Finders fees - Posted by shawn frey

Posted by shawn frey on March 29, 1999 at 11:02:40:

You guys hit the nail right on the head!!!

Finders fees - Posted by shawn frey

Posted by shawn frey on March 28, 1999 at 16:07:00:

Howdy!!!

I enjoyed reading the articles on the site. When I was in
England with my wife (USAF) I got into the tenant "finder"
service. What I mean is that I found renters for vacant
properties. I took pictures of the properties and then
showed them to perspective tenants. The service was a
hit and I earned 10% of 6 months rent as a one time
finders fee. I have talked to several real estate
professional here, in Oklahoma and they have all told me
that this type of service requires a real estate liscense. I
checked into getting a liscense and after that I realized that by the time the broker got his money there would be nothing left for me.

Anyway, I love looking at properties and have developed a
new plan of earning finders fees. Do you have any
suggesstions as to how to find local real estate investors?

Also have any of you done finders fees arrangemnts before?
If so would you be kind enough to let me in on the type on deal that worked for you.

Your expertise would be fully appreciated.

Thank you for your time.

regards,
shawn

PS My new plan includes lease options and log cabins

I think Lonnie pays finders fees. - Posted by Michael Murray

Posted by Michael Murray on March 28, 1999 at 22:07:28:

Lonnie says he pays people to send buyers & sellers his way. I don’t know if he calls it “finders fees” or something else, but it is the same idea. If Lonnie does it, you know it can’t be wrong.
Right?
Michael Murray

Re: Finders fees - Posted by JPiper

Posted by JPiper on March 28, 1999 at 18:25:34:

I think that you will find that “finder’s fees” in most states are illegal, and not enforceable without a real estate license.

Without the benefit of knowing your specific idea, you would be better to tie the property up with a contract, and then assign to an investor.

JPiper

Holy Cow! - Posted by Bill K. (AZ)

Posted by Bill K. (AZ) on March 28, 1999 at 16:42:43:

Shawn,

I’m glad that I don’t live in Oklahoma. I’d certainly hate to think that all of my “bird dogs” would have to have a real estate license to send prospective tenants my way.

I have every intention of paying “finder’s fees” to anyone who finds me a buyer, seller or tenant. I don’t think I’ll ask to see their real estate license first.

If that’s for real, it’s UNREAL!

Bill K. (AZ)

Re: Finders fees - Posted by JoeKaiser

Posted by JoeKaiser on March 28, 1999 at 20:26:16:

I think Jim is looking at this from the other side. I would be tough for you to COLLECT finder’s fees without a real estate license, (I suspect this is where Jim’s coming from), but it’s not a problem for you to PAY finder’s fees to people who want to send deals your way.

Joe

Ron LeGrand Weighs in on Finder’s Fees - Posted by Bill K. (AZ)

Posted by Bill K. (AZ) on March 28, 1999 at 19:06:44:

Somebody please clarify the issue of paying “finder’s fees” for me. Can you, legally, or can’t you?

Here’s what Ron LeGrand has to say about paying “bird dogs” (from his “How to Find Motivated Sellers, Part 1” in our “How To” articles section):

Referrals

Would it benefit you to have ten people searching for deals on your behalf? How about a hundred people? Could you afford to pay them all? The answer is “Yes!” You can certainly afford to pay someone $250 or $500 when they bring you a deal that makes you $10,000 or $20,000 in a short time. These folks are called BIRD DOGS, and it is a fine source of leads that you otherwise would never hear about.

It doesn’t matter how many Bird Dogs you have working for you because you only pay them if you actually close on the deal. If you’re a serious investor, you should always get people to bird dog for you. Ask everyone that you talk to if they know of anyone selling a house. Tell them that if you buy one on their referral that you will pay $250 at closing. Let the word get around town that you pay for leads, and you may have more than you can handle.

Bill K. (AZ)

WHOA! What’s This? - Posted by Bill K. (AZ)

Posted by Bill K. (AZ) on March 28, 1999 at 18:42:43:

Jim,

NOW, you’ve got my attention.

Are you saying that I cannot pay “finder’s fees” unless I have a real estate license? I was going to advertise a “finder’s fee” to folks who suggest properties that I eventually purchase. This is REALLY going to put a crimp in my plans to attract “bird dogs”. What’s their motivation if I’m not, legally, allowed to pay them a fee?

I’ve read several posts/articles about folks paying for leads that turn into purchases. What am I missing on this issue?

Bill K. (AZ)

Re: Holy Cow! - Posted by shawn frey

Posted by shawn frey on March 28, 1999 at 17:11:59:

As far as I know this is for real. I talked to the instuctor at Western Oklahome State College and he said that anyone who receives payment from any real esate transaction must be “in the system”. Of course this would not apply to private investors.

WHEW! - Posted by Bill K. (AZ)

Posted by Bill K. (AZ) on March 28, 1999 at 20:47:09:

Joe,

Thanks for clarifying that. The marketing side of my brain went into panic mode.

I guess I won’t have to change my advertising after all?

Bill K. (AZ)

Re: Ron LeGrand Weighs in on Finder’s Fees - Posted by shawn frey

Posted by shawn frey on March 28, 1999 at 19:59:44:

Yes, you can get away with this. What the college instuctor told me was that no one is obligated to pay you since you are not in “the system”. What this means is if someone brought you a deal you do not by law have to pay this person a dime. This obviously does not make good business sense, however if and when you do pay the finders fee you could indeed be breaking the law. Think of this as operating in the underground economy and you’ll do fine. That’s what I did when I was in England and it worked quite well. I only got stitched up once…by an Italian produce grower. He thought he could pay my fee in lettuce and cucumbers. Practically speaking though, I have bartered my fees for various household items in the past. I love to barter and haggle.

Don’t get us started on “college instructors”. - Posted by Jim IL

Posted by Jim IL on March 28, 1999 at 22:46:16:

Obviously, no one on CRE is advising for you to “break the law”, but certainly do not miss opportunity when it is staring you in the face.
I am finishing a negotiation on a home that was brought to me by a local person. I talked to this guy I used to know many years ago, last Wednesday night and he asked “What I was up to these days?”.
I told him, and he said, “that sounds interesting”. He then went on to tell me about these homes he “always” sees on his route. (he is the local newspaper manager of Carriers and distribution…paper boy boss).
I told him that he should call me the next day and we’d discuss just exaclty what I was seeking and go from there.
The next day, we talked,and I faxed him a copy of the “inspection” sheet from Legrands course, along with a paper I made up of “what, when and where” I was looking for.
Friday morning he had 4 homes for me, and one in particular that looks GREAT for flipping. I made an offer Friday afternoon, and the seller wants to “talk Monday” about “working something out”.
So, when and IF I close on this, I’ll give my “bird dog” $500 (I should make at least $10k, if I can close this one) and then my “bird dog” is happy.
I will pay this guy and anyone else who brings me a deal. $500 is BIG money to them for a few minutes of info gathering and saves me more time to actually “work the deal”.
Isn’t it worth it?

On this board in the past, many people have said, “but my college professors said?”…
Well, my “teachers” and “mentors” from here, are the ones “doing” the deals and making money, so I’ll listen to them.
So far they have NOT steared me wrong! :slight_smile:
And the proof is in the CHECKS that come home from close in my hand.
Good luck to you,
Jim

Re: WHEW! - Posted by JPiper

Posted by JPiper on March 29, 1999 at 24:11:48:

I was referring to the receipt of a finder’s fee…which is what I thought Shawn was referring to. As I read my post it doesn’t appear particularly clear though. Receiving a finder’s fee is illegal and unenforceable without a license in most states that I am aware of.

There is nothing to my knowledge that would preclude you from paying a “bird dog fee”. Whether the bird dog can legally receive such a fee, or legally enforce such an agreement…I would say no.

By the way, I will pay bird dog fees myself.

JPiper

More on “college instructors”. - Posted by raelynn mitchell

Posted by raelynn mitchell on March 29, 1999 at 03:32:41:

Not to beat a dead horse, but when’s the last time you saw a Federal Express van or truck in your area?

Fred Smith got a C- on that idea from his college instructor, who supposedly wrote in the margins “It’ll never work.”

I wonder where that guy is now…

Food for thought.

Re: WHEW! - Posted by Bill K. (AZ)

Posted by Bill K. (AZ) on March 29, 1999 at 10:16:38:

Jim,

Thanks for clarifying.

After re-reading the original post, I believe that I misunderstood the issue.

Sorry for the confusion.

Bill K. (AZ)