If You Want To Wholesale Real Estate, Get Some Bird-Dogs Working For You!
Posted: Monday, October 05, 2009
by Dan Koch
Koch Properties
When you are a wholesale investor, you need great properties to pitch to your buyers. If you are a solo operation, here are some ways you may find great investment property:
You drive around town looking at "For Sale" signs and approaching the property's owners. If you live in a large city, this can be time consuming as well as cost you a lot of gas expenses. In small towns, many times the best deals aren't advertised because a lot of deals are discovered through "word of mouth."
Newspaper classifieds often have a lot of "by owner" properties for sale. These can be great opportunities for a wholesaler-particularly if the property has been on the market for a while. But that owner is probably getting a lot of calls from real estate agents and investors. If the property has been on the market for a few months and the owner hasn't allowed an investor or agent to help him or her that will likely be a tough sell that will take some effort.
Many people who want to sell their property will place ads in small publications because the advertising rates are so inexpensive. Are you reading all the smaller publications in your area?
Let's say you are doing all of these things and you are still having trouble finding great properties. Or you may be just starting out in wholesale investing. How can you get the edge in investing?
Bird Dogs
Many, but not all, wholesale investors hire a property locator, otherwise known as a Bird Dog. His or her job is to find properties, evaluate them and get the wholesale contract. A property located can be an equal partner in your business or commission-based employee or independent contractor. You can set the parameters for the working arrangement for the property locator.
If you decide to pay commissions, you have two options. You can pay a flat fee when the property locator finds the property and you have a contract to wholesale the property. The property locator will no longer be involved in the deal after you have the contract.
Another way is to give the property locator a percentage of the profits after you resell the property. This can work to your advantage and the property locator's advantage in several ways:
You are only paying money after the sale is made. You are out nothing until the property sells. Sometimes beginning wholesale investors have a difficult time coming up with cash up front to pay a flat fee to a property locator.
The property locator has the potential to make more money. For example, flat fees range from $100 to $1,000. But let's say you agree to give the property locator five percent of your profit. If you make $25,000, the property locator makes $1,250---probably more than he or she would have made with a flat fee.
A property locator frees your time so that you can concentrate on the reselling of the property. And unless the properties are being resold, no one is making any money.
The Benefits of a Property Locator
Most property locators do more than simply find great deals. They also help separate the great deals from the ones that are not likely to give you a great return on your investment. Before the deal comes to you the property locator would have evaluated the property based on these criteria:
The after repair value of the property. This important, especially if the property is in bad shape.
The cost of the repairs. The property locator may go as far to get estimates from area contractors.
What the wholesale price should be. This is usually an estimate, as well.
When looking for a property locator, consider the people you know first. If you are already investing in real estate, you may already know someone who would be interested in making some extra money. You can also place classified ads. Craigslist ads are free and are a great way to find new talent. Before you hire a property locator, just make sure the parameters are established (consider and "employment agreement") for commissions.
Expect Greatness & Nothing Less
Dan Koch along with his partner Ray Bartle run one of the Midwest's largest wholesale property operations. They also have a passion for teaching people how to succeed as real estate investors. If you want to receive all of the latest news, info, free articles and the very best wholesale deals from Dan & Ray visit BestBest Damn Wholesale Properties http://www.BestDamnWholesaleProperties.com
You will also get a Free E-Book on how to evaluate and buy wholesale properties without paying too much!!!
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