The term “bird-dog” refers to an individual who identifies lucrative real estate investment opportunities and directs investors to the deals for a fee. Bird-dogging is a great way for an individual to generate income via the real estate industry without actually investing money. Instead, bird-dogging requires time and an eye for a good deal. In short, bird-doggers are lead generators.
There are several methods of bird-dogging. Some individuals simply compile a list of addresses for their investors. Others, however, really do some legwork and supply their investors with addresses, images, repair estimates and market value data for each location. Obviously the more information the investor receives, the more likely a transaction will take place.
Bird-dogging can be used as a way to make income in the real estate market for individuals who don’t have the credit or money to buy and sell. Additionally, it is a good way to learn the ropes of investing before diving into the game.
The terms wholesaling and bird-dogging are often used simultaneously. They are, however, not the same. Wholesaling is similar to bird-dogging but requires more effort. Instead of pointing the investor to a real estate deal, the wholesaler tracks down and purchase the property with the intention of reselling to another investor. The key here is to leave enough potential value in the home so the rehabber can fix and flip the property for a profit.
Typically, a wholesaler has adequate deposit money in hand and the knowledge needed to gain a written contract on the property. From here, the wholesaler shops the real estate to other investors. The art of wholesaling does require a certain amount of know-how. Talented wholesalers can profit in the industry. Others use wholesaling as a stepping-stone into the investment market. Either way, when done correctly, there is money to be made in wholesaling.