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The Basics of Bird-Dogging

By: Kris Koonar

Bird-dogging, more commonly referred to as flipping, is the practice of buying run down real estate properties, below the real value and making improvements and renovations to resell at a higher rate to earn profit.

Wholesaling, which is also a type of flip, is the practice of reselling the asset to other investors at a low price, without making any repairs. The second investor then re-sells the property at the market value, after renovating it.

The person who takes advantage of a good real estate opportunity and invests in it, with the intention of repairing it and reselling it to make profit, is called a bird-dog.

The basic rule of bird-dogging is that the flipper must be able to recover the original and incurred costs of the property, to sell it at a higher rate. A bird-dog usually takes advantage of cases, where a person may be forced to sell the property at a low cost due to reasons like inability to make repairs or pay the mortgage.

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Over the years, significant changes have taken place in the real estate market. A bird-dog, who knows the tricks of the trade, will deal and invest in only those properties which will yield a decent profit, after paying the assignment fee and recurring costs.

Very often, the person who has undertaken the repairs of the house may hand over the task to someone else, which may not be able to serve the purpose. Consequently, the profit is drained from the deal.

If you want to be successful at the business of bird-dogging, you have to invest like in any other business. To identify a good real estate opportunity and benefit from a good deal, you need to be good at speculating market conditions and estimating the costs and profit of the real estate property. You need to evaluate deals accurately. Make sure that you handover the repairs only to a genuine and experienced contractor, as this will help in reducing the risk of another flip and a waste of your time.

Using a TREC contract is always beneficial, as the person responsible for repairing and renovating the property may need to borrow from a bank. A bank usually needs to see a legal real estate contract for verification purposes. You need to know how to bag a good bargain. You need to stay in constant touch with services and people that provide you with up-to-date knowledge of the current state of affairs of the business. Compare the prices with other real estate properties in the neighborhood that have been sold and accordingly negotiate and quote your price. Ensure that the deal is genuine and will yield a considerable share of profit to everyone involved. Invest only in those deals that will be worth the effort.

For those who do not have the capital to start a new business or rent for a place to operate a business, dealing in real estates is the perfect choice. Bird-dogging is an easy way of making money in the real estate market, with minimum risks involved.

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