Bird Dogging vs Wholesaling

Bird Dogging vs Wholesaling – What’s the Difference?

May 13, 2022

If you have a knack for finding great properties, you may make a great living bird dogging or wholesaling. While they have some similarities – there is one major difference between the two.

A Bird Dog finds real estate deals and passes them on to a real estate investor. If a sale occurs, the bird dogger is entitled to a referral fee.

The goal of a wholesaler is to find an undervalued property, put it under contract, and then sell that contract to a potential buyer. Importantly, the contract that is established allows a wholesaler to sell the property for more than the listing price. The markup that they add to the property price is effectively the amount of profit that a wholesaler can make in a real estate deal.

Now let’s take a look a closer look at the differences between bird dogging and wholesaling to decide which strategy is right for you.

Key Points

What is Bird Dogging?

Bird dogging means you find great real estate leads and you turn them onto an investor. You don’t put the property under contract or put forth any money. Real estate bird dogs turn the lead over on good faith and receive a commission for your work.

How Does it Work?

Real estate bird dogs work hard. They do all the legwork finding properties, vetting them, and passing the information along to a potential buyer.

Bird dogs are the eyes and ears of the industry. They do the work for investors who don’t have time to find properties and vet them. A busy real estate investor will gladly pay a bird dogger because they save them hours of hard work and effort.

When it’s done right, an experienced investor can swoop in and buy the property the bird dog turned them onto, closing the deal quickly and putting forth very little effort. When a deal is successfully executed like this, the bird dog is eligible for a referral fee.

What is Wholesaling?

Wholesaling also requires someone who is quick on their feet and great at research, however, there’s a difference. A real estate wholesaler doesn’t just find the deals and pass them along. Instead, they put the property under contract and assign the contract to a potential buyer.

How Does it Work?

Wholesaling requires a few more steps than bird dogging. Once a real estate wholesaler finds the property, he/she puts it under contract, finds an investor, and then sells the property to him/her.

Wholesalers often need money for the transactions though, especially if they take possession of the home and then turn around and sell it. For example, the signs you see ‘We Buy Houses,’ these are often wholesalers who buy foreclosed or rundown properties and turn around and sell them for a profit to investors.

Also, if wholesalers can’t find an investor for a property they put under contract, they are on the hook to pay for the home. This makes wholesaling involves significantly more risk than bird dogging.  

Bird Dogging vs Wholesaling – What’s the Difference?

What’s the Difference Between Bird Dogging and Wholesaling

There’s one major difference between bird dogging and wholesaling – the money you must invest. Bird doggers don’t need any money. They simply pass along each good real estate deal they come across, earning a bird dog fee for doing the legwork.

Wholesalers often need money and sometimes have to sit on the property for a while. In a perfect world, wholesalers would put a property under contract and find an investor immediately, so they never have to put money into the project, but we don’t live in a perfect world. Wholesalers often have to sit on a property and put up an investment until they find the right investor.

How to Become a Bird Dog in Real Estate

Bird dogging is the easier career to get into if you’re thinking about investing in real estate and it’s easy to get started.

  • Research the laws in your area – Make sure bird dogging is legal in your area. If it is, also make sure you know your rights and boundaries before starting.
  • Get a mentor – It’s a great idea to work with someone in your area that’s already been a bird dog. Follow him/her around for a few deals and see how it’s done.
  • Create a contract – You want to get paid for your legwork and effort, and the only way to ensure it is with a contract. Put everything in writing and have an attorney review it.
  • Perfect your technique – Since you want to be a bird dogger you probably have an eye for the right properties, but it doesn’t hurt to strategize and figure out a way to spend the least amount of time finding the perfect properties.
  • Start your business – After you set up the basics, you’re ready to start finding properties and making deals.

If you would like to learn more, this post provides more details on how to bird dog real estate deals.

Final Thoughts

If you’re thinking about getting into real estate investing, bird dogging is a great way to start. You don’t have to put up any money and you make a commission each time you connect a property with an investor.

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