What is Bird dogging?

A dog is a man’s best friend, and a bird dog is a real estate investor’s best friend. Simply, a bird dog researches properties for sale or forclosure and presents the best opportunities and qualified deals back to the real estate investor for a fee – either fixed or percentage.

How to Start

Well, first off, you need to find an active real estate investor in your area who has s a decent bankroll and is an honest upstanding individual. Try your local real estate investing club. You’ll have to meet with him, evaluate his character, and then straight out ask him if he’d be interested in having you as a bird dog. Generally, I think most investors would be down for having a bird dog since they translate into more good deals with less effort and due dilligence. Also, have a pitch ready for the investor to convince him if need be based on the previous sentence, and have your 30 second resume ready off the top of your head.

Finding properties

Theoretically, real estate is a simple game when you have the numbers and data. Most investors are looking to acquire properties for passive revenue from rent – or cash flow. So as long as the cash flow is good and positive, and the return on investment is good, the investor should be interested. Knowing the local market, rent rates, interest rates, general tax laws, and market conditions are vital when creating your leads for investors. The investor could supply you with all this information and his requirements so don’t get too anxious for not really having all the info off hand. So just understanding the investor’s desires are vital and will help you create accurate spreadsheets and other reports that the investor wants.

Getting Paid

The whole character issue comes into play here. First, you should have some sort of written contract written out stating how much you’ll get paid for a lead. It should start at atleast $500 and can go up to $5,000 depending on the size of the deal, so work out some scalable referral fee structure. Also, make sure the contract states something about not getting screwed over, because with the data and information you present to the investor, he could probably just bypass your involvement and purchase it by himself without paying you. — Hence, why the character and trustworthiness factor comes into play.

Real estate investing is a great vehicle to make a passive income, and by learning the ropes as a bird dog you can learn a lot, make some good money, and spring board your way into the real estate investing circle. There is surely a lot more to bird dogging than what is in this post since this was just a simple overview, so do some more research, network with a couple real estate investors, and get to bird dogging in this buyer’s market.

A little background on my college finances:

• I pay 75% of my tuition
• My college costs close to $18,000 a year
• Do the math

I am using some loans and have been fortunate to receive a few scholarships that make the first year or 2 fairly manageable. But starting in the fall of 2009, my reserves will be running dry. So the main objective for those with any type of reserves is to put the money to work for you. Initially, I planned on investing in stocks short term, making 10%, and liquidating whenever. However, I finally figured out I don’t have the skill set [yet] to invest in that fashion succesfully. So instead, I’m trying invest my $X,XXX in safer, high interest, short term investment vehicles since I can look at my finance spreadsheets for the next 3 years and precisely see how much and when my bills will be due.

So now that you got my objective / philosophy, here are some options I am either doing or considering.

Short Term, Safe

1. Zopa CDs - Zopa is a peer to peer lending company, similar to Prosper.com and LendingClub.com (kind of covered previously). Zopa CDs are CDs based on interest derived from loans given to members. It’s more of a non traditional bank loan that earns the interest for your CD. These CDs are FDIC insured so you know they’re safe, and they also give better interest rates than typical CDs. (I got 4.25% for 1 year last week, but they fluctuate frequently).

2. CANROYs – known formerly as Canadian Royalty Trusts, these are somewhat riskier investments that offer potentially great, stable yields. CANROYS are Canadian trusts (usually in oil) that are not taxed by the government because they distribute all of their profits to shareholders. However, in 2011, the Canadian government will start taxing them at a 40% rate, which has made them a little more risky in the short run for irrational reasons. The upside is that CANROYs pay anywhere from 8% to 15% annually in the form of a dividend, so any capital loss could potentially be offset by dividends. So although a little riskier, they do offer liquidity and high short term yields. Some examples are SJT, HGT, and PWE.

Other possible options… not as good in my opinion

1. Blue Chip, Dividend Stocks – Some people think the market is bottoming, in which case the high yielding blue chips would probably be a pretty good investment. I’m not convinced of this, so I find it hard to recommend. If you have faith in a particular sector, look at the blue chips and you’ll probably find some good values.

2. Prosper, Lending Club – Prosper and Lending Club, mentioned above, offer good rates. By investing in many credible, qualified borrowers, risk can be limited and returns can range from 5-10% depending on the borrowers found. I’m a huge advocate of both clubs (moreso Prosper cause they’re bigger, even though customer service is really bad), but their greatest drawback is that your money stays tied up for a mandatory 3 years under the terms of the loans. If you can afford to tie your money up for 3 years earning 8.50%, by all means go for it. I and most college students, however, probably shouldn’t have that illiquid of an asset on our books.

So up to this point, these four traditional investment vehicles are the best option for college students looking to gain a little better interest on their reserves while keeping it safe and liquid.   If anyone has any other options, definitely share them.  And as always, I am not a professional advisor, so consult with others before investing and do not take my opinions as fact. I, nor college-startup, is liable for your decisions.

I’ve been following the world markets very closely ever since I started playing around in the stock market , and the economic downturn has definitely gotten the best of my investing ventures. When I was reflecting on what to do with my money, I realized that my online business seems relatively unaffected.

So why do online content based businesses seem unaffected?

• Consumers will still consume your free content, and will in turn still see and/or click on ads
• It’s hard to tell whether the recession is affecting a firm’s online advertising budget for your sites, especially when Google brokers the ads through Adsense
• Our increasing inflation has not really increased the consumer price index as a whole yet

For those reasons, it is easy to forget the economy’s poor condition when working in a niche like online business. But the truth is, the average ‘recession proof’ businesses will eventually be hurt with the devaluing dollar. By the end of the year, $1 may only be $.80, and that will definitely hurt your purchasing power and bottom line if your wages don’t increase similarly.

I know this is kind of a rambling, reflective post on the economy, but I am concerned with my past profits and bank account being eaten away by inflation getting up to 5 or 6%. So I end with 2 questions:

Is your online business directly feeling the recession? If so, how?
Do you plan to hedge your business or capital against the deflation of the US dollar at all?

Where do I open an account?

There are a bunch of online brokerage accounts available, and they all have different requirements, fees, and offer different services to investors. Examples are E-Trade, Charles Schwab, Fidelity, Scottrade, and Tradeking. I personally use TradeKing because they only charge $5 per stock transaction, and since I’m not dealing with a lot of capital these fees can make a huge dent into my monies available. If you want a tradeking account you can get a $100 bonus as well (get in touch with me so I can refer you)

Market News

I’ve been trading based solely on my gut, the news, and my logic. The major news sites I frequent

• CNBC.com
• MarketWatch.com
• TheStreet.com

For more community based sites and/or blogs of experts I trust:

• ChrisPerruna.com – (Really good. I’ve been familiar with him since he started out.) – He uses a modified CANSLIM method that I plan on incorporating in my investment strategy (more below)
• The Kirk Report
• Wallaston Investments
• SeekingAlpha.com
• The Up Down - Great place to make a fantasy portfolio

Managing your Portfolio and Tracking Stocks

I use Google Finance alone to monitor my stocks. My Tradeking account obviously monitors my trades and performance, but I use Google Finance’s portfolio capabilities to track interesting stocks and my performance so far. It’s very intuitive, yet simple and clean. All you need is your gmail/google account Highly recommend it. Another similar product is offered over at MSN’s moneycentral.

Investment Strategy

As mentioned earlier, I rely on my gut/logic/news/trends to trade. This is an absolutely terrible trading strategy. Let me repeat that: Do not trade on your gut, the news, and logic, because the stock market is unpredictable and very irrational. I’ve gotten by without losing too much money so far, but all I’m doing right now is gambling.

So for real investment strategies, I recommend reading some investment books. The book that I plan on diving into later this spring is How To Make Money In Stocks: A Winning System in Good Times or Bad by William J O’Neill. I know it’s a long, spammy title, but this is a legit book. I’ve seen several peers online succeeding with investment techniques presented in this book known as the CANSLIM method. Chris Perruna as mentioned above bases some of his investment strategy on the CANSLIM approach, and he’s had good luck. This is definitely a must read for any noob investors, including myself.
So if you’ve always wanted to get into the stock market, open a TradeKing account, educate yourself, and prepare to start investing once we get out of this bear market/recession in the next 12 or so months. Make a fantasy account at the UpDown, or get your feet wet and gamble with a couple $XXX.

So how am I doing? Week 1: 5% Overall gain…. Week 2: Down 3.5% overall….mehhh…

The plain fact is that the most successful businesses are the ones that use their money to make more money. So how do you use your money to make more money? Here are some tips for that I’ve found effective. Just remember that I’m coming from the bootstrapping method for starting a business, and these may only apply to that method. What’s bootstrapping? Well, it’s all about building equity with lots of sweat and hard work, motivated by nothing but the promise of future rewards.

But to move beyond bootstrapping, you need to have a plan to put profits to work, and to expand operations beyond your own limited efforts. Here are five ways to effectively re-invest your profits into your online business.

1. Purchase Assets for Leverage

Let’s say that you’ve started a blog that focuses on “Green Homes” and that you’re making $3/day after 6 months of hard work. A next step might be to go out looking to buy an established website in a related niche. Maybe your initial blog is all about planning to build a brand new “green home” – you might try to find a couple additional sites to compliment and reinforce your current site. For example, “Green Home House Plans” or “Building a Home from Scratch” or “The Economics of an Energy Independent Home” or “Green Retrofitting” or even “Finding Cheap Land in the United States” – Assuming that the new site has been around more than 12 months, it’s definitely worth looking at for acquisition.

Buying established sites to help reinforce your new blog can pay huge dividends and start you on your way towards niche domination.

2. Pay Writers/Bloggers

Around January of this year I learned that my business receives a lot more value from my effort when I limit the time I spend writing. Successful entrepreneurs should spend most of their time strategizing and executing plans behind the scenes. Full time blogging is exhausting and often frustrating. Contract out your writing needs to experts in the field in which you need writing done. The best place to look, in my opinion, is not to full time bloggers, but rather to people who have never blogged before! Sounds weird, but probloggers take shortcuts that diminish the value and passion factor of the content. A search on Craigslist can net you someone who loves the topic so much they’re not really in it for the money.

3. Find a good SEO

The fact is that in today’s search engine world, you need your site to be perceived as an authority on its topic. You can make a lot of progress simply by buying older, more established sites and then linking into your newer sites, but, for better or worse, that is no longer sufficient. You need dozens, if not hundreds, of content level links from other reputable and relevant websites.

But beware: Not just any link will do. Some SEO can have negative affects. Especially if your SEO just tosses up run of the site links. Your SEO should know what it takes to turn an average site into an authoritative site. So the most important thing you can do is have your SEO discuss his or her philosophy, and determine whether it is thoughtful and strategical.

4. Diversify Your Investments

When you start making 4-5 figures per month, it’s time to diversify your revenue sources. Even if you don’t have what it takes to start an online store, consider looking for website owners or bloggers who are looking for investments. I put a post up over at Performancing announcing my interest and receive at least one inquiry every month, several of which panned out.

What many people don’t understand is that when you invest, you are letting your money do most of the work, instead of you. So put your money to work in as many profitable places as you can for ultimate diversification. Lately, I’ve been investing most of my money to help bring offline businesses online. But I’m not the one bringing them online. I’m letting others do that for me. My investment is simply an attempt to expedite business growth and to move it beyond the bootstrapping phase.

5. Become part of an investment group

Now more than ever, success on the web directly reflects a site’s perceived authority. Most young entrepreneurs don’t have the financing available to gain the leverage and exposure they need to dominate a niche. That’s where the idea of an investment group comes in. Pool your money together with other likeminded entrepreneurs, setup a corporate structure that allows for share-based ownership, and then execute the first four steps that I’ve listed above, only this time as a group of shareholders with equivalent interests in seeing success.

Creating strong, authority websites can be accomplished more easily and effectively from within the context of an investment group then by a single individual trying to bootstrap her way to success. But becoming part of an investment group is only possible once you’ve bootstrapped yourself into a position of having significant cash on hand to invest.

Conclusion

So those are five ways to reinvest money for your online business. To end, I’d like to ask question of the College Startup readership: how much profit do you re-invest in your company and how much do you pull out as salary?