Is there a contract out there between bird-dog and investor?

Lori
You would do so much better financially by wholesaling instead of birddogging.
You be the wholesaler and tell the investors that you have XXXX house under contract (lock the house up between you and the owner) and if the want it they need to give you your assignment fee. Don't let them take control of your deal and your money. Just kindly let them know how YOU do business.
You are a wholesaler which is your self owned business. You decide how much you want on each deal.

Work with FSBO's and forget going through the realtors for now. All they understand is conventional financing...bank loans...and doing things the "realtor" way. Investors/wholesalers work totally different. IF you can find an investor friendly realtor you are in luck!

P.S if you really want a letter stating you have funds to purchase...go to www.coastal-funds.com
You can get an instant letter sent to you in the amount you need.

Sissy. That is great info. Thanks for your awsome posts and time.
With you and Rina and others posting great advice and solutions,how can we go wrong!!
Thanks .
Richie.

ya, sistreat is right, as I read a lot of these blogs, I see that many people are confused btw the difference of a bird-dog and a wholesaler.

Bird-doggers are like scouts. They go out to find their team the best potential and try to get them to come out and check their team out. The owner/manager/whoever does the contracts will sign them the deal. So as a bird dog, the only you do is find a deal according to what an investor is looking for, do a little research and analysis, and then present them the material. There is no locking up the contract in your part, no negotiating on your part, and no contract signing on your part. All you are is an information scout. With that info that you gathered you present it to an investor, and they do the rest of the work. If the deal closes, then HE will pay you for your time. So as you can see, you have no control over what you make.

vs

Wholesaler are the investors themselves. They are self-employed and run their own shop. So it is important that when you talk to these people about what they are looking for, that they understand that you ARE AN INVESTOR that wholesales properties, and the purpose of finding out their criteria is to move property quickly by defining your target market. They need to know that YOU lock deals up in your name, and are willing t sign the rights to purchase the property over to them, but in order to make it a good deal, you need some info from them so that you both won't be wasitng each others time. You will be doing all the research and analysis, negotiating, and locking the property in your name. Then when it is time to sell, and an investor is interested in the property, you will assign the property to them for how much YOU want to make from the deal. See how you have the control? From there, you are the one dealing with the contracts.

So sistreat is right, you make more as a wholesaler, not as a bird-dogger. But it is imparative that you understand the difference. Set the record straight with the people you have come into contact with.

I totally understand the difference between BD and Wholesaling....thank's...you spell out so well....so...as a bird-dog there is no way to have an agreement with the end/buyer investor before you do the work. How do I know that they won't just take the info and deal with the seller on their own?

I have been told by my advisors that I should start out bird-dogging cause of my financial status. They are the ones that said I should have some agreement in writing before doing all the work.

Lori

You and other in the DG family have given me countless resources to help newbies like me.

Can't thank you enough.

Can't explain any better than that.. Good job Kbarnes!

hey lori, well obviously you don't want to get worked out of the deal, so before going out into the market to find your bird-dogging deals, I would talk to my investors and tell them to write up a prelimenary side contract to me, with their signature, stating that if a deal is closed, they will pay me an independent contractor fee for research and analysis. That way, for legal reasons, i wont get cut out of the deal, and second the IRS will known that I were "employeed" (not really) to provide a service of research and analysis. I would have my lawyers look at it, and if everything is kosher, sign it and send it back to them, making sure to keep a copy of it for your records. Then go to work.

You should also try creating a relationship with these people since you will be working with them for awhile, and it would only make sense to qualify the people you are working with. If you get a shady feeling from them, don't do business with them. If they aren't tranparent or friendly, don't do business with them. Those are other ways to protect yourself from being taken advantage of. So hope that helps. (btw that written contract is just a suggestion, not advice, but you do need to talk to an attorney about that matter, they can give you more options).

hope that helps!

kris

Lorict,

I have had the same question as far as what type of contract to use when bird dogging (since it is very different than wholesaling when YOU have the control).

Bird dogging gives the investor the control. So I found a confidentiality agmt in the threads that I use and have modified it to make sure ( at least I hope so) it keeps the investor from "stealing" the property behind my back. I make them sign this BEFORE I disclose the exact address of the property so they won't go see it on their own w/o me knowing about it. Like I said, I am not sure how legal binding this is (would hope it is if someone did go behind by back).........I guess I will learn. Also, I read that I can file this contract with the records dept in your area so no one can buy the propery unless you are notified first (have to find that thread again)

Like to hear your guy's thoughts (I added items 5 and 6)
-----------------------------------------------------------------------------
Confidentiality Agreement

It is understood and agreed to that the below identified discloser of confidential information may provide certain information that is and must be kept confidential. To ensure the protection of such information, and to preserve any confidentiality necessary under patent and/or trade secret laws, it is agreed that

1. The Confidential Information to be disclosed can be described as and includes:
Property description(s), technical and business information relating to proprietary addresses, contact information, real estate information, ideas, drawings and/or illustrations, costs, profit and margin information, finances and financial projections, customers, clients, marketing, and current or future business plans and any other information relating to property leads supplied, regardless of whether such information is designated as “Confidential Information” at the time of its disclosure.

2. The Recipient agrees not to disclose the confidential information obtained from the discloser to anyone unless required to do so by law.

3. This Agreement states the entire agreement between the parties concerning the disclosure of Confidential Information. Any addition or modification to this Agreement must be made in writing and signed by the parties.

4. If any of the provisions of this Agreement are found to be unenforceable, the remainder shall be enforced as fully as possible and the unenforceable provision(s) shall be deemed modified to the limited extent required to permit enforcement of the Agreement as a whole.

5. The Recipient acknowledges and agrees that if he/she decides to pursue purchase of property to be provided, that Recipient cannot close on said property without paying fee disclosed in item 6.stated below.

6. Whereby the Recipient agrees to pay Discloser a fee of 4% of Purchase Price of property, contingent on property closing. After said agreement is signed, Discloser will provide Recipient with address of said property.

WHEREFORE, the parties acknowledge that they have read and understand this Agreement and voluntarily accept the duties and obligations set forth herein.

Recipient of Confidential Information:
Name (Print or Type):
Signature:
Date:

Discloser of Confidential Information:
Name (Print of Type):
Signature:
Date:

Neil

Have you gotten an investor to sign this? Just curious...

Dawn

I like the wording of your contract. I think you might need to put a dollar amount instead of a percentage, though, so it is very clear you are not acting as a real estate agent..

The investor I bird-dogged for this summer drew up a contract that we signed. It has served it's purpose. But I have been thinking a lot about such contracts, especially if I am USING a bird-dog. I think there should be a separate contract for each property a bird-dog finds for an investor, signed at the moment of presenting their "find". That way there is no question which props were actually brought by which bird-dogs. It protects both the investor and the bird-dog from any accusations. And if a second bird-dog comes with the same property, or if an investor actually saw the propr prior to someone else bringing it to his attention, there is a way to show that.

Any thoughts?

Rina

I was thinking the same thing, a separate contract for each, less confusion. Should the amount of the purchase price be considered as well? If the investor stands to make a killing on the property you may have room for a larger fee.(I'm not being greedy or anything) Or am I wrong in thinking this? I would hope he may feel a little more generous if this were the case.

Rina, can you share a copy of your contract so we have something to go by?
Maybe we can use it to "create" our own....edited of course!

Did you sign a confidentiality agreement with him as well?
I'm just full of questions today!

Dawn

I'll check to see it's ok with him (It was drawn up for our specific relationship), but I'm sure I can post something really close to what we used, if not the exact contract. I do have to say, though, that a lot of the aspects of our dealings were based on mutual trust. Of course, that's the key to any successful relationship.

Rina

I sent you an email with a copy of a confidentiality contract for him to sign.
(not a PM) I'd like your opinion, please?

I feel like I have a good relationship already, we've talked a few times. He doesn't seem the type to go around but... Hard to know who you can trust & I just want to cover my...

Is it snowing up there? We're getting freezing rain then snow later. It's like thundering and really windy!! Looks like Dean will be working late AGAIN!

Luv ya,

Dawn

I plan on work with assignments of contracts when and if possible. However, i am seeing situations, where maybe asking for a finders fee (bird dogging) might be a safer route for me to go, depending on the investors' needs. So, when i bird dog do i do the following:
Typically i would try to work with FSBO listings? (or do you suggest others).
Call the seller to discuss their property and attempt to assess their motivation
Then i make an appointment of see the place to determine repairs, etc.
Then i run some comps to determine if the asking price is too high and what the FMV is on it
Is that what i do? I'm a missing or adding a step? Let me know just how much and in what order you Bird-Dogging pros do.
Also, I too would really appreciate viewing a sample contract between me and Mr. Investor. Please SOMEONE SHARE!!!
Thanks to all.

Mati

Yesterday while dealing with an experienced seller (He knew I was wet behind the ears...) He didn't want me to lock up his property with the contract provided on this website. I told him my reason for the contract was to protect myself from getting ripped off by the buyer. He then told me to create a Non-Circumvent Agreement with the buyer so she can't go behind my back and purchase the property after I submit information, for example the address so she can pay for the inspection. Then he said he would pay me a 4% fee if the house sold for his asking price (She backed out today...) Here's the google link for a Non-Circumvent Agreement. I hope this helps because I'm in the same boat.

I am REALLY new to the real estate arena and business ownership, too, for that matter and I was wondering how to apply (fully utilize) the link (www.coastal-funds.com) you placed in this post. I looked at the information provided at www.coastal-funds.com and quite frankly it looks like Japanese or another foreign language to me. Please be kind enough to explain how/why/when I may need this information?

Thanks,
Demisha

Hi Rita, this is Ivory, a new comer. I too have an investor who is willing to pay me a finder's fee. Can I have a copy of the contact you used to protect your deal? My e-mail is: idavisel@****. I just became a member over the weekend and found an investor group and a property. I am trying to close the deal. Thanks. Ivory

I'd truely apprieciate a copy as well, if permitted. Thank you so much in advance and may the lord continue to Bless you and yours.

MsCharlie

Here's one you could tweak, Richie. I think I would go with a set fee rather than a percentage.
http://www.biggerpockets.com/forms/bird-dog-agreement.pdf

google bird-dog for more.

Rina

I hope this helps you.
Richie.