Andrew-Schultz.com

Bird dogging and wholesaling are two activities in real estate that while similar, have one very fundamental difference.

Bird dogging can be seen as a way to get into real estate, without having to put a lot of money down to do so.  Bird doggers will investigate a market to find the best deals available, using resources such as foreclosure lists, auction lists, distressed property lists, and the MLS where available.  Using a variety of formulas, they will determine what properties would make a good investment based on their current value, cost of repairs, and estimated value after the repairs are completed.  They then forward these deals to real estate investors, and are paid.  Their pay may be based on the referral to the deal, or at the closing of a deal.  Normally they are paid more for “closed” deals than for referrals, but the pay day is usually a few hundred dollars on a closed deal.

Real estate wholesalers are similar to bird dogs, but there is more of an investment in both time and (sometimes) money.  The real estate wholesaler will find the deals, the same way a bird dog will.  The difference is in what happens next.  They will then put the property under contract.  At this point they then find an investor to buy the property from them for more than the price of their contract.  The difference between the contract price and the price the wholesaler sells the property for is considered their “consultation fee”, and can range from one to several thousand dollars!  There is a MUCH bigger payoff for wholesalers than bird dogs.

By leaving enough value in the property for the purchasing investor, wholesalers allow for rehabbers to purchase property (still at a deal), do the rehab work to bring the property to its true value, and resell it, thus turning a profit for themselves.

Many people will start off as bird doggers before moving to wholesalers, because of the amount of money involved in becoming a wholesaler.  Many wholesalers then move in to real estate investing themselves.  This stepping stone effect is common, and there is a lot of money that can be made in wholesaling!