Real Estate Investing: Opportunities for Lead Generation in Property Sourcing
Searching for investment properties can be a daunting task, especially for real estate investors who are scouting for high-potential deals. But there's a way to streamline this process and earn a fee for your efforts. This approach is known as property sourcing or bird dogging, and it's a lucrative opportunity for those willing to help investors find the right properties. In this article, we'll explore the details of property sourcing, the potential benefits, and where you can find potential clients.
What is Property Sourcing (Bird Dogging)?
Property sourcing, often referred to as bird dogging, is a technique where you identify properties that meet specific investor criteria—such as vacant, run-down, of a certain size, or location. You then provide this information to the investor who can follow up and potentially make an offer. If the property is successfully purchased, you may receive a commission ranging from $500 to $1000, depending on the particular deal and agreement.
Where to Find Investors
There are several ways to connect with real estate investors who may be interested in a property sourcing deal:
Local REIA (Real Estate Investor's Association): Attend local REIA meetings to network with fellow investors and learn about potential opportunities. Meetup Groups: Join virtual Meetup groups of real estate investors to find like-minded individuals and discuss potential deals. Craigslist: Post inquiries on local Craigslist forums to reach out to potential clients.Alternative Techniques: Wholesaling
Another technique to consider is wholesaling. This involves putting a property under contract and then assigning the contract to an investor. In this scenario, you take on a significant amount of work to actually put the property under contract, but importantly, you don't usually purchase the property yourself. The potential commission in a wholesale transaction can be much higher, ranging from $5000 to $30,000 or more, depending on the value of the property and the deal you negotiate.
How Wholesaling Works
In a wholesale transaction, you're essentially selling your contractual rights to purchase the property. Unlike traditional real estate brokerage, you don't represent the original homeowner. Instead, you and the homeowner have already agreed on a purchase price. The investor you assign the contract to will then close the deal with the homeowner.
Legality and Ethics
It's important to note that engaging in real estate transactions for another person's property without a license or as an employee of a property management or development company is against the law in most places. However, property sourcing (bird dogging) and wholesaling can be legal and ethical ways to earn a fee for your services. Always ensure you comply with local laws and regulations.
Pros and Cons of Property Sourcing
Sources indicate that one of the key benefits of becoming a successful real estate investor is eventually having too much free time and money. This abundance of resources can lead to having the freedom to find properties for others and earn a fee for your efforts. This process is called deal sourcing, and it's a fantastic way to generate income with no upfront investment.
How to Find Potential Clients
To find potential clients, you can:
Attend property networking events to connect with investors and discuss opportunities. Create targeted ads on social media and real estate websites to attract property investors. Utilize online platforms and forums to expand your reach and connect with potential clients remotely.By actively engaging in property sourcing, you can leverage your expertise to help real estate investors find the right properties and potentially earn valuable commissions along the way.