Using Bird Dogs

The literal meaning of a bird dog is a hunting dog used to find and/or retrieve birds while hunting. In the real estate business, a bird dog is someone who finds prospective properties that otherwise would not be found. These people get paid to bring leads to the person that they work for. They usually will put that property in contract to be passed off to someone who intends to repair and resell the property and make a profit.

Payment for bird dog services is something that is worked out between you and the bird dog and there is no standard pricing industry wide. It can be as little or as much as you agree to. You have to really be tight on your bird dogs, though. It is not uncommon for them to hand you junk leads, homes that appear to be vacant and aren’t.

Some have opted to go by the plan that the bird dog only gets paid if you purchase the property and not just paying them for the lead. In the past when people have chosen this plan, the leads tend to dry up because they are not really being motivated to bring the leads. When they are paid per lead, that is real money to them and they tend to work a little harder.

But then you may run into the bird dog that continuously brings you junk leads. In this case, set a criterion for him. They have to be vacant properties, they don't have to be grown up, they don't have to be ugly, but they have to be vacant and there cannot be any realtor sign in the yard. Setting these expectations makes things more difficult, but at least you will get better leads.

Then you have the Fiz-bows (these are for-sale-by-owners, also known as FSBO’s) that some bird dogs will target. Be sure they are not looking these houses up at a fiz-bow website of some type, driving by the property and snapping a picture and then expecting you to write a check. Give your bird dog explicit feedback on each lead… reasons as to why you’re not interested. Pretty soon he's not going to include the bad leads anymore because it's not worth his time.

And then there is the other side… if you’ve just made fifty thousand dollars on a sale that a particular bird dog lead you to, then you may want to give him one or two thousand dollars. This is done after you’re holding all the money. Because in reality, if he's uncovered one he may have just stumbled on it. But he or she may also understand something that the rest of the bird dogs don't understand so you want to keep him motivated.

For additional information on real estate investing and the hot foreclosure market, I recommend joining Ron LeGrand's Millionaire Maker Newsletter The newsletter itself is loaded with great tips and resources, and he's usually giving away something free like a CD or something that generally has a lot of great information on it.