How to Avoid Scams When Filling Your Lead Funnel

Christina El MoussaBlog, Flipping Houses, Real Estate Business0 Comments

Caution Tape

Tarek and I talk a lot about keeping your lead funnel full and always looking for great deals on foreclosures, short sales, and other distressed properties. Unfortunately, a lot of scammers know that real estate investors are always looking for great leads, and that can be a big problem for your business. Let’s take a look at a few ways to avoid real estate scams as you look for motivated sellers and great flip properties.

How Lead-Finding Scams Work

First of all, there are a lot of different real estate scams out there, and it’s easy to get caught if you aren’t careful. For example, if someone claims to be an expert bird dog, they’re going to promise to find you a ton of leads on great deals. This can be a legitimate offer, or it can be a huge scam.

A lot of house flippers use bird dogs to keep their lead funnels full, and there’s nothing wrong with that. Getting someone else to find you leads while you follow up on them is a great business plan, but be careful. Don’t ever pay someone upfront to go find your leads. This is a classic bird dog scam, and it won’t do anything but empty your wallet.
Another lead-finding scam is a little bit more involved than a simple upfront fee. In this instance, your “bird dog” actually finds you a lead on a house that isn’t for sale. They’ll direct you to people who do not own the property who will then “sell” you a worthless deed.

Find Your Own Leads Instead

So how can you avoid these kinds of real estate scams? First of all, if you have the time, you can find your own leads. I’ve talked about doing this in other blog posts. And, if you watch Flip or Flop, you’ve seen me pull over on the side of the road with Taylor in the car with me when I saw a potentially profitable flip house.

Hire People You Trust

Of course, as your business grows, you won’t be able to do every single task yourself anymore. You’ll have to do some delegating, and that can mean delegating the task of finding leads. Instead of contracting with a bird dog, though, why not hire an intern or a less experienced flipper to help with your business?

As you mentor them, they’ll learn about the business and take over more of the tasks you don’t have time for, like finding leads. If you pay them based on commissions, they’ll not only be motivated to find leads, but they’ll also be motivated to get really involved with your flips and turn them into really profitable sales.

Talk to Other Real Estate Investors in Your Area

Finally, if you’re going to contract with a bird dog, talk to other real estate investors in your area about who they use and who to avoid. This can yield some very valuable information about the best people to work with to avoid a scam. And, of course, never pay a bird dog upfront and always get a written contract for the commission you agree to pay them once a deal goes through.

There are a lot of real estate scams out there, but with a little bit of attention and education, you can avoid them. For more information on how to avoid crooked bird dogs and other real estate scams, check out a Success Path Education seminar near you. Tarek and I love helping new investors learn the ins and outs of this industry, and we especially love helping people avoid pitfalls like these kinds of scams.


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