Driving For Dollars Real Estate: Complete Guide

One of the most exhausting aspects of real estate investing is searching for properties and motivated sellers. No matter how long you’ve been in business, it’s still a challenging aspect, but there’s a way to scale through seamlessly.

Every real estate investor seeks both value and motivation in every potential deal. However, some real estate investors get frustrated when they find themselves contacting the same lists of property owners by direct mail. Direct mail has proven expensive, and the competition is very high. For the most part, there is usually over saturation in the market, which leads to lower response time and, in the long run, results in lower ROI(Return of investment).

1- What is Driving for Dollars
2- Benefits of Driving for Dollars
3- How to Make the Most of Driving for Dollars
4- Practical Driving for Dollars Steps

So, For a highly competitive market, how do you get an edge over your competitors, Find motivated sellers and close more deals cost-efficiently? The answer is quite simple; You drive for dollars.

Driving for dollars is one of the first things you could learn in the real estate business to get started in marketing. It is one basis of building lists and data by real estate investing businesses, and It is also a more direct method of discovering wholesale properties. And it is an excellent way of generating quality leads with minimal competition.

If your budget is rigid, you can start by driving for dollars, It is cost-efficient, and the ROI(Return of investment) of driving for dollars exceeds that of a mailing sequence. In addition, driving for dollars real estate helps to be new in the business advantageous because it gives you a first-hand experience of what properties look like and the ones you’d want to make a profit on.

What then is driving for dollars real estate, and how can you make the most of it to scale your business?

What is Driving for Dollars?

Driving for dollars, as the name implies, is when you go around specific neighborhoods looking for distressed properties to which you might want to market. Essentially, it involves driving around(biking or walking) around a target area to find off-market properties.

Driving for dollars allows you to see what conditions these properties are and know what properties you want to market to.

Benefits of Driving for Dollars

Driving for dollars usually costs little money, and there is a likelihood that you’d be able to find deals your competitors know nothing about. It’s like searching for gems real estate investors haven’t seen or know about because, more often than not, these properties are usually not listed to be up for sale.

Driving for dollars is efficient because not only does it give you a cutting edge, Many real estate investors might not drive for dollars because it is time-consuming. It’s a generally accepted hypothesis that whatever requires more time and effort to secure a lead usually yields more results; there are fewer competitions when you have to work more to obtain a lead, which invariably results in more profits. Your effort in researching will pay in the long run.

Here’s a detailed guide on how to use driving for dollars to find motivated sellers.

How to Make the Most of Driving for Dollars

If you want to make the most of your drive-for-dollars session, it is best to set goals so that you don’t drive around without a sense of purpose and that you can measure/track it to understand whether the business is working or not, that is to know whether you are on the right track. For example, you can set goals regarding the number of distressed properties you want to find or a time frame.

Practical Driving for Dollars Steps:

Step 1: Choose a Targeted Neighborhood

The first step is to choose a targeted neighborhood you want to drive for dollars. This could be a place you’ve closed a deal before or somewhere that seems to be a profitable venture. When choosing an area, the primary things to consider are the relatively median property prices, house age(Old houses have the tendency to be distressed and not properly maintained), zip codes, how secured the neighborhood is, and if it’s a popular place for real estate investors to invest.

Step 2: Analyze and Prepare

As mentioned earlier, It’s best to set attainable goals when you want to drive for dollars. After choosing a target neighborhood, consider the best time to drive around and how long you want to. Generally, It is best to drive for dollars between 10 am and 2 pm on weekdays; when the majority have gone to work. You can have enough time to explore the neighborhood without the fear of being tagged a creep.

Preparation is critical when you are about to go for your drive-for-dollars session. You must take a smartphone along to take photos of the houses, a pen, and a notepad in case you need to jot anything, and most importantly, a vehicle. Alternatively, you could walk or use a bike but using a vehicle is preferable and faster.

Ideally, the more properties you can find, the higher your odds of landing great deals.

Step 3: Watch Out for Red Flags

Every real estate investor is seeking to strike an excellent real estate deal. A good real estate deal is when you buy a property much cheaper than its market value. So, while driving for dollars real estate, there are visual characteristics to watch out for. In order words, there are red flags that might distinguish properties, and that’s what you want to look out for. Ultimately, properties that don’t seem to have any sense of pride and ownership.

It doesn’t matter whether the houses are vacant or not as long as they are not Bank owned. You must drive around the neighborhood slowly, pay attention to details, and note these property addresses.

What to Look Out For;

1. Multiple satellites would mean rentals
2. Faded and peeling paint
3. Mailbox damaged or mailboxes with no mail
4. People who don’t care about their house will likely not park well
5. Shutters/blinds in disrepair
6. Overgrown vegetation; 3ft-4ft high
7. No sign that the property is Bank owned

 

These are the kind of property owners to contact. They are probably frustrated and can’t keep up with maintenance, and you might find a motivated seller. As you move around the neighborhood, do well to take photos of the distressed properties you’ve found.

Step 3: Research

Once you are done with your driving-for-dollars session, the next step is to do additional research. First, it would help if you found the property owner. Then, you can check public records for more information about the property or your local county assessor’s website to find the property owner and all other information.

Information You Need to Look For:

1. Property owner’s name
2. Owner’s mailing address
3. Last sale price and date; People who just bought their properties will likely not be motivated sellers.
4. Ownership type; It is advisable to stay off Bank owned properties.
5. Tax or public records

 

Step 4: Contact the Property Owners

The most pivotal step is to contact the property owner based on the information you’ve gathered. Then, you can choose from the numerous marketing channels that best suit you after you’ve counted the cost.