Active real estate investors often give brokers standing orders to find investment properties for them to acquire, a practice called “bird dogging.” The investor describes their target investment and asks to be contacted if a property matching their criteria comes across the broker’s desk. To work effectively, the broker should be given sufficient information to find and screen properties without wasting either the broker’s or investor’s time. Here are a few tips on information investors should provide to their broker when asking them to find investment properties.
Target Property Types and Features
Be specific about the type of investment properties desired and identify features that are either “must have,” “might have” or “must not have.” Provide examples of your previous investments that are similar.
Identify preferred property locations as neighborhoods rather than cities or zip codes. Better neighborhoods come with higher price tags, so make sure price and location are compatible and realistic.
Provide budget guidelines and explain the methods of financing you plan to use, if any.
Preferred Closing Schedule
Competitive offers should contain escrow closing schedules that are typical (or better) for the property type. For example, single family flips are often cash deals that close escrow in 10 to 14 days. Land purchases that include provisions for obtaining entitlements during escrow often close in 12 to 24 months. Discuss possible purchase scenarios and preferred closing times with your broker.
Let the broker know if you have the desire and resources to buy a fixer upper or if you prefer turnkey properties in pristine condition – or anything in between.
Management Influences and Profitability
Properties are often advertised as having “below market rents” or other management issues that should warrant a discount on the sale price. Let your broker know if you are open to looking at properties with these types of opportunities.
Some investors say they are looking for off market properties only. While properties are sometimes circulated among certain brokers, buyers and sellers outside standard real estate marketing channels (sometimes called pocket listings), they seldom offer the deep discounts that investors are looking for unless the seller is being poorly served by their broker. This is also true of properties being sold by estates in probate. Buyer beware.
Offer Turn Around Time
Investment property listings typically provide specific dates for submitting offers. Let your broker if you have a minimum turn time for preparing competitive offers.