Driving for dollars is a great way to find deals if you are creative enough. New investors often rely exclusively on their marketing efforts or networking campaigns to put deals in their pipeline. These techniques are tried and true, but you can also find new deals from the comfort of your own car. Every time you hop in your car, you should view it as an opportunity to get a lead that can ultimately result in a deal. Many times, these deals are right in front of you. All you have to do is act on them. Driving for dollars is a great, cost effective method for finding new deals.
What Is Driving For Dollars?
As its name suggests, driving for dollars witnesses an investor drive around a specific neighborhood in search of potentially free leads.
Start off by putting a camera, notebook, binder and a few pens in your car. These are the tools that will help you remember the properties long after you see them. Pick an area of town that is either close to you or where you may want to invest. Drive around it and look at properties that appear to be vacant or abandoned. Overgrown grass, plywood on the windows, mail piling out of the mailbox and toys or other items all over the yard are just a few signs that the homeowner or renter has probably moved out. Take as many pictures as you can of each side of the house. It is also a good idea to take pictures of the street the property is on. This information will come in handy when you are intent on finding a real estate investment property.
After you have compiled a list of a few homes that look vacant, or generally unkempt, you are ready to market these properties. First, try sending either a standard letter or post card to the property address with “Attention Homeowner” as your header. If email is possible, try it. The most realistic option, however, is finding the address of the owner on record. You can do this at the local town hall’s clerk office. If they are paying taxes on the property, the address will be at town hall.
A simple letter stating that you are willing to buy their home with cash and in “as is” condition should be enough to get the conversation started. Just sending one letter and waiting for a response is not enough. Drive by the property once a week and see if there are any changes to the condition. Talk to the neighbors and ask if they know the owner or know how to get in touch with them. You have to be proactive and track down the owner before the home goes into foreclosure or before another investor does.
Once you finally get in touch with them, have a list of questions ready to fire off. Is there a mortgage on the property? What do they owe on it? How much do they think the property is worth? Can you see the interior? How quickly would they like to sell? If there is a current mortgage, you may be restricted on how low you can offer before it becomes a short sale. The more information you can find out from the owner on the initial conversation, the easier finding deals will be. It may be another few weeks before you get them back on the phone again.
Driving for dollars works if you are willing to put the time in and follow up on your leads. You never know where you are going to find your next deal. Sometimes it could be from behind your steering wheel.