRD DOG REAL ESTATE: HOW I MADE $1,000 DRIVING (Without Uber or Lyft)
To bird dog real estate is a completely new concept for me. I am glad Caleb Jones chose to share his experience as a bird dog for a real estate company.
It was a blazing hot Saturday. The July sun was already punishing the pavement with 93 degrees at 10 a.m. The air was sticky with humidity. Summer cicadas sang as the melting tar let off that distinct odor. I was glad to reach my office.
The oppressive heat had not eased my morning drive to the office. I had been restless.
I often used the time driving to my office in my run-down sedan, with no air conditioning, reflecting on my life. Or, about how I could make some extra money. That day was no different.
How I Was First Contacted to Bird Dog Real Estate
I was sincerely hoping I’d find a way to earn a few extra bucks.
That day, a guy had come by and handed me a card. It said “Exchange this card for $1,000” across the top with emphasis on the “$1,000”. In addition, there was his contact information and a list of specific things to look for in a house. Things that didn’t make sense.
- Has tall grass
- Looks abandoned
- Notices on the front door
- Boarded up windows
- No realtor sign
Why on earth would you want a property like that?
This guy explained that I could drive through a neighborhood and send him the addresses and pictures of any house that looked like that.
He left, and I kept the card on my desk. My car didn’t have air conditioning. My wife was pregnant. We had $36,000 in student loans. We dreamed of financial independence. Hey, it might even be nice to save some money. One thousand dollars…
I was curious.
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Who Is A Bird Dog
According to Investopedia, ‘a bird dog is a real estate investing term that refers to someone who spends their time trying to locate properties with substantial investment potential. A bird dog looks for motivated sellers or undervalued properties intending to pass the deal on to a real estate investor in exchange for a percentage or fee.’
How I Was Convinced to Bird Dog Real Estate
I looked at his website. It seemed to be from an established local real estate company. I called his office. The phone rang once. Twice. “Hello!” a cheery woman answered. I briefly explained the strange offer I received.
She verified, “He’s a real estate investor in the local area looking for distressed properties.” The company was real and actually existed!
I let out a breath of relief. Finally, my shoulders could relax. I hadn’t realized they were pent-up. Nor did I realize how badly I was crouching toward my screen. You could’ve replaced me with a church gargoyle and never seen a difference.
“We will send you $1000 for every referral you send us after we secure the deal,” she added.
Suspiciously I asked, “How do I know that?”
She didn’t skip a beat before happily responding, “We have several other bird dogs, would you like their numbers?”
Doing My Due Diligence About Real Estate Bird Dogs
I called up the supposed bird dogs. They were not family (first question), and they vouched for the authenticity of the offer (second question). The last bird dog I talked to was a middle-aged father of 3 with a hard voice who mentioned this investor was house-flipping.
That answered one question. Why would he pay me $1,000? Because a good house flip is worth an average of $25,000 in profits and finding a deal that crazy takes time. Time better spent flipping instead of searching.
“You can get a bird dog contract with them,” he continued, “ At least that way you’ll have legal recourse if they try to screw you over, or you can remind them they owe you if they make an administrative error.”
I did want a bird dog contract. That seemed like a smart idea. I called the company and asked for one.
“No problem!” the cheery woman said. Within the hour, she sent a standard bird dog contract via DocuSign. I signed it after reading over it carefully. Now I needed to drive.
My Day as a Bird Dog
7:55 AM – Armed with a pen, some paper, and enthusiasm, I hopped into my car. The tires screeched a bit as I tore away. Images of $1,000 deposits flooded my thoughts. Several neighborhoods nearby came to mind while I was making my attack plan for the day. I peeled into the first neighborhood and drove, and drove…and drove.
8:30 AM – The humidity was increasing. A few houses caused me to slow down my driving, but they were a little dirty, not distressed. Time to move to the next neighborhood.
A Change of Neighborhood
8:53 AM – The first street of neighborhood #2 looked like Mayberry. Pristine. The road kept going after the first two dozen Mayberry houses ended. Not yet ready to give up hope, I followed the street. A new, much rattier cluster of homes rested in a small nest of hills just 200 yards from Mayberry.
I parked in front of the first dirty house with broken blinds. Was it distressed enough? The grass grew a bit high. Did that count? I wrote down the address and snapped a picture. I’d been out for almost an hour. This had to count.
9:05 AM – The term “distressed” became more and more liberal as I wrote down most of the addresses in this group of homes. Time for a change of scenery.
The Next Neighbourhood
9:20 AM – It was in the mid-80s now. My shirt stuck to me. The tediousness of driving in the heat was making me grumpy, and neighborhood #3 was easily the biggest. Great. I only had six distressed-ish houses on my list. Maybe trying to bird dog real estate wasn’t my thing?
9:30 AM – FINALLY, a beauty. A great boarded up, broken windows, grass-too-high, squatter-ready beauty! Was that a yellow notice from the county on the door? I could’ve cried. My spirits soared with this dog of a house. There was hope! I crossed off the other houses on my list and proudly wrote down the details of this Picasso. With renewed zeal, I zipped through the next two streets.
9:38 AM – TWO! Two shanty houses across the street from each other. The heavens opened and angels sang!
9:57 AM – I found 9 houses in neighborhood #3 in short order. What a morning!
The Seeds of Doubt
10:00 AM – I had already spent over 2 hours driving around in scorching weather. How did addresses and pictures equal $1,000? How stupid was that? Should I even send these? I felt like an idiot. My family was waiting for me at home, and I’m looking for meth labs feeling like a creep driving through strange neighborhoods. I drove to the gas station white-knuckling my steering wheel.
10:15 AM – I pumped $10 of gas back in my car. I would’ve been hot even without the 90-something temperature. I was angry at myself.
10:26 AM – I stared at my list for 10 minutes in deep thought. Should I send it? Was it worth doing?
10:36 AM – I had just spent the morning noting down addresses and taking pictures of shady looking properties. I wrote down a total of 15 homes. Why did I do this? Desperation, that’s why. Oh, phooey! I have the blasted list, I may as well send it. Who knows, maybe it’ll work. I sent the list, including the distressed-ish houses, and crossed my fingers.
To Bird Dog Real Estate You Need A Ton of Patience
Property scouting and lead generation are the key skills needed to successfully bird dog real estate. But that is not all.
After I had sent in my list what followed was total radio silence.
I too stopped trying to bird dog real estate. How could I? Time and money were in short supply already. Why bother? In addition, it felt kinda embarrassing.
I forgot about the whole affair. Life moved on.
Five weeks later I got a notification from PayPal. I absentmindedly checked it over a bowl of cereal.
A THOUSAND DOLLARS! My Cheerios tried to choke me to death. My pulse blew past 200 beats per minute. Time slowed while my butterfingers dialed the real estate company.
“We were able to secure one of the leads that you sent us. It took a lot of haggling to close the deal, but we finally got it. Congratulations!”
What I Wish I’d Known Before Trying to Bird Dog Real Estate
Here are some important facts that I did not know when I started.
1. My first day was totally normal. It’s like starting a new job.
2. It takes a long time to get paid. A really long time. Think weeks, not days.
3. A normal number is 1 in 50 leads earns a check. It turns out that I was extremely lucky to get a deal out of a piddly 15 leads.
4. You should only be paid a flat fee for your referrals. If you get paid a percentage of anything, you may be acting as a real estate broker. That is illegal.
5. There are many other real estate investors look for bird dogs. It pays to have more than one place to send leads. Plus, most investors are looking for specific property types. In fact, it works better for them and for you if you only send the type of properties–single-family, multi-family, commercial, etc.–they are looking to buy.
6. You can earn more if you do a little legwork by researching the properties that you are about to send over. Most of the time, you can be paid an extra $500 or $1000 more for getting the research done. Double-check with your investors before you try that time-sucking activity.
7. Do not bother contacting the property owners yourself. In fact, I would say it’s not in your best interest to try to secure a deal as a bird dog. Your time is best spent driving for dollars.
8. The method I used to locate houses is called “driving for dollars”. There are multiple ways to find houses to send to real estate companies or investors. Driving for dollars is only one of them. I’d argue, it’s the most effective, but you can also look through county records, skim the MLS (not recommended), or search for put up bandit signs. Bandit signs are those “We Buy Houses Any Condition” signs on the side of the road.
9. There is another class of real estate bird dogs. It is called a wholesaler. A wholesaler will lock up a distressed property with a “subject to” deal. “Subject to” means the deal they have is subject to a contingency like the approval of a partner, securing of funding, or any other contingency they can come up with. They will then find an investor to fund the deal.
Money is earned by having an assignment fee of $5,000 to $35,000. BiggerPockets wrote an ultimate guide to wholesaling if you want to know more about it. Make sure you know your state’s laws on what is and what is not real estate brokering before starting.
How You Can Bird Dog Real Estate
I found out later that my recruitment experience is highly unusual. Normally, it works in reverse. You chase an investor to be a bird dog for them. Here’s how you can start to bird dog real estate.
Step 1. Find a local Real Estate Investing Association, REIA. Attend one of their meetings. Talk to a handful of investors that are looking for bird dogs. Write down exactly what kind of homes or properties they are looking for. Not every investor is looking for single-family homes. For example, some are more interested in commercial real estate.
Step 2. Go driving for dollars, and send your leads to the right investors.
Step 3. Finally, get paid!
Uber and Lyft are good ways to work in your spare time. However, when you calculate the hourly rate of driving for dollars vs driving for them, you’ll find that going to bird dog real estate wins every time.
If you want to get started bird-dogging, follow the three steps above. Let me know in the comments if you plan to try it out, or if you have done it already.
Caleb Jones is an unapologetic Content Marketing Consultant, influential Personal Finance Writer, happy dad, happier husband, and can’t decide between Star Wars and Star Trek. You can find him at his blog monkeyseemonkeydough.com or on Pinterest @monkeyseemonkeydough.
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