Site Navigation

Investor Information
Home
Monthly Update
Real Estate Articles
Real Estate Videos
Real Estate Success Stories
Real Estate Blog
Free Investing Books, Audios
Real Estate Books
Investing Glossary
Investing Abbreviations

Real Estate Products
No Risk Guarantee
Best Sellers
All Investing Products
Real Estate Courses
Real Estate Audios
Real Estate Ebooks
Real Estate Books
Real Estate Seminars
Special Offers

Investor Resources
Hard Money Lenders
Real Estate Agents
Handyman Services
Property Managers
Real Estate Clubs
Cashflow 101 Clubs
Business Tools
Tax Appraisal Districts
State Foreclosure Laws
State Property Codes
Proof of Funds Letter

Discussion Forums
Networking Forum
Beginners, Carlton Sheets
Bird Dogs, Wholesaling
Foreclosures, Short Sales
Sub2, Lease Options
Rehabbing, Landlording
Financing, Hard Money
Asset Protection, Legal
Commercial, Mobile Homes
Real Estate Marketing
Random Ramblings

Site Information
About Us
Advertise on REIClub
Contact REIClub
Link to REIClub
REIClub Facebook
REIClub Twitter
REIClub YouTube
REIClub ITunes
REIClub Testimonials
Press Releases


Flip Houses Using Our $
Training,Bus&POF Included!
Click Here Now!

--------------------------
Great Cash Flow
With Less Risk
Click Here Now!


Welcome, Guest. Please login or register.
Did you miss your activation email?
October 23, 2014, 12:50:14 PM

Home Help Search Calendar Login Register
Free Monthly Update
Name:
Email:
Click Here to Register for the Discussion Forums
Real Estate Investing Forums | Real Estate Investing | Bird Dogs, Wholesaling, Flipping Properties Forum (Moderators: $Cash$, Bluemoon06, kdhastedt, Mdhaas, motivatedceo) | Topic: What's a fair bird dog fee? « previous next »
Pages: [1] 2
Print
Author Topic: What's a fair bird dog fee?  (Read 10304 times)
Steve in San Fran
Member
*
Offline Offline

Posts: 7


« on: April 28, 2003, 02:13:56 PM »

I recently answered a 'lease option needed' ad for a nice property I own in Frisco and want to get leased.  The reply was from a bird dog who was representing the potential tenant/buyer.  This guy wanted what I considered a ridiculous fee based on my admittedly minimal experience with bird dogs.  

I searched the archives here and on another board and could not find any general rule of thumb for fees other than they should vary in relation to the profit in the deal.  Does anybody have any market-proven guidelines that creates a win-win for investor and bird dog?

Here's the numbers on this deal for reference (L/O terms reportedly were OK with tenant/buyer):

One year lease/option for a brand new 4/2/2 with many upgrades.  Rent of $1500/mo. with a $200/mo credit toward purchase price of $170k.  Option consideration of $5k down plus 1 month security deposit.  Buyer thus has over 5% equity after 1 year from combo of $5k down, $2.4k rent credits, and $1.7k security deposit--should be enough to get him financed as credit problem was due to one time event beyond his direct control & he makes a good salary.

The bird dog wanted half of the option consideration plus half of whatever additional down payment the buyer made at closing after one year.   That's a minimum of $2500 upfront and $2050 a year later if/when tenant exercises the option.  Assuming the buyer saved another ~5% cash to reach 90% LTV, the bird dog wanted half of that as well--another $4250.  His total fee thus is about $8,800.   I politely told him he was about 10X what I thought was fair and we broke off discussions.

Any thoughts appreciated.  Thanks!

Steve in San Fran
Report to moderator   Logged
Admin
Administrator
Member
*****
Offline Offline

Posts: 988



« Reply #1 on: April 28, 2003, 02:34:29 PM »

Steve,
Yes, I agree with you this person is high.  However, it depends on your market and your situation.  I paid someone half the upfront of a 4k option fee in early March for bringing me some TBers.  It was worth it at the time to me and might be again as I tire of the carrying costs.  Prior to that I had never paid more than $500.

I've also filled props with buyers through licensed agents on several occasions.  I pay the agent a 70% leasing fee initially and offer them the remainder of a sales commission on the backend if the TBer exercises.

An investor friend of mine here in town and I will help each other out with sellers and buyers and our standard fee is $500 per.  I normally pay $500 for a closed transaction with a regular bird dog.

It's likely this bird dog may be bending some of the licensing rules in your area as they don't have your property under contract and thus, are not a principal.
So, as you probably surmised, there's no "right" answer and it's best generally to follow your gut.
Report to moderator   Logged

There's Only Two Things in Life: Reasons and Results.  Reasons don't count.  - Anonymous
hassansr
Member
****
Offline Offline

Posts: 628



WWW
« Reply #2 on: October 25, 2008, 09:39:46 PM »

I pay 5% of my profits on any deals that I wholesale, plus an additional 5% on any houses that my property locators help me sell. Meaning that if they bring me a qualified buyer that closes a deal with me, I give the property locators a referral fee. Doing this increases the number of voices that I have out there spreading the good word and finding buyers for me.

Report to moderator   Logged

Hassan Omar
Shortsales & Wholesaling
www.shortsalehud-1.com
fadi
Member
*****
Offline Offline

Posts: 1698



WWW
« Reply #3 on: October 26, 2008, 09:11:11 AM »

Quick question... what difference does it make what someone else makes if he finds you a very good deal and you will make good money?
Report to moderator   Logged

Location: San Antonio, TX
http://www.fadizeidan.com - All About Marketing Blog - A Must Read
hassansr
Member
****
Offline Offline

Posts: 628



WWW
« Reply #4 on: October 26, 2008, 09:52:31 AM »

you know how hard it is to to find a qualified buyer nowadays...


One less person I have to spend ad money on when trying to wholesale.
Report to moderator   Logged

Hassan Omar
Shortsales & Wholesaling
www.shortsalehud-1.com
sabir
Member
*
Offline Offline

Posts: 16



WWW
« Reply #5 on: October 26, 2008, 09:11:50 PM »

Wow alot of differences on how much someone would pay their bird dog. I would only pay $500 - 1,000 cash depending on the deal.
Report to moderator   Logged
hassansr
Member
****
Offline Offline

Posts: 628



WWW
« Reply #6 on: October 27, 2008, 07:00:02 AM »

typical profit on a wholesale deal is usually 10k; 5% of that = $500


Report to moderator   Logged

Hassan Omar
Shortsales & Wholesaling
www.shortsalehud-1.com
fadi
Member
*****
Offline Offline

Posts: 1698



WWW
« Reply #7 on: October 27, 2008, 12:15:57 PM »

Wow alot of differences on how much someone would pay their bird dog. I would only pay $500 - 1,000 cash depending on the deal.

Let me get this right... you would walk away from a $30k profit on a deal, because a birddog asks for $5,000?

makes sense
Report to moderator   Logged

Location: San Antonio, TX
http://www.fadizeidan.com - All About Marketing Blog - A Must Read
Mr Investor
Member
***
Offline Offline

Posts: 348


« Reply #8 on: October 27, 2008, 03:05:39 PM »

Wow I only charge $500 per successful close.
Report to moderator   Logged
Joeabbott2008
Member
*
Offline Offline

Posts: 13


« Reply #9 on: November 13, 2008, 03:16:46 PM »

If I sold my position in a contract and the figures were solid, I wouldnt mind walking away with a $5,000 profit.  If someone has a problem with what you make just do a double closing. That way neither person knows how much you are making.
Report to moderator   Logged
Lamar
Member
***
Offline Offline

Posts: 210



WWW
« Reply #10 on: November 13, 2008, 09:44:54 PM »


Let me get this right... you would walk away from a $30k profit on a deal, because a birddog asks for $5,000?

makes sense
[/quote]

Yeah Right! lol I'd probably close that deal in a second. But a birddog getting that much would have to do a little more than sending me the referral. I'd make him/her work for that $5K. It wouldn't be too much, but the time factor would be fair for both of us. A simple referral for $5K will not do in my book!

 Cool
Report to moderator   Logged

J.Lamar Ferren
The "New Breed" Investor
There's a "New Breed" way of investing in real estate and if you don't get on board, then you could get left in the dust!
Head over to my site to learn more---> http://www.JLamarFerren.com
fadi
Member
*****
Offline Offline

Posts: 1698



WWW
« Reply #11 on: November 16, 2008, 12:04:00 PM »

Lamar,

I don't like paying that much for referral either, I've paid $1k for referals for both buyers and sellers before. But like you said, if the deal is really good, I would close it.

For him/her to make that $5k they need to get me a killer deal but I would not rule it out just because I don't want to pay more than $500. Cost of lead is part of the purchase price.
Report to moderator   Logged

Location: San Antonio, TX
http://www.fadizeidan.com - All About Marketing Blog - A Must Read
chiconya
Member
*
Offline Offline

Posts: 5


WWW
« Reply #12 on: November 17, 2008, 07:01:07 PM »

Wow,

I didn't realize a bird dog could get so much. I haven't used one yet but I only plan to spend between 250.00 and 500.00. That's what I am advertising for now.
Report to moderator   Logged
MDwholesaler
Member
*
Offline Offline

Posts: 15


« Reply #13 on: November 17, 2008, 08:53:07 PM »


I look at at it as if that bird dog gets me a deal then they should be taken care of. If they consistently provide leads then I up their fee. I don't just mean sending me an address but them actually prequalifying the buyer to know that they are motivated. This takes most of the work and time out of the deal for me. I'm not going to be greedy and short change someone who could provide me with numerous deals going forward.
Report to moderator   Logged
fadi
Member
*****
Offline Offline

Posts: 1698



WWW
« Reply #14 on: November 17, 2008, 09:14:19 PM »

Wow,

I didn't realize a bird dog could get so much. I haven't used one yet but I only plan to spend between 250.00 and 500.00. That's what I am advertising for now.

I found a house! the seller thinks it is worth a $100k, and willing to sell it for $70k... It needs carpet and paint.. similar houses on the market selling for $140k! I will give you this lead, but I want more than $500!

will you pass?

Report to moderator   Logged

Location: San Antonio, TX
http://www.fadizeidan.com - All About Marketing Blog - A Must Read
Pages: [1] 2
Print 
Real Estate Investing Forums | Real Estate Investing | Bird Dogs, Wholesaling, Flipping Properties Forum (Moderators: $Cash$, Bluemoon06, kdhastedt, Mdhaas, motivatedceo) | Topic: What's a fair bird dog fee? « previous next »
Jump to:  



Login with username, password and session length

Powered by SMF 1.1.8 | SMF © 2006-2014, Simple Machines LLC

Anti-Spam Policy | Compensation Disclosure | DMCA Notice | Earnings Disclaimer | External Links Policy | Privacy Policy | Terms And Conditions | View Cart
2002-2014 All Rights Reserved. REIClub.com