Birddogging for a Commission - Posted by John (KS)

Posted by Brad Crouch on December 12, 1998 at 16:18:22:


I think Ron Legrand’s method of paying people who supply leads and photographs about $10 for each lead is a good idea. This would be an instance where other people are finding the leads and bringing them to you. Some folks pay these people only if they close on the deal, so they must wait for the closing to get their money . . . although they will undoubtedly get more than $10.

My point is that when you are the one finding the deals, why should you be content with $10 for a lead or even $1,000 after waiting for closing? As real estate investors (not bird dogs), we’re supposed to be smarter than that. We know how to negotiate the best deal possible and get the property under contract. Then those contracts can be assigned . . . with more profit than if we had let someone else decide how much we were to get, as a “bird dog”.

About the “bookkeeping” question: I’m not a lawyer, accountant or tax advisor so all I can tell you is how I see it.

The amount is $600 per year. If you pay more than that to any one person or company, not a corporation, you’re supposed to send them a 1099. Of course that’s when you want to deduct those amounts from your own taxes. There are payments that are “provable” (cancelled checks, etc.) and payments that are not “provable” (cash or bartering services). Whether or not you are “required” to send out 1099 forms when $600 or more has been paid during a calender year, I’m not really sure.

I wouldn’t worry about 1099’s or “monitoring” small amounts of cash paid to lead generating people. This would probably get you the reputation of being a “penny pincher” and you don’t really need that.

By deducting these small amounts of cash as a cost of doing business, doesn’t seem to me to be worth the actual amount of money saved.

I’m talking about the $10 per lead cases, not the $1,000 or so you might pay if that is your method. For those kinds of amounts, I would suggest talking with your tax accountant.



Birddogging for a Commission - Posted by John (KS)

Posted by John (KS) on December 11, 1998 at 15:41:13:

I talked to the only “I Buy Houses” guy I have found so far, yesterday. He was thinking of looking for an assistant when I called. We are planning on having dinner mid next week to discuss things further, but this is what I got so far.

As far as he knows, he is the only person in the area, placing “I buy houses” ads. He is planning on moving to Kansas City in the very near future, because of bigger, better RE oportunities. He says that he wants to do more deals worth alot more money. He wants to leave someone here to keep looking for and working deals. Maybe me. He mentioned that he was palnning to pay for advertising, closing costs, etc. and would pay me a commission on every deal I found that we closed on. I haven’t yet identified if he is L/O, renting, flipping or what.

What would be a fair commission percentage I should expect to receive for this kind of work? I don’t want to accept something that sounds good to a newbie, but really isn’t fair.

PS- If “commission” is not the correct word to use here, please correct me, but I don’t mean to start THAT thread again.

Re: Birddogging for PROFIT - Posted by Jackie in Dallas

Posted by Jackie in Dallas on December 11, 1998 at 22:05:02:

John, why would you want to settle for just a “commission” when you can have the WHOLE enchilada?

Your putting yourself in a position of letting this guy be in control of your profit - and what you do and when you do it — gosh, that kinda sounds like a JOB with a BOSS. Is that really what you want?

Heck, if he is the only one running the ads for “We Buy Houses” I think it is definitely time he has some competition - YOU! Run your own darn ad - it’s cheap.

Get the people calling you - you write the contract on the house (with the escape clause I told you about)

THEN call this guy up and TELL him (don’t ask) what you want for the house. No negotiating allowed! If you give in once, he’ll expect it every time. He never needs to know what you paid for the house - this way YOU control your profit.

Just my 2 cents ---- You need to learn to think like an entrepreneur - not an employee.


Re: Birddogging for a Commission - Posted by Alex

Posted by Alex on December 11, 1998 at 18:49:39:

In regards to your posting, I’m also an ALL CASH buyer but, I live in a large metropolitan city. I thought I might give you alittle insight on Bird Dogs because I’m not sure if the Investor explained what he’ll need from you. I have no idea if you are a RE Broker or a new Investor or neither so here it goes: Real Estate brokers\agents network with many people who go out looking for undervalued properties for them. These people are what we call “Bird Dogs”. Bird Dogs go out and sniff out & point towards what might be a good deal. I offer fees from $250-1000.00 but, I live where there are MANY MANY MANY people & houses. :slight_smile: My fees are not just for Bird Dogs, but mainly RE brokers who go the extra mile & at times my handsome fees are very rewarding. ONLY if I close = meaning, I purchase a property that someone has found for me. My fees are high because there are many of Investors circling the areas. Now a Bird Dog can be anyone. A neighbor, a Fedex driver, a telephone man, etc. So, basically everyone can participate. Bird Dogs bring the RE investor the names elephone no’s\addresses of vacant or boarded up houses
otices of estate sales\anyone who is getting divorced\anyone who needs to sell their property quickly even for a reduced price!! It’s great having Bird Dogs because they do all the legwork. As far as what should you get paid, that I don’t know. Ask him what he wants to pay you & start from there. Also, I really don’t think he’s the only RE Investor in your area or state. There are many, many, many RE Investors all over. It’s also important to ask the Investor which properties he is looking for because some are harder to find then others, etc. I hope I gave you a better explanation of Bird Dogging… Happy House Hunting!

Thanks - Posted by John(KS)

Posted by John(KS) on December 14, 1998 at 09:58:50:

Thanks guys for the info. I guess Birddogging was the wrong term. I do want to find the deal, and sign the contract, then assign the contract to him. I am glad I brought this up and you brought this to my attention or I may have ended up agreeing to something that I thought was in my best interest, when there was a better opportunity staring me in the face.

Thanks again Jackie for helping me out. I have seen some people talking about a book or course that you are working on. Are you still working on it? What all will it cover and when will it be available?

Re: Birddogging for PROFIT - Posted by DJ

Posted by DJ on December 12, 1998 at 09:35:21:

Please explain the “Escape” Clause?

Re: Birddogging for PROFIT - Posted by johnman

Posted by johnman on December 11, 1998 at 22:20:57:

That was good! I will remember that! You’re firm and in control.
I just placed my ad this thursday. Wish me luck!


Re: Birddogging/Commission/Payment - Posted by MilNC

Posted by MilNC on December 11, 1998 at 20:10:23:

I would love it if you or someone could address the payment issue–I don’t mean how much to pay. Suppose you are starting out small,
a single person, no family, kids to work for you. You have the occasional birddog or lots of them. How is this handled as to paying the person. I’m sure a lot of people would be happy to do this for cash. What if you are not incorporated yet?

There is a certain amount that triggers a 1099, right?
I am clueless and have no friends in business that I can get right answers from.

I’m not talking about hiding anything, just not having
to deal with a lot of bookkeeping. I am a complete
novice as to business, especially hiring anyone.
My preference would be to start on my own…I can’t handle employees and regulations and all that paperwork
on top. Really, can someone clear this up? (Please be gentle).

Re: Birddogging for PROFIT - Posted by Jackie in Dallas

Posted by Jackie in Dallas on December 13, 1998 at 24:28:51:

The “escape” clause is your way OUT of the contract if you cannot find anyone to flip to.

The one I use most frequently is, “This contract is subject to inspection and approval of the property by buyer’s partner(s).”

Re: Birddogging for PROFIT - Posted by Jackie in Dallas

Posted by Jackie in Dallas on December 13, 1998 at 24:26:01:

That’s the attitude to have John – go for it!!

Re: Birddogging/Commission/Payment - Posted by Brad Crouch

Posted by Brad Crouch on December 11, 1998 at 21:53:49:

Mil & Alex,

Instead of letting someone else decide how much you will be paid, and waiting for a closing to receive your money . . . why not just get the property under contract (with an escape clause) and get a preliminary title report, and assign the property to another investor?

If you knew the guidelines that these other investors used for acquiring these properties, and their “minimum acceptable profit levels”, why couldn’t you decide how much you get paid? And immediately?

If you knew how much an investor needed for the deal to be attractive to him, and you knew how much you wanted as profit, couldn’t you just negotiate a deal with enough room for the both of you?


Re: Birddogging for PROFIT - Posted by ChrisG

Posted by ChrisG on December 13, 1998 at 11:05:42:


That clause sounds good but what do you tell the seller when they ask who your partner is? I’m assuming that your “partner” is the person you will be flipping to. If so what do you tell them if you have not yet found some one to flip or assign the contract to.

Also what do you do for disclosure? Do you let the seller know that you are going to flip or assign their contract?



Re: Birddogging-not what I meant - Posted by MilNC

Posted by MilNC on December 12, 1998 at 07:51:10:

As I understand it, as Ron LeGrand recommends,
pay people for leads. Pay when they
bring you a photo and your form filled out on the property.
They don’t wait for the closing to be paid. They have nothing to do with whether it closes or not.

My question was as to bookkeeping. I guess they are
considered self employed and under a certain amount of
money to any olne person there is no 1099.