A friend of mine was at a local REIA meeting a couple of weeks ago and the speaker talked about how he used “Ants” meaning bird dogs to find properties for him. I guess he liked the word “ants” because he wanted to feel superior to the “worker drones” who were willing to go out and find him deals that would make him rich. (RICHER THAN HIS WILDEST DREAMS!) So… you know that I am already pissed off.
To add insult to stupidity, he had his “ant” in the room while he talked about using ants to find deals. He introduced him, as a matter of fact. He discussed his payment arrangement with the bird dog.
How to get paid as a bird dog is one of those questions that always comes up because in some states, an unlicensed person cannot accept a fee for locating properties. In fact, in Florida, where this meeting was being held and where this man invested in properties, bird dog fees are illegal. Last time I checked (and it could have changed), it was legal to offer and pay a bird dog fee in Florida; it was illegal for someone to actually ACCEPT payment. You gotta love the way they write laws down here.
Now in the grand scheme of illegal activities, accepting a $500 or $1,000 fee for finding a property would not make one the next Al Capone. Or Goldman Sachs for that matter.
However, sitting in that meeting room were more than a few real estate agents.
I don’t know how things are in your neck of the woods, but most of the agents who are still in business (down more than 30% and probably closer to 50% since the bust) are fighting for every scrap they can get. And they sure as hell don’t like it when some bird dog is getting fees for locating properties. I can guarantee what will happen next because I have seen it happen before: one or more of the real estate agents will turn the investor and the bird dog in for selling real estate without a license or whatever the actual offense is. The bird dog (probably not the investor) is going to get hounded and will have to pay a very hefty fine that will in no way be commensurate with the pittance the investor was paying him.
Stupid! Stupid! Stupid!
There are legal ways around this. You can pay your bird dog (or get paid) as a marketer or lead generator. The bird dog can take an equity interest in the deal and either keep a piece of the action or assign their contract which at that point makes them a wholesaler.
The most important thing is to find out what the laws are in your state and then DON’T BREAK THEM. And if you are stupid enough to break them, don’t stand up in a public forum (and this includes social media sites, thank you) and talk about your illegal activities.
We say it over and over again in our manuals and seminars. There is NO SENSE in doing a deal illegally. If you are found out, you will lose the deal and probably more. Our esteemed politicians cannot pass a law without dozens of loopholes meant to benefit them and their friends. Learn the laws. Learn the loopholes. Consult knowledgeable and competent attorneys. And keep it legal out there.