What is a Bird Dog?
Bird Dog is a terminology used for specialized agents or persons who make their earnings by searching for real estate properties suitable for investors. These properties may be distressed or underpriced or discounted but require cash to regain market value before it is being sold off at better prices.
The job of a bird dog is to locate real estate investment opportunities for investors who specialize in real estate private equity i.e. buyers who purchase real estate properties at underwhelming prices.
The concept of a bird dog is similar to investment representatives, pitch agents or scouts who look for properties that fit into the investment portfolio requirements for real estate investors. The properties are then restructured, repaired or remodeled, after which the property would again be sold off by the investor for larger profits.
Bird Dogs do not themselves invest in the properties. Their work is simply to identify investment opportunities and generate leads. If the opportunities lead to a deal, the bird dog will be entitled to a service fee charged by way of commission on the transaction or a flat rate if applicable.
Being a bird dog requires having a large number of contacts and networks within the industry since they mostly deal with insider information. Some states in the U.S. acknowledge and regulate bird dogs while some prohibit the act especially if it involves the exchange of cash.