How do I use Driving for Dollars to Find Motivated Sellers?
Driving for Dollars: How to Find Distressed Property Leads
What is driving for dollars in real estate and how does it work? More importantly, how can you use it to find distressed property leads or off-market deals? Find out here!
If you have been in real estate investing for any amount of time, you have surely heard others talk about how they found their next deal with Driving for Dollars.
Searching for motivated sellers is arguably the most challenging part of real estate investing, even for many real estate investors who have been finding real estate deals longterm.
What is Driving for Dollars?
Driving for Dollars means exactly what it sounds like: driving around a neighborhood looking for distressed properties, potentially vacant properties, or other investment properties that you could wholesale for a profit.
Driving for dollars is one of the most powerful and inexpensive marketing channels that real estate wholesalers use, especially those just getting started in the business.
Why? Because it’s one of the most effective ways to look for distressed properties or off market properties.
How do I get started with Driving for Dollars?
We have put together a comprehensive six step guide on driving for dollars to help you get your next real estate deal. Let’s get started.
1. Pick a Target Area
Now that you know what driving for dollars is, the first step for you is to figure out your target area to look for your next investment property.
Use these criteria to pick your target area for driving for dollars:
- Safety – you feel safe driving around in the area
- Home Prices – targeted neighborhoods with median home prices for the area
- Real Estate Investor Activity – popular area to invest in for any local real estate investor
Pro Tip: Driving for Dollars is a great way to learn more about a specific neighborhood and become an expert.
2. Planning for Your Drive
After you have picked your target area to drive, you want to prepare for your drive.
Some things to consider for your planning:
- Notepad – to write down addresses of the properties
- Smartphone or camera – to take exterior pictures
- Timing – Best time is weekdays between 10 AM and 4 PM
Between 10 AM and 4 PM most people will be at work and you will not have people wondering why you are taking pictures of their house.
Also, you want to drive at a time when there is plenty of daylight to assess the condition of the property.
3. Look for Signs of Distress or Neglect
Take your time and drive slowly, but safely, through your target area looking for signs that indicate a lack of pride in ownership, property distress, or potential vacancy.
Look for these signs of distress when driving for dollars:
- Roofs with holes or tarps
- Broken or boarded windows
- Busted shutters or torn blinds
- Signs of hoarding
- Overgrown lawns or shrubbery
- Stuffed mailboxes or newspaper piles
- Notices on doors or windows
- Peeling paint
- Fire damage
- Window units
- Parked cars in the yard
- Cracks in the foundation
- Sandbags or signs of flooding
An AC unit in the main window of a house could indicate an owner who can’t afford major repairs. Spotting multiple different satellite dishes on one building could help you uncover rental properties.
If you are unsure whether it is a distressed property or not, be on the conservative side and note down property address and other relevant information for the property.
It’s better to start with a broad list of properties and then narrow that list down based on research you do for the property and owner.
Pro Tip: Look for seasonal clues like unshovelled snow or missing holiday decorations as well.
4. Note Down Property Addresses and Take Pictures
It’s time to start building your list of motivated sellers from Driving for Dollars that you can market to later on.
For any distressed property you find, you want to get the following information:
- Complete property address
- Exterior pictures of the property
- Anything noteworthy about the property – loud music coming from the house, code violation notice on the door, etc.
Pro Tip: once you have completed your first Drive for Dollars, write down the time of the day you started and time you ended your drive. Also, note the number of properties you identified during the drive.
This information will help you see over time how each of your drives have gone.
5. Research the properties in your Driving for Dollars list
The next thing you want to do after you have built your Driving for Dollars list is to search property records (often available within public records) for property and ownership information.
You want to go to your local county’s assessors and recorders website and find more information about the property and the property owner.
The information you want to look up is:
- Owner name
- Owner’s mailing address (if different from property address)
- Previous sale price
- Previous sale date
- Ownership type – individual, LLC or trust
- Tax or public records
Based on the information you researched, remove any properties that don’t meet your criteria like:
- Low equity
- Bank owned
- Properties only sold in last year or so
Pro Tip: A homeowner who bought his property in the last year or two will likely be less motivated to sell than someone who has owned the property for 5-7 years or longer.
6. Contact the property owner
After you have shortlisted the properties that meet your criteria, the next step is to start marketing to those specific properties’ owners.
You can choose from one of the following marketing channels to contact the property owner:
- Cold Calling
- Direct Mail
- Door Knocking
- Door Hanger
Pros and Cons of Different Marketing Channels
SMS and Cold Calling
- Turn off for most people to receive a cold text or call
- Risk of getting sued for not being TCPA compliant
- Tangible format
- Targeted marketing
- Relatively more expensive
- Response rate can be lower
Door Knocking and Door Hangers
- Potentially build a great rapport
- Not applicable for vacant properties
- Time consuming
How do I find a property owner’s phone number to send SMS or call them?
In order to contact a property owner by sending a SMS or calling them, you will need to look up the property owner’s phone number. You can do that by using a service like Whitepages, Been Verified, etc.
Most successful real estate investors or real estate business owners use Skip Tracing services to easily look up the property owner’s phone number, email addresses, etc.
What is Skip Tracing?
For real estate investors, Skip Tracing is a process of tracing a person’s contact information based on their name and property address.
REsimpli has a built-in Skip Tracing platform that you can use to easily find out property owner’s contact information.
Pro Tip: when sending Direct Mail, you want to make sure you send the postcard or letter to their mailing address and not the property’s address, which can be different.
What is Virtual Driving for Dollars?
Virtual Driving for Dollars is essentially the same as driving around a neighborhood looking for distressed properties but instead of actually driving, you are browsing around the neighborhood using Google and using Street View images of a property to assess the condition of a property.
Is Virtual Driving for Dollars effective?
While it’s convenient to do Virtual Driving for Dollars from the comfort of your home, the downside is that you are relying on Google Street View images which can be a few years old to assess the condition of the property.
Based on Google Street View image, you might notice some signs of distress like tarp on the roof but if the image is 2 years old, then you are not sure whether the property is still in distress or not.
So what’s the best way to manage my Driving for Dollars?
There are few Driving for Dollars Apps available for you to make the process of Driving for Dollars an effective and efficient marketing source.
REsimpli has built-in Driving for Dollars features that cover the entire process, all in one place — the driving for dollars app. The great thing about REsimpli Driving for Dollar app is that it’s fully integrated with List Stacking within REsimpli.
Now, all REsimpli plans include Driving for Dollars and List Stacking.
Here’s a quick video on how Driving for Dollars works in REsimpli:
Benefits of using a Driving for Dollars app like REsimpli
As we went through the Complete Six Step Guide to Driving for Dollars, you can realize that while Driving for Dollars can be a very effective and inexpensive way to get your next wholesale deal, doing it at scale can get very inefficient.
That’s where Driving for Dollars Apps like REsimpli come in and can simplify your life.
With REsimpli Driving for Dollars app, you can do all of the following steps within the REsimpli app with just a few taps and keep everything organized.
- Look up complete property and owner information
- Saved driving and property history
- Add property images
- Skip Trace within app
- Send postcard with property image from within app
- Fully integrated with REsimpli List Stacking and CRM
1. Look up complete property and owner information
Just by one simple tap on your smartphone with REsimpli app, you can look up complete property information like:
- Owner’s name
- Bedrooms, Bathrooms, Sq Ft., etc.
- Estimated Value
- Last Sale Date
- Last Sale Price
2. Saved driving and property history
With the REsimpli app, you have a complete history of all the drives you have completed and properties you added during each drive.
3. Add property images
REsimpli Driving for Dollars app is fully integrated with Google Maps so you can add Google Street View image without even pulling over and taking picture of the property.
You also have the option of adding a different image of the property if you don’t prefer to use Google Street View image.
4. Skip Trace within the REsimpli app
Skip Tracing is built right within REsimpli app for you to look up property owners phone number and email address by simple tap on your phone.
5. Send postcard with property image from within the app
In addition to Skip Tracing within the REsimpli app, you can also send a postcard to the property owners with a picture of the property in the postcard.
6. Fully integrated with REsimpli List Stacking and CRM
One of the most powerful features of REsimpli Driving for Dollars app is that it is fully integrated with REsimpli List Stacking and REsimpli CRM.
As you can see from the image below, while you are Driving for Dollars using REsimpli app, you find out instantly:
- Whether or not the property is already in List Stacking
- Is the property already a lead that you might be working on
- Whether or not the property is vacant per USPS
- Have you already done any marketing to this property
Having the above information helps you build a super targeted marketing list and saves you marketing dollars by not marketing to anyone that’s already a lead or someone you have already marketed to.
As you can see, Driving for Dollars is a great way to find distressed property leads that often end up being a vacant bank owned home, and the gateway to your next investment opportunities.
At a minimum, get into the habit of looking for distressed properties while running errands, going out for walks, walking your dog, etc. You will soon have a targeted list of motivated sellers to market to.
To make Driving for Dollars efficient, consider using a Driving for Dollars app. Using an app gives you a huge competitive edge over other real estate investors in your market that are trying to get their next wholesale deal using the traditional and inefficient way of Driving for Dollars.
Using REsimpli Driving for Dollars app that’s fully integrated with REsimpli List Stacking and REsimpli CRM helps you build a super targeted marketing list and stretch your marketing dollars to reach more motivated sellers.
All REsimpli plans include Driving for Dollars and List Stacking. If you’d like to learn more about REsimpli and its services, contact us for a demo.