When an investor asks a scout to pre-qualify the seller before he'll pay more, that's not scouting anymore

I'm brand new at this, so let me get the basics straight. When you say you send an address, is that it? An address and photos and they pay you $1,500 if it closes? I assumed there was more to it than that and it turns out my assumption was the whole reason I hadn't started.

The lead type nobody is paying you for yet is the tired landlord. Owners of small multifamily get a letter a month from people who want the building, and the ones that get read are from someone who mentions something specific, a broken gutter, the unit that has been dark since spring. You are on those streets. A four unit with two vacant windows is worth more to an investor than another vacant single family, and there are fewer people hunting them.

What's your cost per lead right now? You said you're on those streets for work anyway, so your driving is free, which most people writing about this can't say. If your 11 leads cost you basically gas and an hour of typing, $3,000 a quarter on the flat fee is already better than it looks.

"Softening them up" is scope creep with a bow on it. I get this on renovations constantly. The change order sounds small, the price sounds better, and six weeks later I'm doing three trades I never quoted. He's not paying you double for the same job. He's paying you double for a different job that happens to have your old job inside it, and once you've done it once it's the baseline and the fee goes back to negotiable.

These agreements get read far more often than they get signed, and three things in your post matter. One, licensing. Whether talking price and terms with a seller for compensation makes you an unlicensed broker depends entirely on your state's statute and how your regulator reads it, and the answers genuinely differ state to state. "Everybody does it" is not a defense, and A will not be standing next to you. That is a question for a real estate attorney licensed where you work, one hour, worth the money before you knock on a single door. Two, the fee structure. 2 percent of purchase price puts you on the wrong side of A's interest. Ask for a flat fee with a bonus tier instead: $1,500 base, $2,500 if the lead closes at or under whatever he tells you his buy box is. Same upside, and your fee no longer moves with the price he pays. Three, and this is the part to fix regardless of what you decide. Your agreement says payment on closing with no exclusivity, but does it define how long your lead stays yours? Investors sit on addresses. A calls in March, gets nowhere, buys it in November from a wholesaler who found it independently, and tells you it was not your lead. Put a registration window in writing, six or twelve months from submission date, and require him to notify you when a submitted address goes under contract. That clause is worth more to you than the extra 0.5 percent. B and C have not asked you to talk to anyone. That tells you something about A.

Here is the other side on the flat fee. Across almost every fee based role in this business, the thing that eventually caps the earner is being paid the same whether the deal is mediocre or a home run. If girder is the one finding the $60k spread, a percentage is the only version where he sees any of that. The fix is to tie it to something other than purchase price. A percentage of the investor's actual assignment fee or profit works, if you can get him to show you a settlement statement, which he probably will not.

Track it like a service business, because that is what it is. Small crews that get paid on schedule get paid because everything is dated and confirmed in writing. Send every lead by email, never text, with the address and the date in the subject line. When he responds with "got it" you have your registration. Cap how many investors get the same address at once as well, because if three of them call the same owner in a week the owner stops answering and you have burned your own lead.

If he closes eight months later, do you actually find out? Nobody sends you a note. Are you checking recorder filings yourself, and does your county even put that online? Mine posts deeds but not prices, so I can see the transfer happened and nothing else.

Vacant lots next to the vacant houses, if you're already looking. Fewer people are asking about those and the owners are often three states away and easy to find in tax records.