What Is “Driving for Dollars” and How Does It Work?

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When it comes to the subject of finding motivated sellers, we can ALL benefit from finding new ways to do business.

If you’re familiar with this blog – you probably know we prefer things like direct mail and internet marketing to find motivated sellers and while these methods can do a phenomenal job of reaching the masses – they offer significantly less control in terms of pursuing specific properties that you might have your eye on.

Given this, I wanted to show you an alternative strategy for finding motivated sellers that requires a lot less money, in case you happen to be on a shoestring budget.

Driving for Dollars: A Brief Overview

When a real estate investor is “driving for dollars”, this is the act of driving through a targeted neighborhood and taking note of specific properties that appear to be distressed and/or abandoned.

Once these leads have been discovered, your goal is to reach out to these property owners in an effort to find new investment opportunities.

This strategy can be useful whether you are looking to flip, buy and hold, wholesale or even “bird dog” for other real estate buyers. It works particularly well if your marketing budget is limited… because it doesn’t require you to spend hundreds or thousands on direct mail or other forms of paid advertising.

The more properties you’re able to find and target, the higher your chances will be of finding a great deal.

A Goldmine Waiting To Be Tapped

As real estate investors, we are looking for both equity and motivation in every potential deal, because both of these things are necessary components to structure a traditional deal in real estate.

One of the problems with direct mail (aside from the cost) is the fact that many real estate investors in some markets can find themselves trying to contact to the same lists of property owners. This can lead to over-saturation in the market, a lower response rate, increased competition and ultimately, it results in fewer deals and lower profits for YOU.

As a general rule of thumb, the more work you have to do to obtain a lead, the less competition there will be for you in the end (and in turn, this can result in some potentially larger profit margins). This is one of the key reasons why driving for dollars is a great way to generate quality leads with little competition.

One of the strongest benefits of driving for dollars is that it can give you the ability to find “red flags” that may potentially indicate a motivation seller. For example, vacant and distressed property is a clear and visible “red flag”, which means there may be a higher likelihood of motivation to sell at a discount – but it is critical that you continue to send them mail throughout the year. This is necessary because time and circumstances change over time and you are waiting for this potential seller to have a trigger event that causes them to pick up the phone and call you.

There are very few drawbacks to this method – since it only requires a nominal amount of money upfront (a few envelopes, letters and stamps, and maybe an inexpensive subscription to a data service like DataTree and/or an app like DealMachine).

Probably the most significant downside is the TIME required to find these properties. If you don’t have much time, this probably isn’t the right strategy for you.

However, if you are short on cash for a marketing budget, you can start building your lead generation engine by spending as much TIME as you can driving for dollars. Even if you are seasoned and your marketing budget is not bootstrapped, this is still a great strategy to implement since this can be done before or after an appointment. The leads that you can acquire through driving for dollars typically have both EQUITY (after you research) and MOTIVATION.

Driving for Dollars in Action

Driving for dollars is simple to do. All you will need is a camera/phone and a notepad to jot down addresses.

When you are spending the day driving for dollars, there are some key factors to look for, such as:

  • Differences in grass between yards
  • Mailboxes with no doors on them, and no mail inside
  • Newspapers piled up on the front porch
  • Obvious code violations on the house
  • Boarded up and/or broken windows
  • No realtor or bank-owned property signs in the yard

If the neighboring properties are even halfway maintained, the unkempt yards and properties will stick out like a sore thumb.

When you come across a property that exhibits these features, jot down the address. Drive as many or few subdivisions as you’d like – just make sure the subdivision you drive suits your needs. For instance, if you are looking to make high equity plays, it probably doesn’t make sense to drive through a subdivision that was built in 2010.

When you are finished proceed to the next step.

Research

Once you’ve jotted down the addresses of several properties you’d like to pursue, it’s time to go through these addresses, one-by-one and examine them on your local appraisal district website or with a service like DataTree.

You want to make certain the property is NOT bank owned (you should be able to find the name of the individual(s) or entity that own the property). If the property happens to be bank owned, scratch it off your list.

In addition, verify that the property has equity of some sort. You can do this by checking with a service like DataTree to see if there are any outstanding mortgages or liens on the property. I like to keep it simple – if the property was last transferred 10+ years ago, the property owner probably has a fair amount of equity to play with (even if there is an existing mortgage). I will keep it and mail to them.

Market

Now that we have refined our list, it’s time to compile it and keep track of it.

Again – I like to keep things simple, so a basic excel file will do just fine. At this point, it’s up to you on how you would like to begin marketing. Some investors prefer yellow letters, some like postcards. However, a trick that works great for me is as follows…

Remember how I told you to take pictures of these houses? Utilize this in your letter and print out an image of the house in the body of the letter. Many times these properties are absentee-owned, which means that the owner does not occupy the property or use it as their personal residence. Sometimes the last time the property owner saw their property was 5+ years ago. Sending them a picture will paint a fresh picture of just how bad of shape the property is in and will drive home the point that their house needs to be sold at a discount.

You can also print out a small thumbnail image on the upper left quadrant of the envelope. I have found this to really help increase my response rate.

As I explain in this blog post and video review, DealMachine is a paid mobile app that was designed precisely for this purpose. You can take a picture, look up the property owner’s contact information and start sending them mail just like this – all from your phone. If you’re serious about driving for dollars and you need a way to streamline this process,

Now What?

To succeed at this technique long-term, you need to work your leads, follow up with people, and if you haven’t received the response you were hoping for, don’t give up!

A common practice in driving for dollars is to continually market to these property owners throughout the year. Some investors will send out a recurring mail piece once every other month, or every 3 months for a 12 month period. You’ve already spent the effort researching and driving to find these properties, so you might as well spend a few extra dollars and continue to market to them!

Special Thanks to Chris Feltus of Feltus Family Homes for his assistance in preparing this original article.

The Best Real Estate Investing Strategy I’ve Found

I'll be completely honest with you. The most powerful strategy I've used to build my real estate investing career is probably NOT what you might guess.

Land investing (that's right, buying and selling vacant land) is a massive opportunity that most investors aren't paying attention to. For the few land investors who know how to pursue this business with the right acquisition strategy, it's an extremely lucrative and low-risk way to build serious wealth from real estate.

If you want to get the inside scoop on how to start and run your own land investing business, come and check out the REtipster Club – where I've put together a full 12-module course with dozens of videos, bonuses, downloads, group coaching sessions and a members-only forum (where we spend time answering questions every week). There is no better place to learn this business from the inside out!

About the author

Seth Williams is a land investor and residential income property owner, with hundreds of closed transactions and nearly a decade of experience in the commercial real estate banking industry. He is also the Founder of REtipster.com - a real estate investing blog that offers real world guidance for part-time real estate investors.

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  1. Tiffany @circusofhumaniT says:

    Hi. I always seem to find a tiny piece of new info in old news. I sometimes drive for dollars and I’ve heard of including a picture in your letter but it always seemed too time and money intensive. What I hadn’t considered was printing the pic on your offer or the envelope. Good tip!

  2. Chris Feltus says:

    Thanks for the kind words Tiffany. Yes, putting the picture on both the envelope and the letterhead I have found to increase response rates by quite a wide margin. Additionally, take into account some of the owners have literally not seen the property for years. When you take a picture of the property that shows it in its current state of distress it helps them understand why they should considering an “as is” sale.

  3. Ryan Catchings says:

    Great information! Getting my sister ready to do some driving for my wholesaling company.
    This is a fantastic tutorial video! Thanks, Seth. Thanks, Chris.

    1. Thanks for watching! Glad you enjoyed it.

  4. Scot Poole says:

    Hey Seth, do you offer mentorship program

    1. Hi Scot, thanks for asking! We do from time to time. You can see more info about that here: https://retipster.com/mentoring

  5. Rich Burgess says:

    Hey Seth, I do enjoy your blog and appreciate the great information, however I do wonder if your still investing yourself and if so in what area land, rentals, flips, commercial, ect. Are you primarily earning a living through your web site and advertising dollars, sale of land course, ect, or are you still involved in the real estate investment world. It would be great to see some posts of your recent successes. Thanks for taking my email

    1. Hey Rich! Thanks for the nice comment. Yep, I’m still investing in properties myself. I do a much lower volume these days, as a lot of my time goes toward content creation here on the blog, but my goal is still to do at least 6 – 12 deals per year.

      What kind of info would you like to see about my recent successes? Are you talking about a in-depth case study (like this: https://retipster.com/8) – just to understand what goes into a successful deal, or is there some other insight you’re looking for? If you can clarify what specifically you want to see, I’ll see if I can work something into the schedule.

Bonus: Get a FREE copy of the INVESTOR HACKS e-book when you subscribe!

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