What is a Bird Dog
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 with the intention of passing the deal on to a real estate investor in exchange for a percentage or fee. Bird dogs work as an intelligence network for real estate investors. Real estate investors may work with a network of bird dogs to increase the area over which they are looking for real estate deals. Similarly, a bird dog will also develop a network of real estate investors so they have a better chance of converting a particular lead into a deal. The term bird dog is more strongly associated with identifying properties for flipping, but it may also be used in the context of identifying income properties or residential rentals.
The term bird dog is a reference to hunting dogs that point to the location of birds and retrieve any birds the hunter successfully shoots.
BREAKING DOWN Bird Dog
Bird dogs are perhaps more plentiful and less successful than late-night infomercials and real estate seminars often suggest. The mythos around the bird dog is part of the quick money millionaire aura that ebbs and flows around real estate investment. You have no money to invest in real estate? You can learn the trade by seeking out great deals for well capitalized investors and building up your own stake through fees to finance your first deal. In theory, acting as a bird dog is a valuable opportunity to practice identifying distressed properties that can be remodeled or simply touched up for a significant profit. In reality, there aren't so many well capitalized real estate investors just waiting for the chance to train a bird dog. Successful bird dogs do exist, but they have likely spent years or decades in the real estate business and have a history of successful deals with a network of private investors. A new bird dog would find it challenging to match that history and experience.
That said, if you are interested in becoming a bird dog, it may be wise to find a kindly real estate investor or a seasoned bird dog to learn from. Just don't expect to build your own empire off the back of theirs.
Bird Dog Techniques
If you live in a city, you've probably had exposure to some bird dog marketing techniques without necessarily realizing it. The signs saying "We Buy Houses" with a mobile number are targeted to pull in sellers who need to get out of their property but don't have ties to the traditional real estate process. Similarly, some bird dogs use auto dialers and mailing circulars that suggest they can pay cash today for your home. Along with this grassroots lead generation, bird dogs may tap into public databases like the multiple listing service (MLS) and try to cross reference with other pertinent information, like layoffs at a nearby company (motivated sellers) or dropping home values in recent tax assessments (underwater mortgages). Essentially a bird dog needs to cast the widest net possible to generate enough sellable leads to pay for the effort and costs involved.