Driving for dollars is a real estate investing strategy that involves physically driving through neighborhoods in search of distressed or undervalued properties. These properties can be great opportunities for investors to purchase and either fix and flip or hold as a rental property. Here are some tips on how to effectively drive for dollars:
Research the neighborhoods you want to target: Before you start driving, it's important to have a good understanding of the neighborhoods you want to focus on. Look for areas with a high concentration of older homes, as these are more likely to be distressed or undervalued. You can also use online tools like Zillow to find neighborhoods with a high number of homes for sale or recently sold. You can also stay local and drive untraveled routes in your own neighborhood and then expand your radius!
Look for signs of distress: As you drive through neighborhoods, keep an eye out for properties that show signs of neglect or disrepair. These can include overgrown lawns, broken windows, or missing roof tiles. These properties are more likely to be undervalued and may present a good opportunity for you to purchase.
Take note of potential properties: As you drive through neighborhoods, make note of any properties that catch your eye. You can use a notepad or a smartphone app to take photos and make notes about the property. Be sure to also note the address, so you can easily reference it later.
Follow up on potential properties: Once you've finished driving, go back through your notes and research the properties you've identified. You can use online tools like Zillow or Redfin to find out more information about the property, including the price, size, and any recent sales.
Contact the owner: Once you've found a property that you're interested in, reach out to the owner to see if they're interested in selling. You can do this by sending a letter, making a phone call, or even knocking on their door (if you feel comfortable and proceed with caution and discretion!)
Negotiate a deal: If the owner is interested in selling, you'll need to negotiate a deal. Be prepared to make a fair offer that takes into account the condition of the property and any repairs that will be needed.
Close the deal: Once you've negotiated a deal, work with a real estate attorney to close the transaction.
By following these tips and being persistent, you will be able to find many potential properties through driving for dollars. It is a great strategy for finding undervalued properties that can be a great investment. Remember, investing in real estate is always a risk, so be sure to do your due diligence and research the properties thoroughly before making an offer. Software such as DealMachine can help in the hunt for you next deal!