Bird Dog Question

this does not usually fall under a bird dog arrangement. The reason is that the scope intrudes too much into the purview of being a real estate agent. However, if you had a ownership interest in the property, you could find the buyer even if you owned just 1%. Just an idea.

Shirley,

The long answer is that you would have to check with the state in which the property is located (SC or NY or somewhere in between??). However right off of the top, I would think not.

Now to answer your other part of the question, I would advise your Rehabber that you might be able to find a buyer if she is willing to sell the renovated property at a discounted price....say 65 to 70% of FMV.

Let her know that your buyers do not pay full retail, but are always looking for a substantial discount when buying properties. And unless they are willing to walk away from a good deal of profit, it does not sound like your buyers would be a good buyer for her. Generally speaking most Rehabbers here in Texas either fix the properties to sell Retail, fix to sell with Owner financing, or are Landlords and they put their tenants into the property.

Hope this helps.

--Walter

'If it is to be, it is up to me'. --Anon

Thank you. How can I incorporate that into a contract or how do I express verbally to the seller what I need to do? This is new to me and I certainly don't want to do something to get myself into something I can't get out of.

Shirley

Hey Shirley,

Although I can appreciate the quasi-agent definition spoken of here, to me it's a simple matter of TRYING to help a seller out by TRYING to bring a buyer. Sometimes a handshake deal is fine, especially once you've done business with someone.

Maybe you urge the seller to enlist as many people as they can and ask her to set a ROCK BOTTOM price for you and you will TRY to see if you can bring him/her a buyer. To keep it on the up and up, why not do a simple agreement that states the rock bottom price and that you get anything over that as a fee if the deal goes through?

Let me know if this simple route makes sense.
-T

I understand the concept of helping someone out, but this is time consuming. If I had gotten what I wanted for the assignment, I would be glad to do it on a handshake (or a phone call). But I am working on trying to assign 3 other deals and trying to make offers on new deals... and it's keeping me pretty busy. On the other hand,iIf I did an agreement like you mentioned, it would still fall under the same scope of a real estate transaction so I don't think it could be done legally. I might be wrong. Maybe Bill can comment on this.

but there is a lot of things that seem to me a black and white issue and not too much of the grey involved. I have certainly done a number of deals across the country much as Tina has advised. However, there are a number of reasons why things are different in this environment. Real estate agents blame the activity of real estate investors for their own poor performance and are on the lookout to be snitches to the real estate commission of their state for suspicious activity. (Yeah, really, I've seen it done in four states)Therefore, the best offense is a good defense and in this case, structure your deals to the letter of the law for safety. Get your sellers to sell you (or gift you) 1% of the project for $XXX. Then you can receive a fair share after the sale as an owner. Since you have equitable interest in the property, you and your partners can divide the profits in such a way that you get compensated for your effort.

If she would allow you to go under contract with the property, that will satisfy most states agency definition. Check with your state board and tell the investor to sign a simple agreement so you can get to work.

do it legally!!

Affidavit of Equitable Interest

State of _________________

County of _______________:

BEFORE ME, the undersigned authority, on this day personally appeared __________________________ who being first duly sworn deposes and says that they have Equitable Interest in the property described as (enter legal description below):

Also known as: (insert street address, city, state, zip)

An agreement was entered into by and between the undersigned, _____________________ as Buyer, &
________________________, as Seller, on the ______ day of ___________, 200__
A copy of the agreement verifying the Equitable Interest of the undersigned may be obtained by contacting
__________________, whose mailing address is ______________________________________________ or you may contact ____________________ via telephone at____________________.

Dated this __________ day of ______________________, 20______.

FURTHER AFFIANT SAYETH NOT.

Signed __________________________________

Print Name ______________________________

STATE OF ______________

COUNTY OF ______________
Acknowledged and sworn to before me this _______ day of ____________, 200__. Witness my hand and official seal in the State and County aforesaid, this ___________ day of ____________, 200___.

______________________________________________
Notary Public

My Commission Expires: _________________________

Get it under contract and assign it. Tell the seller to give you his botttom price add 3k to it and assign it. just be transparent with the end buyer as well.
Where in NY is the property? I am in queens.
congrats on the original deal.
Richie

Before you can truly appreciate the value a bird dog can provide real estate investors, let's look at who these investors are. The first thing that comes to mind is a "flipper," buying homes, fixing them up and selling them quickly for a profit. Then there's the long term investor who buys homes as rental properties, realizing cash flow and appreciation over time. Either of these real estate investing strategies can be very profitable. Which an investor chooses is about their goals, temperament, and risk tolerance.

There are many more of these investors out there than most people think, especially the long term rental investors. Who are they? Only a few are the high profile type you see on TV. The vast majority are people you see every day. They own the local grocery store, or the dry cleaners. They are doctors, chiropractors and auto repair shop owners. These people have made a success of their businesses and have cash that they want to invest.

Running their businesses requires most of their time, and they tend to rely on traditional resources like real estate agents to help them locate investment property deals. They will usually pay more than they should for these deals, as the real estate agents are working out of the MLS, Multiple Listing Service, inventory. There isn't a lot of flexibility in pricing, especially with the commissions in the deal.

Many of these investors are buying multiple properties. What would their reaction be if they were contacted by someone who said that they could bring them home purchase deals for 10% to 40% less money than what they are currently buying? In other words, if they're buying 3 BR, 2 BA $100,000 homes, this person would locate and present to them 3 BR, 2 BA homes in the same area for $60,000 to $90,000.

The answer is simple, as they're in this to make money. The less they pay for a home, the better their Return on Investment from cash flow, and the sooner they have locked-in equity. They'll want this person to bring them deals. This person is known as a bird dog. It's a bit like being a wholesaler. Through work, research and investigation, this bird dog finds homeowners who need to sell and haven't been able to, or homeowners with mortgage difficulties, or foreclosures before they're listed.

That's bird dogging, and it requires no cash to get started, just some business cards and a lot of effort. However, it can make real estate investing a business for the average person with too much debt and not much cash.

They're out there looking for homes real estate agents aren't listing. In fact, some bird dogs have real estate agents feeding them leads when a distressed homeowner hasn't been able to sell. The bird dog delivers profitable investments to the investor.

Randy Bailiff
Real Estate Investment and Life Coach