Driving for dollars is a term that real estate investors use to describe a technique for finding great deals on houses. You drive around until you find a house that looks vacant or distressed and then attempt to buy that home from the owners. Driving around looking for houses is simple, but the process of buying the home can be very complicated. It is not easy to find the owners of a vacant house. If the house is bank owned it is virtually impossible to buy it and many owners do not want to be bothered.
How does driving for dollars work?
There are a few ways to drive for dollars and I use a couple of techniques myself. The first is to target a specific neighborhood where you want to buy houses. We’ve targeted neighborhoods where we own rentals and that typically have great rent to value ratios. We do not like to buy the cheapest houses for our rentals, but the more expensive houses are, the less cash flow they usually have. Our rentals tend to be valued just below the median sales price in our area.
We used to find abandoned or foreclosed houses, and reach out to their owners with a cash offer to purchase the house. We did this multiple times where we’d spend an hours driving neighborhoods and take 20-25 pictures of houses each trip.
Then we would spend 10+ hours cross-checking homes with Google Maps and County property records just to find the current owners names. Next we were printing, stuffing envelopes, and running to the post office. Our goal was to send letters of interest in purchasing the owner’s house, personalized with a high quality picture of the house to grab the owner’s attention.
Our problem was the more we drove, the more houses we needed to look up, and we kept putting off printing and mailing our letters. The effort to find these deals was quickly becoming 10 times more difficult and time consuming than we’d ever imagined, and it made it difficult to continue looking for deals without a bunch of spare time.
We found a great solution! We now use a phone app named DealMachine.
Check out DealMachine, a new app for investors & agents to get in touch with property owners. Get $5 of direct mail credit w/ promo: QBJPFD for a $ 5.00 credit towards sending mailers.
All you do is snap a picture of the house on the spot, verify the address, and DealMachine finds the owner’s name, contact address, and sends a letter with a picture of the house to them expressing interest in doing a deal for their property.