Driving for dollars, for those of you who are unaware, is simply the process of driving targeted subdivisions with the intent of locating distressed and/or abandoned properties. This is a guide intended to help aid investors in locating distressed properties by “driving for dollars,” detailing steps A to Z—from locating properties to marketing. Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free This method can be utilized by real estate investors, wholesalers, and bird dogs alike. Defining a Market Area Before stepping foot in your car, it’s a good idea to establish an area to drive. This will depend on your target market area, exit strategy, and multiple other factors such as: tax assessed value, house age, zip codes, crime rates, etc. Whatever your criteria, the same concept applies. Once you have your target area defined, make a list of subdivisions within that area you would like to drive. In my example below, I am targeting subdivisions within a certain tax assessed value. What You Will Need Camera Printed out worksheet Pen or pencil Once your list of subdivisions is complete, make a simple excel file to print out for use in the field (as shown in the image below). Alternatively, make a grid on paper. In addition, bring a camera to take pictures of any distressed and or vacant properties you may find. Note in your printed out worksheet which camera pictures are associated with a given house. Street Scene Analysis The key component when driving for dollars is to be vigilant and observant at all times. In general, the best time to drive is from 10 a.m. to early afternoon during weekdays. At this time, people are typically at work and it makes it easier to take your time driving through the subdivision. This process becomes easier if you are driving for dollars during Halloween, Christmas, or a trash pickup day. Why? When Christmas or Halloween is approaching, a good portion of the neighborhood will have decorations of some sort on display. Likewise, during trash pickup day, garbage canisters will be out on the streets. Vacant properties stand out like a sore thumb, as they won’t have decorations during the holidays or a trash can out front on pickup day. Red Flags to Look For When driving for dollars, there are several “red flags” you should pay attention to. For example: Tall grass Boarded up or broken windows Mailboxes filled to the brim Code enforcement taped to the door Piled up newspapers Overgrown vegetation Deferred maintenance Record & Research As you drive the neighborhoods and locate distressed properties, record the address and any additional notes in your printed out worksheet. Take a picture or two of the property, as well. Try and take the “best” worst picture of the property as possible; this will come in handy later. After you finish your drive, return home and research the properties you located on your county’s local Central Appraisal District (CAD). Now go through the list of distressed properties you jotted down in your printout. During the research phase, you will want to filter out properties that do not fit your criteria. For instance, if you are looking for high equity properties, you need to look for deed dates 15-plus years back. Once you have selected all the properties that fit your criteria, create a final list. This list will be used in your marketing. Make certain that the current owner is not a bank. If so, you will likely need to discard it. If you are unsure how to find your local CAD, try Google searching “[your county name]central appraisal district” or “[your county name]tax assessor.” Alternatively, you can research properties in the field with your smart phone or other wireless device on the CAD website. Central Appraisal District Examples Below is an illustrated example of what you will find when researching properties on your local CAD, although the format and presentation will vary from one county to another. When researching, some investors like to delineate between absentee owners (landlords or inherited properties) and owner occupied homes (personal residence). It is very simple to check which category a property falls under when researching on the CAD. If the owner address and property address match, it is an owner occupied home. If the owner address and property address are a mismatch, it is an absentee owner. Personally, I mail to absentee owners and owner occupied homes alike. Market to Your Leads Once you have finalized your list, it’s simply a matter of selecting your marketing piece of choice, whether that’s a yellow letter or postcard. In my business, I receive the best response rate by using custom invitation-style envelopes and a letter template specifically designed for this lead source. Select one camera shot from in the field. You will use two versions of this picture. One copy will be inserted into the body of the letter; the other will be re-sized as a thumbnail to print on the envelope itself. This gets my response rate incredibly high, since before they even open the contents of the letter, they can clearly see an image of their house in the upper lefthand section of the envelope. Make certain to use the owner address for your mailing address. If the property is owner occupied, the mail will go to their personal residence. And if it’s an absentee owner, it will go to wherever there primary residence is located. Continue to mail any leads you find in this manner every two to three months. Remember, the key to success is to be consistent and persistent with your marketing campaign. You will yield the best results with repeat mailings. What If You Are Unable to Find the Owner? The more difficult it is to find the owner, the less competition there will be and that means more opportunity for you. Red Flags If you drive for dollars long enough you will stumble upon circumstances where the owner’s address is not available. This creates a problem. How will you market to this lead if you don’t have their information? There are a few red flags to look out for that indicate additional research will be required to find the owner’s address. Some of the more common situations are shown below. Scenario 1: You drove by a property that was clearly vacant; however, your Central Appraisal District (CAD) displays the property is still owner occupied. This is typically due to the appraisal district not yet updating their records, which can sometimes lag behind three to four months. For example, if you drove by a property that looks like the image below, and your CAD indicates the owner still lives at that property, you need to continue your research to find the owner’s address, because obviously they no longer live there. Scenario 2: Returned yellow letters or postcards that were returned due to failed delivery. Scenario 3: When you research the property on your local CAD and you discover the owner address section contains no data. This may come in the form of being completely blank or display “No Data” (as shown in the image below) or perhaps a place holder such as “Current Owner.” Using Deed of Trust and Public Records to Track Down Owners This is the first step in the process; we will pull data from public records and use it to mine Google for owner information. When your CAD lacks sufficient information, you will use the Deed of Trust recorded in your county’s public records to track down the owner. To find your county’s public records, simply Google search “[your county name]public records.” The deed of trust will display all parties involved within the transaction, from grantors to individuals with power of attorney (as shown in the image below). This data is invaluable when attempting to locate the owner of the property. Mine Google for Data Once you have searched public records, it’s time to take the owner (and any of the grantors names recorded in the Deed of Trust) and start plugging them into Google search. For starters, try searching their full name as displayed in the Deed of Trust. If that yields few results, try combining their name + local area codes (as shown in the image below). This can often reveal: Landlines or cell phone numbers of the owner or grantors New address of the owner Any websites they own Company PDF contact sheets If you are unable to locate the owner but able to track down one of the grantors, you can often get the contact information you need by reaching out to them. Sometimes you will find PDFs or About Us profile sections on company websites, and you can use this for updated contact information. If you find a website they own, you can do a “who is” on the domain and retrieve information that way, as well. Skip Trace If all of the above fail, you might consider utilizing a skip trace service. If you take some time to research using the methods discussed earlier, you should not need to use a skip trace nine times out of 10. Leave a Note on the Property Tape a note to the property’s front door and/or garage in case the owner returns to their abandoned property. You can bet if they find a note taped to their garage or front door, they will read it. You never know when the owner may return to collect mail or check on the house. You can write the notes manually if you would like, or you can print out a stack of them using a handwritten font. Either way, bring a bunch with you into the field. Exchange Business Cards With Neighbors Oftentimes, neighbors are willing to divulge information on the abandoned property owner. After all, no one wants a vacant property sitting next door and dragging their property values down with it. If you see a neighbor outside, strike up a brief conversation, hand them a business card, and many times they will provide helpful information. Recruiting an Army of Mailmen Bird Dogs When driving for dollars, keep a look out for mailmen or delivery people of any sort. I approach them on their route, briefly introduce myself and my business, and hand them a card that explains what I am looking for. Tell them if they find a house that fits your criteria and you are able to close on it, they will collect a handsome referral fee. Mailmen know what’s going on in a neighborhood better than you do, since they drive or walk specific areas every day. Get to know a few of them, and you will be richly rewarded. Avoiding REO Heavy Neighborhoods Someone once emailed me a great question. I thought it would benefit many of you to address it here. How do you determine if a subdivision is potentially REO heavy before driving it? The answer is by utilizing your local CAD. You can quickly sort through a subdivision and get a rough idea. As illustrated below, you can view the list of individual properties with the subdivision, along with the owner’s name. You can quickly look through the subdivision at a glance and determine a rough density of REOs. This way, you can include or discard subdivisions before wasting time or gas money driving them (assuming you want to avoid REO properties). Alternatively, use the MLS if you have access. In Conclusion Hopefully with a little bit of legwork and persistence, you will discover some gems when driving for dollars. Take action, and you will reap results. If you have any questions, please leave them below and I will do my best to help. Questions about driving for dollars? Suggestions I failed to mention above? Comment below!