The number one way to build a highly targeted list of distressed properties, in only the areas that you want to focus on, is Driving For Dollars.
Driving for Dollars is a method of locating distressed homes in neighborhoods/areas that you are interested in buying in.
This is not a new method of finding deals, by any means. This is a tried and true method.
Some real estate investing educators feel that this is a strategy that only newbies should implement. I highly disagree.
There are many very successful real estate investors that still use this method in their businesses each and every week. Whether they are the ones driving the neighborhoods or their employees, the method is still used and highly effective.
First Step- Identify Your Target Area
If you are looking to wholesale the homes you find, choose an area that you know your cash buyers are buying properties in already.
The average age of the homes in the areas should be greater than 20 years for the best results.
20 years is a good amount of time for a home to start showing a wear and tear.
Next, map out the area you are going to drive. Google Maps (googlemaps.com) is a good tool to help with this process.
Bring a notepad and pen with you to write down addresses & any notes.
A tip to make the process more efficient while in the field is to write down the street names that you will be driving before you leave your office.
Leave spacing under each street name for the address number.
Now, rather than writing down the street name for each house, you just need to write the number under the column you have for the street name.
Record the numbers of all distressed properties that you come across.
What To Look For
When you are driving for dollars you want to look for any signs of physical distress showing on a property.
Look for overgrown weeds and other vegetation in yards.
Boarded up windows is a good sign that the home is vacant. These can be very lucrative.
Look for a pile of newspapers in the driveway. This is often another sign that the home is vacant.
Other things to look for are old dilapidated roofs, worn and chipping exterior paint, many non-operable cars on the lawn and driveway and also mail boxes overflowing with mail.
The Best Times To Drive For Dollars
The best time to drive for dollars is between 10am and 2pm on weekdays. This is normally when most people are working.
A great way to locate vacant homes is to find out what days the trash is picked up in your target neighborhoods. You want to drive neighborhoods on these days, in the morning, and look for homes that didn’t put the trash out.
While some people may forget to put the trash cans out, you should still pay close attention to the houses with no trash cans out. You will stumble upon many vacant properties this way.
Scrub Your List
The greatest part about the driving for dollars method is you are creating a highly targeted list of houses to market to.
Think about it…
-You care choosing the exact areas to drive.
-You are choosing only the houses you believe would be great for your cash buyers.
-Every house that you choose needs work.
The next step is to scrub your list to make it even more of a targeted list.
Look up every property that you found and omit any that do not meet your buying criteria such as ones with:
-Little or no equity
-Upside down properties
-Purchased within the last few years
and also corporate or bank owned properties.
You can add other criteria to omit even further.
Example- If you know your buyers only want 2 or more bedrooms with over 1,000 square feet, you may want to omit the single bedroom homes with under 1000 square feet.
Create A Direct Mail Campaign
Keep all of the addresses you find and the owners mailing address’ in a spreadsheet.
The next step is to create a direct mail campaign to mail to the owners of these properties.
If you are a real go-getter and have enough courage, you can get much faster results by knocking on the doors of these homes and speaking directly to the owners if owner occupied.
See if they are interested in selling.
It is always good to leave them with something in hand whether a business card or flyer.
The best times to knock on doors is weekdays between 5pm and 7pm but only if it is still light outside. You can also go on weekend mornings between 9am and 12pm.
Learn Then Delegate
I can’t stress enough how important this method is for locating distressed properties in your target areas.
If you are just starting out it is best that you get out there and drive these neighborhoods yourself.
Learn this method so that when you have a solid pipeline of deals coming in each month you can later teach/delegate it to an employee.
Whether you are a complete novice or veteran real estate investor, Driving For Dollars should be a method that is implemented in your business for locating highly profitable deals.
If this article was of help to you, please share it with others who may benefit as well.
Here’s to your success!