Getting started in the real estate business might seem intimidating if you’re not sure where to begin, but the truth is there are many strategies to become a successful real estate investor. One traditional yet simple real estate technique to start making some cash is called driving for dollars.
According to the National Association of REALTORS®, about 5.34 million existing homes were sold in the U.S. in 2019 compared to just 4.34 million in 2009. With this growing demand in the last decade, there’s no doubt that you'll land a great real estate deal using the right approach.
Driving for dollars is an extremely effective method to make money and start investing in real estate. In fact, you most likely already have the items needed to start right now!
Buckle up and enjoy What Is Driving For Dollars: The Ultimate Guide because you’re in for a real treat. Use this menu to jump to your section of choice:
Driving for dollars is a real estate lead generation strategy where you simply drive around targeted neighborhoods looking for distressed or vacant properties. The goal of driving for dollars is to create a list of properties and turn them into amazingly profitable real estate deals. Investors will either fix and flip, buy and hold as a rental investment, or wholesale the deal to another buyer for fast cash.
Don’t have a car? With today’s technological advancements, you don’t even need to step out of your house to drive for dollars! Using Google Maps Street View and mobile apps like DealMachine, you can go driving for dollars without having to leave your house!
Yes! Anyone can go driving for dollars. However, you need to know what to look for when driving neighborhoods and how to effectively use direct marketing strategies.
Driving for dollars doesn’t have to be a one-person job. You can quickly build a team of “drivers” to help you look for distressed properties and bring you a list of leads.
You can play the role of a "scout" or "bird dog" and earn a fee for finding deals that result in closed real estate transactions. For example, you can charge a fixed amount for each distressed property address you find or even earn a percentage of the investor's profit when the real estate deal closes!
Driving for dollars takes up some time and energy but it doesn’t require a lot of skills. It’s one of the easiest methods to get started in the real estate investing world.
Wondering how driving for dollars works? Here's our Nine-Step Driving For Dollars Strategy that will help you land your first real estate deal:
It is crucial to pick a neighborhood that people want to live in. Some of the factors you should consider are:
Before you go driving for dollars, map out a route that allows you to reach every house in the targeted neighborhood. Following a pre-determined route helps you stay organized so you don’t accidentally miss any distressed properties or drive the same block twice.
Don’t have a car? The phrase “driving for dollars” does not necessarily mean you have to get in your car and drive. You can bike, walk, skate, or even rollerblade! The possibilities are endless!
Another efficient way is called virtually driving for dollars that will be explained later on!
Distressed properties are easy to identify once you’ve had some practice. There are easy ways to identify vacant properties and potential real estate deals.
Keep on reading to learn exactly what to look for when driving for dollars.
Make a list of these distressed properties as they come up to stay organized. This will come in handy when you start to skip trace and market to motivated sellers, which are property owners who are motivated to sell their property.
When you take pictures of the property, make sure it is a clear representation that the property is distressed and shows the house number. You may be using this photo when reaching out to property owners by your choice of communication.
You can make this step a breeze if you use a driving for dollars app to help you with the process. We'll review the best driving for apps later in the article.
After you have gathered a list of distressed properties, the next step is to skip trace the property addresses in order to obtain the property owner's contact information.
Use a free service like PeopleFinders to skip trace a property address.
Once you have the property owner's contact information (i.e. phone number, email address, or mailing address), you'll directly market to them by sending them direct mail, yellow letters, postcards, emails, phone calls, ringless voicemails, and other techniques.
Keep track of when you contacted the property owners so you can follow up with them in the near future. Many owners don’t reach out to you the first time around so prepare to contact them many times.
Don’t give up even if the property owner does not contact you after the first, second, or third attempt. Ideally, they will start to notice your messages and possibly become interested in selling the property. Stay consistent because you don’t want to let a potential real estate deal slip away!
Once you get talking with the motivated seller, have a price range in mind. Research the property valued in its current condition, determine it's after repair value (ARV), and estimate the repair cost. Ultimately, you want to pinpoint the best price for you and negotiate a deal with the motivated seller.
Congratulations - you have reached the final step of driving for dollars!
Once you and the motivated seller reach an agreement, the next step is to open escrow. It is crucial that you obtain a preliminary title report and check for any liens. After you have carefully reviewed the title report and everything checks out, you can finally purchase the property!
Whether you fix and flip, apply the BRRRR method, wholesale the deal to a cash buyer, or even decide to live in it yourself, it’s time to celebrate!
Before we get into what to look for when driving for dollars, let’s define what distressed properties are.
Distressed properties refer to real estate that hasn't been maintained in good condition due to the property owner being unable to afford it or because they do not care anymore.
When you drive for dollars, the target properties should stand out from other properties in the neighborhood. Below are the main qualities of a distressed property:
A great tip is to go on the day trash gets collected in that specific neighborhood. If the property has some of the qualities mentioned above and there isn’t a bin outside on trash day, the property is likely distressed.
If driving for dollars is something you’d like to do on the side during the weekend, that is the perfect time to do so!
People like to normally sleep in on the weekends, so go out early in the morning and check if there’s a car parked in the driveway. If qualities of a distressed property are present and there is no car in the driveway, then odds are you have found yourself a distressed property.
The plain simple truth is yes! Driving for dollars works very well for wholesaling real estate. Wholesaling real estate is just another exit strategy when you find a great real estate deal.
Instead of purchasing the property yourself during the final step, you'll either:
The trick is to stay persistent and to avoid getting discouraged during the driving for dollars wholesaling process. It might take a while to find distressed properties and close deals, but the tradeoff is well worth the time and effort you put in.
The process of driving for dollars has never been easier if you have a smartphone. Simply download a driving for dollars app on your mobile phone or tablet to get started.
Not sure which apps to download? Below are what we believe to be the Top 3 Best Apps for Driving For Dollars:
DealMachine is one of the leading apps for real estate investing. It's the all in one driving for dollars app you should download right away. It’s extremely easy to use and has all the basic features needed to get started on your real estate investment journey.
Some of the useful features in the app include automated property owner lookup, driving route tracking, skip tracing, direct mail campaigns, and real estate lead management.
DealMachine will help you save loads of time finding and marketing to distressed properties. In addition, you can build a team of bird dogs, people who find potential motivated sellers or distressed properties, and track their progress all under one account!
Landglide is a great mobile app to retrieve parcel data of a property. There is a wide range of information listed for each property that includes the property owner’s name and address, public records, sale price, acreage, and more.
With access to 150 million parcel records in over 3,000 counties, you're bound to find the information you’re looking for. Moreover, you can access data offline!
A quick snap of the property within the app Homesnap will provide basic information about the property value, lot boundaries, satellite imagery, and more. This free to use app saves and keeps track of all the potential distressed properties you find so you don’t have to!
The process of using these apps are all fairly self-explanatory. To make it even easier, here's a general guide of how to use driving for dollars app, specifically DealMachine:
Driving for dollars apps cost anywhere from free to several hundred dollars per month. Let’s compare the three best driving for dollars apps cost so you can determine which option is best for you.
Starting with the cheapest driving for dollars app, Homesnap will not make a dent in your wallet because it’s free to use! Although it does not give you as much information as DealMachine or Landglide, for its value Homesnap does the job.
Tip: Use a free GPS running tracker app like Map My Run by Under Armour alongside Homesnap so you can track your route and avoid missing any blocks.
If you’re willing to spend a little cash to make driving for dollars easier, consider using Landglide. After your seven-day free trial, Landglide will cost you $9.99 per month or $99.99 per year thereafter.
Last but not least is DealMachine. With its incredible features that make driving for dollars a breeze, we believe DealMachine is the app you should invest in. For the most basic plan which comes at $49 per month, you get access to unlimited property owner lookups, direct customizable postcards sent to the owner, option to share your account with another person, and much more.
The higher-tier plans with more features to scale your real estate business include the professional plan at $99 per month and the enterprise plan at $2,990 per year.
Here’s a pricing sheet with DealMachine vs. driving for dollars apps including what each one offers:
Not sure if DealMachine is the right driving for dollars app for you? DealMachine Offers A 7 Day Free Trial which is more than enough time to see if it’s the right app.
Yes, you can! Google Maps is a great interactive platform for virtual driving for dollars. By using the Street View feature in Google Maps, driving for dollars can be done and yield profits from the comfort of your own home (perfect amidst the coronavirus pandemic!).
The incredibly advanced Street View in Google Maps offers millions of high-quality panoramic images. You can “walk” the streets of your targeted neighborhood with clear views of houses and real estate images right on your screen. Simply ‘pin’ properties based on their physical observable condition.
Although the Street View does not offer real-time images of the property, the bottom right-hand corner of the screen shows when the image was captured. An image of the property that was taken closer to present-day will have a higher chance of it being distressed than one that was captured a couple of months ago.
For more, watch this tutorial on how to use Google Maps Street View:
Virtual driving for dollars is a virtual wholesaling method that uses online platforms such as Google Maps to look for distressed properties. This is easier and as effective as the traditional driving for dollars method.
DealMachine has a Virtual Driving For Dollars Chrome Extension that works with your account and is easy to use. The following is a virtual driving for dollars step by step process:
Here's a quick tutorial from David Lecko, Founder of DealMachine, on how to virtually drive for dollars using the DealMachine Chrome Extension:
After you've gathered a list of distressed properties, the next step is to skip trace the property addresses you found. Skip tracing will provide you with property owners' phone numbers, mailing addresses, and contact information so that you can send them mail, or otherwise get in touch and turn them into motivated sellers.
A website that provides free skip tracing and contact information on specific properties is Fast People Search. By filling out the information needed in the "Reverse Address Lookup" tab, you’ll be able to find the owner’s current home address, phone numbers, and other relevant data to get yourself connected.
Once you have found the necessary information to contact property owners, you will do one or more of the following:
Remember to follow up and reach out to the property owners again if you do not receive a response within 30 days.
A driving for dollars script is very important. Real estate investors use a script to effectively communicate and systemize building rapport with property owners.
The script is usually used when the investor and property owner first engage over the phone, though it can be used in person. The following is a driving for dollars script example that you are welcome to use:
“Hello, this is [name], a real estate investor. I am calling to discuss matters on your house, [property address]. I hope this is not a bad time, but I was in the neighborhood and saw that your property seemed vacant. Is there anyone currently residing there?"
[If no] "I would like to learn about your property and the efforts needed to maintain it. Just to reiterate, I am a real estate investor looking to make my next purchase and I believe we can reach a deal that can greatly benefit you. Would you be interested to discuss how you can sell your house quickly and for top dollar just a few days?" [listen and continue]
If you're new to sales, here's a video on how to sound confident on the phone:
The key takeaways from the conversation:
Remember to confirm the motivated seller’s best contact information for easy outreach. This includes their first and last name, phone number, and email address. Let them know that they can expect to hear back from you in 24-48 hours with an offer after you communicate with your team.
Driving for dollars has been proven to be a successful method by countless real estate agents and investors. It is one of the best ways to create a highly targeted list of distressed properties in a specific neighborhood.
Your driving for dollars success rate depends on the effectiveness of your marketing strategies. The key to a high success rate is all about the marketing and sales process after the list is built.
If your direct outreach response rate is above 5%, then you'll be in good shape. Getting a motivated seller on the phone is half of the battle, the other half is agreeing on a deal that makes sense for both sides.
Ask yourself, how much effort are you willing to put in? The saying “what you put in is what you get out” is extremely relevant when driving for dollars because reaching the final step, closing the real estate deal, takes perseverance.
All in all, driving for dollars can take a lot of time, money, and effort to be successful at it. There are other strategies you can use to find more real estate deals in less time.
Here's a quick overview of the benefits of driving for dollars:
Driving for dollars is a cost-effective real estate strategy to generate leads. Using the old fashioned method by literally driving for dollars, all you’re trading off to find a distressed property is time and gas.
Virtually driving for dollars is even more beneficial if you are low on time and money. Driving for dollars apps help save time, the Street View feature on Google Maps doesn’t require you to pay a dime, and best of all, you can do all this at home if any shelter-in-place restrictions are in effect.
Don’t forget that when you’re driving for dollars, you’re looking for distressed properties that in turn can become off-market deals for yourself or real estate investors. The great thing about off-market properties is low competition for these hidden gems so they are normally sold below fair market value.
As mentioned before, anyone is capable of driving for dollars. Just remember to follow our Nine-Step Driving For Dollars Strategy and refer back to this Ultimate Guide when needed!
While it may seem like a long process, driving for dollars has never been made easier.
After you have your list of distressed properties, the right real estate marketing tactics will lead you to some hard-earned cash. With the many resources available at your fingertips, there’s no excuse as to why you can’t start right now!
Driving for dollars allows you to find off-market properties and obtain amazingly great deals from motivated sellers. This method is straightforward and affordable.
The success others have had using this strategy is proof that driving for dollars can certainly help you achieve your goals and allow you to become a successful real estate investor.
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