If you have spent any amount of time working in real estate or real estate investing the term “bird dog” or “bird dogging” may have crossed your path. And while they may seem silly, they describe an important function in any real estate investment business.

The term bird dog was borrowed from hunting dogs who locate birds while hunting and retrieve them once they have been shot. Believe it or not, bird dogs in real estate serve a very similar function – minus the guns, birds and dogs, of course. If you’ve got a good eye for potential properties you could be an excellent bird dog.

So what is a bird dog in real estate and more importantly how can they help an investor make more money?

What Is A Bird Dog In Real Estate?

NOT this kind of bird dog!

In real estate a bird dog is someone who is paid to look for potential deals and bring them back to an investor. Bird dogs use their expertise and connections to look for distressed properties either online or in person to identify potential deals for investors. Once they have found a promising property they present it to an investor and will earn a referral fee if the property is purchased.

A good bird dog is someone that has deep knowledge of a neighborhood, many connections and has a good sense of what investors are looking for. A bird dog doesn’t necessarily need to be someone who exclusively does this for a living, they could be someone who works in the area frequently like a builder or delivery driver.

Great bird dogs have a deep knowledge of both a specific area as well as real estate in general. If you want them to bring you promising properties they have to know what a promising property looks like.

How Are They Paid?

Bird dogs can make money in two different ways. The first is they look for properties on their own and are paid a referral fee for any property that ends up being purchased. The fees associated with this are usually determined by the bird dog and can be anywhere from a few hundred dollars to a percentage of the sold price. The amount of money is usually determined by the experience level of the bird dog.

Another way bird dogs are hired and paid is by the hour. A real estate investment business may hire a bird dog on a per-hour basis to go out and look for homes worthy of investment. Many investors do this because driving for dollars themselves is too time consuming but they still want to have someone on the ground looking for physical properties in a neighborhood. In this instance the bird dog would work as a contractor for the investment business and only work within those set hours. If they find a property they would not receive a referral fee because they are paid by the hour.

Pros To Using A Bird Dog

Using a bird dog can be advantageous for your business and become an important deal finding channel.

  • More Eyes Out There: Having more people out there looking for properties you may be interested in is always a good thing. If you find the right bird dog and they have the experience they may be able to spot true gems better than any of your other lead generation tactics.
  • Pretty Low Cost: Using a bird dog can be pretty cost effective in comparison to some of your other lead generation methods. Depending on who you are working with, paying a referral fee or an hourly rate may both be financially prudent options when looking for new leads.
  • Time Saving: One of the many reasons investors use bird dogs is to save themself time. Bird dogs are great to hire to drive for dollars because you don’t have to spend hours of your day driving around looking at properties but you can still get the benefits of the practice.
  • Great Way To Find Off Market Properties: One of the reasons to hire a bird dog is to have someone on the hunt for off market properties. Off market properties are desirable because they will come with less competition and may be sold for less than a property with many interested parties. A bird dogs knowledge of a neighborhood and real estate makes them the perfect asset to have onboard if you are specifically looking for off market opportunities.

Cons To Using A Bird Dog

Like everything there are also some down sides to using a bird dog. The cons very much depend on where you are located and the needs of your business.

  • Few Deals: Hiring a bird dog to drive for dollars may not bring you any good leads. Depending on your area there may simply not be a ton of leads out there or you are working with an inexperienced bird dog. To make this practice worth your money make sure the neighborhoods you are working in have potential and your bird dogs know what they are looking for.
  • Inexperienced: If you use a bird dog make sure that they have the experience or credentials to make them worth your time. You don’t want to spend time and money working with someone who does not know what they are looking for. This can be hard to determine because bird dogging is usually a freelance or contractor position.
  • May Be Illegal: Before you start any bird dogging efforts you need to take a look at your local laws. The reason bird dogging could be illegal is that it can easily step into realtor or broker territory. You want to make sure that your bird dogs do not get too involved in any transaction – they must simply point out a potential lead and step back. Before you accept any leads or hire a bird dog to drive for dollars take a look at your local laws to make sure you know the restrictions and can ensure the bird dog does not step over the line.

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Is Bird Dogging Like Wholesaling?

While they may sound similar, bird dogging and wholesaling are two completely different practices. Both utilize experts to seek out distressed properties that may be suitable for investment but what happens next is where the difference lies. A bird dog would simply notify an investor and step away.

A real estate wholesaler on the other hand would make contact with the homeowner and work out a contract for the home. The wholesaler would then shop that contact out to investors to take ownership of the property. A wholesaler is much more involved in the actual real estate process and makes direct contact with the seller, estimates the cost of repairs and helps determine what pricing would be attractive and beneficial to all parties.

Final Thoughts

If you are a real estate investor looking for new leads then getting in touch with a bird dog will likely be beneficial for your business. Whether you hire them by the hour or let them know what you are looking for, bird dogs can take a lot of time consuming practices off of your plate and allow you to hunt for deals in other ways. If you have always wanted to utilize driving for dollars more but don’t have the time, hiring a bird dog may be your best solution to still reap the benefits.