How to Do Deals Using The “Driving for Dollars” Strategy
– Part One –
This is the first of a four-part Course
….Driving for Dollars is a powerful real estate investing strategy that anyone can master. All you need is a car, a smartphone, and a few hours of your time. With this strategy, you have the opportunity to uncover great deals no matter what your budget may be. You can use it anytime, and even outsource the task to other people, giving you more time to focus on finding the best deals and making the most profit. Get ready to learn the secrets of driving for dollars so you can start using this strategy to make some profits from real estate investments, starting today!
Everyone knows that wholesaling real estate is a great way to get started in this business without having to use any money. And even after you’ve been successfully investing for a while, this should still be a strategy you always incorporate in your business for many reasons. One of the fastest, easiest, cheapest, and most effective ways to find properties to wholesale is through the technique of “Driving For Dollars.”
But did you know that you can also use this method for doing Pretty House deals, too?
In Part One of this training article, I’ll introduce exactly what Driving for Dollars is, give you a step-by-step approach overview, and show you how to get started doing it. We’ll get to a lot more of what you need for this strategy in the ensuing parts.
Rest assured, when we’re all done, you’ll know what you need to do, top to bottom, and I’ll even include some special “Tony Tips” for making the most of this strategy. 😎
Look at it this way: We’ll start with the BIG picture in this first part, then chisel it down to the smaller parts in the next few articles. Sound good?
Of course, I’ll still do what I always do: Share some super sweet secrets and give you a few awesome takeaways for you to use immediately! So here we go…
What is “Driving for Dollars?
“Driving For Dollars (or “DFD” for short) is a technique usually used by real estate investors to find properties that are in need of repairs or are vacant. The idea is to drive around neighborhoods, looking for properties that are in distress, such as homes with boarded-up windows, overgrown lawns, or broken fences. These properties are often good candidates for wholesale deals, because the owners may be motivated to sell quickly. Of course, since we’re also in the business of Creative Real Estate, aka “Terms,” we can also use this technique to find Pretty Houses. Keep reading…
Quick DFD Overview
Here’s a Step-by-Step Overview Guide on How To Properly Use This Technique:
- Start by identifying the neighborhoods you want to focus on.
TIP: Look for areas with a high concentration of older homes, as these are more likely to need repairs. - Make a list of what you’re looking for when driving around. This could include things like boarded-up windows, overgrown lawns, and broken fences. The uglier, the better!
TIP: Program your brain to look for what you want. (More on that later) - Once you have your list, start driving around the neighborhoods you’ve identified. Make note of any properties that match your criteria. (Details of how that’s done are shared below)
- When you find a property that meets your criteria, STOP! Get out and take note of the address and any other relevant information. You’ll also want to take pictures of the property to help you remember it later.
I’ll share my tips with you in a moment. - After you’ve finished driving around, review your list of properties and prioritize them based on their potential as a possible deal.
- When you get home, find out who the owners of these properties are. I’ll show you how.
- Skip trace the owners so you can contact them.
- Contact them to have a conversation and make an offer.
- Get the properties under contract to purchase.
- Immediately check the title and market the contract or property in order to…
- Find a Cash Buyer (wholesale deals).
- Assign the contract or double close (wholesale deals).
- Get Paid!
- Rinse & repeat.
- PRO TIP: Hire someone to do this FOR you. BETTER: Hire as many people as you can. Pay them per lead with incentives on the deals you close that they brought you. I’ll be writing a training article about this technique soon & post the link here.
Ok! Now that you know the big picture “flow” of what’s needed to use this technique, let me now show you…
Where to Go: What Areas To Drive
It’s vitally important to pick the right areas to drive when using this strategy. You could drive anywhere, because there are always houses that may fit the profile of what you’re looking for in any neighborhood. But let’s face it – some places have a higher target rich environment than others. Choose the wrong area, and you’ll be wasting a lot of time (and gas) trying to find that needle in the haystack. But choose the right area, and you’ll be doing deals for a while!
I remember when I first started using this strategy in my early days of real estate investing. I found deals everywhere I went, because I chose the right areas and programmed my brain to find what I was looking for (more on that soon). At the time, I was living & mainly investing right in my own back yard of Prince George’s County, MD. When I started getting some leads in Baltimore City, MD, I thought I should start looking around that city to see what I could find. My jaw dropped the first time I looked around there, because there were boarded up houses all over the place (sometimes right next to blocks of nicer properties). There were also drug deals going on in broad daylight, crap all over the place, and so many houses that needed work. This is what is called a “War Zone.”
Although there certainly is money to be made in War Zones, those are generally places you want to stay away from until you have a firm grasp of things and some valuable life experience under your belt.
Nonetheless, I did wind up doing quite a few deals there, and somehow managed to not get shot or stabbed! 🙂
I spent some time growing up on the streets, so I never had a problem there with anyone.
But let’s talk about where you should focus. If you’re just starting out, why not just drive around your local neighborhood? Unless you live in a gated community or the heart of the city, you might find some target properties right where you live! If you do live in a gated community, good for you! But you’ll most likely need to descend from your ivory tower and get out to the REAL target markets for these properties…
Blue Collar “Working Man” Neighborhoods! That’s where you’ll usually find the best (and most) deals for this strategy.
What To Look For…
But before you even get in your car to start your driving tour, it’s important to know exactly WHAT the heck you’re looking for! In order to know that, we need to remember that we’re looking for OPPORTUNITIES. And as I’ve written before, opportunity often comes disguised in something ugly. Or stinky. Or nasty. You get the idea. In other words…
You’re looking for UGLY Houses! And what do ugly houses look like? First off, they’re VERY easy to identify. They typically have things like… Well, how about I just make you a nice, handy LIST?
Quick List of What To Look For:
- Long, overgrown grass;
- Broken or boarded up windows;
- Collapsed or decaying roof;
- Crap on the yard that doesn’t belong there;
- Obvious signs of damage (fire, water, storm, etc.);
- Nothing on the windows (no blinds/curtains, etc.);
- Fences in really bad shape/gaps in fence;
- Houses that really need painting;
- Here’s a big one: Code Violation or Water cutoff or Eviction notices on the door;
- Vacant houses;
- …and other indications of neglect.
There are MANY reasons why these properties are like that, and I’ve dealt with most of them (and have the stories to tell). These could include: The owner(s) died, and no one has taken care of the house; The owner(s) moved away and gave up on the house; The owner(s) had a serious health issue (stroke, heart attack, bad accident, etc.) and are no longer able to take care of the house, etc.; Kids or heirs have inherited an unwanted house, and are just too busy living their lives to deal with this situation, so they’ve just let it go, etc.
Your first job is to TARGET and FIND these properties, then note the address. I’ll show you what to do after that. For now, let me show you something really cool…
Secret Hack: How to Program Your Brain
Your brain is an amazing thing! We could talk for days about this, but for now, let me introduce you to something that will be your best friend when using this DFD strategy. It’s a super special part of your brain called the Reticular Activation System (“RAS” for short). Maybe you’ve heard of it. Check this out…
Every day, our senses are bombarded by thousands & thousands of messages (especially marketing messages). We see so much. We hear so much. If you had to stop and think about everything you see and do every day… if you didn’t have a way of systematically and automatically processing so much information, you’d barely get anything done because your mental bandwidth would be so overwhelmed!
So that’s what this “RAS” part of the brain does. This is the part of your brain that recognizes patterns in what you experience. It recognizes patterns and helps prevent you from getting overwhelmed by everything you see, hear, feel, taste, and touch.
The easiest & most common example can be found with your car (or whatever you drive). If you drive a black Mercedes E320 (my last car), you’ll easily notice all the other black Mercedes E320s there are on the road. You don’t really notice the white Toyota Avalons that are on the road…until the day YOU buy one (like I did). Then, you see them all over the place, and wonder where the hell they all came from! You know exactly what I mean.
That’s how the Reticular Activation System (RAS) works.
….And we’re going to use that to your advantage! Here’s how:
Before you get in your car and venture out of your home, take a moment to “see” what you want to see: Focus your brain to LOOK FOR UGLY houses that include any/all of these symptoms: Long grass/nasty lawns, boarded-up windows, dilapidated roof, or anything from the list I had previously provided earlier in this training article.
Seriously: DO THIS, because IT WORKS! This is how you “Program” your brain for success. I could tell you story after story, both personally from my own experience, and from the plethora of successful students I’ve coached or mentored over the years. We’ll all tell you that we now have a “6th sense” of just knowing when there’s plywood on a window within a quarter mile of where we are. We’ll tell you how our vehicles just seem to know what street to turn down to “magically” find that target nasty property. We’ll tell you of this magic, newfound “radar” that just pings whenever there’s an ugly house nearby.
Do this, and it won’t be long before you’ll be telling me the same thing. 🙂
Now that you know the WHERE and WHAT you’re looking for, let’s talk about the next thing you need to know…
How To Take PICTURES of These Properties
As soon as you see a property that fits the description, you’ll need to slam on the brakes and get out of the car to take a few pictures so that you know what you’re dealing with and can do some research later. To be the most productive, here’s how I’ve always done it, and how you should do it, too..
Take those house pictures in this order:
1. The Address of the house (with the number on it),
2. The Street Name (to associate with the address),
3. The FRONT of the house,
4. The SIDE of the house,
5. The Street view.
Then record the address (write it down or use technology), get back in your car, and go about your way. Easy!
I personally like to do it this way, because it reminds me of what I need to know, in the order I need to know it, so that I can easily reference everything later. I do it in this order because it shows me the house address, then the house, then the neighborhood. Then I move on to the next one to do it all over again. At the end of the day, they’re all there in order. So simple!
Of course, after you get yourself organized, you can do it anyway you want to do it. And if you’re using one of the electronic means of organization I’ll show you later, it won’t matter much because that will organize everything for you.
Just remember, I’m old school, so I started off before any of this fancy electronic app crap was around!
But I do like to use apps to stay organized now lol.
Speaking of getting organized, here’s…
How To Organize Yourself When Driving For Dollars
There are several ways you can keep yourself organized when you’re using this strategy. I’ll keep it simple and boil it down to TWO main ways: WITH Technology and WITHOUT.
WITHOUT Tech: If you’re old-school or just don’t like/want to use technology, you can simply ride around with a pad of paper & a good pen, along with your smartphone, of course. When you see a target property (Pretty or Ugly), just stop, get out, and write down the address on your pad of paper. You should also write a quick description of the house & what you see so that you can easily remember it later.
Of course, you’ll definitely still want to take those pictures in the order I described above.
WITH Tech: You can get yourself an app on your smartphone (or tablet, if you’re super-fancy).
There are some free ones and some paid ones. I know them all, and was almost going to share them in this first part of the article, but I just recognized that this is getting way too long. So… sorry, but you’ll have to wait until a later part of this article when I share my super sweet special tips for this stuff. Hey, I can’t give you all my secrets at once! 🙂
But we can wrap up Part 1 with these…
Tips for Making the Most of “Driving for Dollars” (Part 1)
- Be persistent: “Driving for Dollars” can be time-consuming, so it’s important to be persistent in your efforts. Set aside a specific time each week to go out and drive around.
- Be strategic: Focus on neighborhoods with a high concentration of older homes, as these are more likely to need repairs.
- Be organized. Don’t just fly (or drive) by the seat of your pants. Keep track of your potential leads, how they develop, who you made offers to (covered later), and who you need to follow up with and when.
And In Conclusion (for now)…
Hey, I really hope you like what you’re learning here so far! You’re off to a GREAT start. You’ve learned WHAT Driving For Dollars is, why it’s so useful, and HOW you can get started today with a few simple starting strategies. Shoot, I even sprinkled in a super secret brain hack you can use for the rest of your life!
But we ain’t done yet! In fact, we have SO much more to cover! Here’s what’s coming up:
In Part 2 of this training, you’ll learn HOW to find out WHO owns these houses you’ve found. Then you’ll learn how to get their contact information, as well as the different ways you can contact them.
In Part 3, I’ll show you HOW to contact them with each of those ways, what to say, and how to make those offers!
Finally, in Part 4, we’ll recap everything. I’ll share some special tips to make it so easy. I’ll show you how to get others to do this for you. I’ll even give you a BONUS method of how to use this for PRETTY houses!
So stay tuned and be sure to check out that next part as soon as it’s ready!
See you in Part 2,
Tony Pearl