Wholesale real estate investing starts with finding motivated seller leads. One of the ways they get leads is by working with Birddogs. A birddog is someone that points out properties that might be owned by a motivated seller, as a birddog points out birds to a hunter. So here’s what you do…
One of the easiest things is to open your eyes as you drive around where you normally would during your day. Look at every house as if you’ve never seen it before. See if you can spot signs of disrepair or neglect.
- Yard: grass not trimmed or leaves not raked, or cut in front and waist high in back
- Roof: composite shingles frayed or missing
- Wood trim: faded and needing repainting
- Fencing: missing wooden pickets or metal mesh pulled down
Now that you’ve spotted one, write down the address.
Next, you talk to wholesalers. Where do you find them? There are message boards online that you can use to find one in your town. The best place is to look at your local investment club. Most clubs have a table for marketing material. Look for flyers for properties for (whole)sale. Pick all of those up. The next business day, call them and see if they are interested in property leads. Most will say YES.
The arrangement you make with the investor varies as much as you can imagine. Some of the ones you might expect:
- $1 per house. You need a whiteboard and camera. Write the address on the board, hold it up to the house and take a picture to get both in the frame
- Split of the wholesale fee. Usually around $500 if a lead closes. For example, you give a lead to an investor (wholesaler/rehabber/landlord) and they were able to successfully negotiate a contract that closed, you get $500.
- Training. You don’t get any money, but the investor agrees to let you sit on his/her shoulder during the transaction. You learn how to do this yourself. Not bad, because trainers usually charge between $125-400 per hour.
At some point, you’ll run out of houses where you normally go. Then you ask investors where they like to buy (what part of town/kind of property), and drive those neighborhoods.
