“If you have a good real estate lead but you don’t know how to do the deal, selling that real estate lead to an experienced investor and gaining experience by working with him or her will lead to better outcomes for all parties involved” – Nancy Gonzales
As a real estate investment professional, I often talk with people who want to invest but don’t know how. They’ve had the idea but were never really able to take action. Suddenly, a friend or family member has a situation with a house that looks like a scene from “Flip This House” and now they’re ready to pounce. But if you don’t know what you’re doing, is it wise to try to experiment on your own?
Unfortunately for many the field is challenging, hard to get into, and requires access to money and expertise to be successful. I know it was for me when I was starting out. That’s part of the reason why I started REI Consulting. I wanted to make it easier for others to share in the lessons I’ve learned.
One of the lessons I learned long ago was that you don’t need to wait to get started. There are easy, low-cost ways to get into real estate investing without risking your money or credit. In fact, if you have an investment lead (like the situation above) and a real estate investment professional interested in working with you, you can begin right away.
Maybe you’ve found a lead and are asking yourself, “can I make money selling real estate leads?” Yes, you can. In the business, we affectionately call this becoming a bird dog.
What is a bird dog?
If you haven’t been hunting before, you might not have heard of the term. When hunting birds, a bird dog will scare birds from bushes or hedges so the hunter can shoot the birds. Afterward, the dog will retrieve the birds.
A bird dog is also used in some businesses. Here a bird dog is someone who can find a person or a special item. In real estate, a bird dog is someone who gets paid to find distressed properties for a more experienced real estate investor. We call the distressed property a lead. The bird dog finds the lead and then partners with another investor to make a profit for both parties.
What are the advantages of being a bird dog?
Becoming a bird dog is a great way to get into the real estate investing business. You can start selling real estate leads today. All you really need to start today is a good lead and an investor you want to work with. Here are five other major benefits of beginning your real estate investment career as a bird dog.
- No risk to your financial capital
- No risk to your credit
- Build relationships with local professionals
- Learn about real estate investing in your area
- Build a portfolio of deals
Selling Real Estate Leads
One of the first questions I get from people interested in becoming a bird dog is, “Why would I sell my lead? After all, it’s MY lead and I can make a lot of money off of it.” It’s a good question. Here’s a video I shot talking about why you might want to sell your leads.
In the video, I talk about a few main reasons why investors sell their leads:
- Not enough experience in how to best use the lead.
- Lack the knowledge of how to best approach the deal.
- Don’t have the proper sales or negotiation skills to put the property under contract.
Don’t get greedy. We all come across opportunities to refer people business by doing things we’re not skilled in – all the time! How many conversations do you have with people who have a problem with their car, an issue with their plumbing, or a recommendation on where to get a good meal?
Probably all the time.
When they talk to you about their car making a weird noise, you probably don’t make a decision to become a mechanic because you’re worried about losing an auto repair sale, right? You’re not going to whip them up a fancy cajun meal when they ask you for a good place to get some gumbo, right?
If you’re not experienced as an investor, don’t be greedy and perform a task you’re not yet skilled in because you’ll cause more harm than good. Make the decision to sell that lead and see if you can work with the investor to learn how to do deals like this in the future.
What makes a good real estate lead?
In order to know how to get the most from a lead, we need to learn how to value a lead. When I get a lead, I break it down into four parts which can be scored.
- How old is the lead?
- Where did the lead come from?
- Will I be the first to speak with the client?
- How ready is the buyer to sell?
- Does the buyer have an asking price?
You can score these 5 questions to get an idea of whether the lead is hot, warm, cool, or cold. For example, say you just spoke with a neighbor about the house they’ve just inherited. They need to sell to finance a new house. This is a fresh lead that came from someone you know and trust. No one has spoken with them yet and they want to sell quickly. Great, this is a hot lead. I encourage you to build out your own system for scoring leads as you go along.
How do I find leads?
So maybe you got lucky with your first lead and you want to find more. Where do you look for leads you can bird dog? Here are a few ideas for where you can find your next hot lead.
- Host a housewarming party or a block party
- Get involved in community events (school, church, volunteering, etc.)
- Talk to co-workers
- Ask your social network
- Drive around and look for FSBO signs or abandoned (boarded windows & unkempt laws are giveaways) houses
Here at REI Consulting, I’ve partnered with bird dogs who’ve found leads in every possible way. Any conversation during the day could turn in to a lead, maybe not a hot lead, but you never know.
Making the Most Out of Selling Your Real Estate Leads
You have a real estate lead and you’re ready to get out there and become a bird dog. You’ve decided this is a great way to start your career. Congratulations! The last piece is to make sure you understand the value of your lead and how to get the most out of selling real estate leads.
I tell my clients to begin by finding someone who can give you an honest idea of how much the lead is worth. This can be difficult. Call around to local pros and ask to meet. If you have time, try to compare the offers from a few local investors. Don’t be afraid to negotiate if you think you have a strong lead. Consider finding a real estate investment coach who can teach you about leads.
