{"id":176374,"date":"2024-08-14T14:15:30","date_gmt":"2024-08-14T20:15:30","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=176374"},"modified":"2024-08-14T14:15:34","modified_gmt":"2024-08-14T20:15:34","slug":"building-a-team-of-deal-finders-in-real-estate-investing","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/building-a-team-of-deal-finders-in-real-estate-investing","title":{"rendered":"It\u2019s Never Too Early (or Late) to Build a Team of Deal Finders. Here’s How To."},"content":{"rendered":"\n

Heard<\/span> of driving for dollars? <\/span>Wondering if it\u2019s worth pursuing?<\/span> We say yes! <\/span><\/p>\n\n\n\n

But don\u2019t do it all yourself. Instead, build a high-quality team of motivated, dedicated deal finders. You\u2019ll enhance your property sourcing and potentially gain access to leads you won\u2019t find elsewhere. <\/span><\/p>\n\n\n\n

Where do you find deal finders? It\u2019s easy: They\u2019re already all around your neighborhood. Here, we\u2019ll discuss the benefits and methodologies of recruiting local drivers and scouts to uncover high-potential real estate opportunities in various markets.<\/span><\/p>\n\n\n\n

1. Building a Team of Deal Finders<\/span><\/h2>\n\n\n\n

Driving for dollars<\/a> has been around for many years, but in the current real estate climate, some investors consider this strategy controversial, arguing it\u2019s not necessarily very lucrative. And yet, real estate veterans still promote driving for dollars as a great tool for investors, especially beginners. Who\u2019s right, and how do you make driving for dollars work in 2024?<\/span><\/p>\n\n\n\n

For those new to the concept, \u201cdriving for dollars\u201d refers to physically driving around a neighborhood in search of potential leads. The idea is that properties that seem distressed may <\/span>well<\/span> have a motivated seller, but these properties may not (yet) be available through traditional channels like the MLS. So, the ideal-case scenario is landing a deal with little to no competition by locating a suitable property and <\/span>reaching out to<\/span> the owner directly. <\/span><\/p>\n\n\n\n

Now,<\/span> the counterargument many people make is that looking for a great deal among these seemingly suitable properties can be like looking for a needle in a haystack.<\/span> It\u2019s time-consuming, too. If you\u2019re a busy investor with multiple jobs, for example, you\u2019re unlikely to be able or willing to drive around for hours <\/span>trying<\/span> to locate one or two properties that could be good leads. <\/span>Some investors also argue that finding vacant properties with motivated sellers is <\/span>tougher<\/span> now than it was<\/span>, say,<\/span> in the post-2008 era, when there were a lot of hastily abandoned homes across the country.<\/span> <\/span><\/p>\n\n\n\n

Does this mean <\/span>that you<\/span> abandon driving for dollars as a real estate investment strategy? Not at all. <\/span>You <\/span>just<\/span> need to update how you use this strategy.<\/span> Most importantly, you need to reap the benefits of innovations in real estate tec<\/span>h\u2014<\/span>a<\/span>nd<\/span><\/em> you need to<\/span> build a team of deal finders who know what they\u2019re looking for.<\/span> <\/span><\/p>\n\n\n\n

Consider this: If you have five to 10 people looking for potential leads for you, your chances of closing on a deal increase exponentially. If those people <\/span>are equipped<\/span> with an app that helps them get better at finding quality leads, those chances increase even more. <\/span><\/p>\n\n\n\n

2. Recruiting the Right Talent<\/span><\/h2>\n\n\n\n

Here\u2019s how you should <\/span>go about hiring<\/span> your deal finders\u2014and <\/span>training and equipping<\/span> them to succeed.<\/span> <\/span><\/p>\n\n\n\n

First: Where do you find your deal finders? It\u2019s <\/span>actually<\/span> much easier than you think. <\/span>With the right approach and ability to incentivize people,<\/span> you can easily find multiple deal finders in your neighborhood.<\/span> You can, of course, put an ad on Craigslist or Facebook, or you can attend your local real estate investing social group (these are typically pretty active on Facebook).<\/span><\/p>\n\n\n\n

But you may not even need to do that. Your best bets often are people who already are driving or walking around your neighborhood regularly: your mail person or local delivery driver. You also might be surprised by how <\/span>useful<\/span> your <\/span>local<\/span> contractor or property manager can be in finding leads. <\/span><\/p>\n\n\n\n

These are often perfect matches because, in terms of extra effort, they don\u2019t have to change what they do during the day\u2014they <\/span>just<\/span> need to be on the lookout for distressed properties and be able to log them.<\/span> Getting paid a little extra while already doing their job can be a great motivator, and if they\u2019re interested in real estate investing or you can get them enthusiastic about it, even better.<\/span><\/p>\n\n\n\n

Enthusiasm and cooperativeness are <\/span>key<\/span> when looking for the right talent. You also want to hire people who are comfortable learning new technology and have no problem approaching people, as they may need to contact potential sellers on your behalf. <\/span>This<\/span> doesn\u2019t necessarily mean you only hire younger people (no ageism here), but if someone <\/span>outright<\/span> says they don\u2019t use their phone that much or <\/span>that they\u2019re<\/span> not keen on talking to people, you may want to consider someone else.<\/span><\/p>\n\n\n\n

And while an interest in real estate investing isn\u2019t necessary, it\u2019s a huge plus. <\/span>Many people start their <\/span>own<\/span> investing journey by becoming deal finders; if your potential deal finder indicates they have an ambition or at least a <\/span>potential<\/span> interest in becoming an investor <\/span>themselves<\/span> one day, you have the perfect candidate.<\/span> That\u2019s because they\u2019ll be more involved <\/span>in the process<\/span> and willing to learn.   <\/span><\/p>\n\n\n\n

3. Training and Equipping Your Team<\/span><\/h2>\n\n\n\n

Now, even with the best team in the world, you won\u2019t get very far if they don\u2019t know what to look for. Training your deal finders to recognize valuable distressed properties is the first step and essential for them to start bringing you quality leads. <\/span><\/p>\n\n\n\n

However, some of your deal finders, especially your mail carrier or delivery person, may already be <\/span>highly<\/span> experienced in spotting the more subtle signs of a distressed property. Boarded-up windows and unmowed lawns are <\/span>obvious<\/span>, but they\u2019ll also be able to recognize other clues, like full mailboxes or a notice placed on a door, which can be less visible. <\/span><\/p>\n\n\n\n

The next\u2014and crucial\u2014step is to train your team to look up the property\u2019s details online. <\/span>This<\/span> is very easy to do with the DealMachine app, which will tell you whether the property you\u2019ve located is vacant or in pre-foreclosure and who the owner is. <\/span><\/p>\n\n\n\n

This second component is what makes a quality lead. Without this information, your deal finder just found an empty house, but with the key bits of information, they have found you a property that may have a motivated seller. <\/span>Deal finders who understand <\/span>how important it is to check every property and mark<\/span> it off in the app will feel more part of the process and improve their skills over time.<\/span> <\/span><\/p>\n\n\n\n

DealMachine\u2019s technology <\/span>is beneficial to<\/span> your deal finders in making their job easier and more efficient. But it\u2019s also highly <\/span>beneficial<\/span> to you, the investor because you\u2019ll be better able to manage your deal finders and track their performance. <\/span><\/p>\n\n\n\n

Another useful CRM feature is the ability to create a leaderboard for your deal finders, which increases accountability and incentivizes your deal finders to perform better.<\/span><\/p>\n\n\n\n

4. Incentivizing and Retaining Top Performers<\/span><\/h2>\n\n\n\n

We all know that the <\/span>greatest<\/span> incentives for your deal finders will be <\/span>the income they earn<\/span> from getting you high-quality leads. There <\/span>essentially<\/span> are two schools of thought on how best to compensate your deal finders. Carefully consider which one you\u2019ll choose.<\/span><\/p>\n\n\n\n

One approach is to pay your deal finders per lead, regardless of whether it turns into a deal you close on. Real estate investor Aaron Anderson <\/span>posted on the BiggerPockets forums<\/span><\/a> that he pays all his deal finders $10 per lead, no matter the outcome. <\/span><\/p>\n\n\n\n

\u201cThe reason for this is if you only pay per deal, they will be unsure if they ever will get paid because their payday depends on your performance,\u201d explains Aaron. \u201cIf you think you can get away with <\/span>just<\/span> paying per deal, you are telling the world that you can\u2019t afford to do this business or are just cheap.\u201d  <\/span><\/p>\n\n\n\n

The other approach is <\/span>only paying<\/span> for a lead if you close on it but <\/span>paying<\/span> more if that happens (say, $500 per deal). This can work for deal finders who <\/span>are in less of an immediate need of cash<\/span> and have a <\/span>more long-term<\/span> interest in investing themselves.<\/span> <\/span><\/p>\n\n\n\n

However, if you <\/span>do<\/span> go down this route, be careful to set out terms from the <\/span>very<\/span> beginning, explaining that your deal finder won\u2019t be closing any deals themselves.<\/span> Doing so would technically make them a wholesaler and could result in them asking you for a fee; in some states, it could also technically mean that they\u2019re involved in brokerage, which can be illegal. <\/span><\/p>\n\n\n\n

If you draw up <\/span>a <\/span>very clear<\/span> contract that outlines<\/span> what your deal finder will be doing and when you\u2019ll avoid these issues.<\/span> It\u2019s always best to have an honest conversation with your deal finders in advance about your expectations and which compensation model would work best for both parties. It\u2019s <\/span>very important<\/span> to establish trust and allow your deal finder to feel involved; they\u2019ll stick around longer.<\/span><\/p>\n\n\n\n

5. Case Studies and Success Stories<\/span><\/h2>\n\n\n\n

When the relationships between you and your deal finders are strong, you will often find that they\u2019ll be taking your driving for dollars business further without you needing to be involved. <\/span>Aaron Anderson <\/span>went about building<\/span> his team of deal finders <\/span>in a very <\/span>methodical<\/span> way<\/span>, even developing a training manual \u201cthat covers what I’m looking for, how to find it, and how to market for it.\u201d<\/span> <\/span><\/p>\n\n\n\n

This last part is a <\/span>huge<\/span> bonus for a real estate investor: Truly savvy deal finders take on the marketing <\/span>role as well as the finder role<\/span>.<\/span> It can be something as simple as sticking a logo on their car or wearing an attractive branded T-shirt while they\u2019re <\/span>out and about<\/span> in the neighborhood. <\/span><\/p>\n\n\n\n

A strong marketing presence may <\/span>actually<\/span> start bringing<\/span> you leads passively, purely by people noticing <\/span>that there\u2019s<\/span> a cash buyer in the area.<\/span> As Aaron is proud to say, \u201cYou get 5-10 active scouts looking for deals for you, and you will have more quality leads than you know what to do with.\u201d<\/span><\/p>\n\n\n\n

And<\/span> by using DealMachine\u2019s technology, your trained deal finders could find you these quality deals within <\/span>hours<\/span><\/em>, not days. <\/span>Just <\/span>watch<\/span> real estate investor Quentin Flores<\/span><\/a> close on his first try using DealMachine. Imagine the encouragement a deal finder will feel when <\/span>they\u2019re able <\/span>to<\/span> effortlessly bring you a quality lead<\/span>. <\/span><\/p>\n\n\n\n

6. Scaling Your Real Estate Investment Efforts<\/span><\/h2>\n\n\n\n

One question many real estate investors have is: Can I scale my operations by having multiple teams of deal finders working for me remotely? You absolutely can. <\/span><\/p>\n\n\n\n

That\u2019s where having a robust management system like DealMachine is crucial. You can have <\/span>multiple<\/span> teams working in <\/span>multiple<\/span> neighborhoods, even if they are out of town or out of state. With DealMachine\u2019s driving tracking and property logging features, it doesn\u2019t matter where your deal finders <\/span>are located<\/span>. <\/span>You\u2019re still able to<\/span> track their progress and communicate with each team member quickly and efficiently. <\/span><\/p>\n\n\n\n

In fact,<\/span> this is an advisable strategy for anyone considering the driving for dollars strategy. Your immediate neighborhood will only land you so many deals. To truly benefit from this concept, you will need to expand geographically. <\/span><\/p>\n\n\n\n

Remember: You are searching for what some consider <\/span>to be<\/span> needles in haystacks. The more haystacks you look in, the better your chances of closing on great deals. <\/span><\/p>\n\n\n\n

Final Thoughts<\/span><\/h2>\n\n\n\n

Building a dedicated team of well-trained deal finders is your first step to making driving for dollars work for you. But the second and even more important step is managing their work efficiently. A management system like DealMachine\u2019s<\/a> makes your deal finders\u2019 work easier, but it also makes your work easier. You will know how well your deal finders are performing and be able to motivate them by keeping them engaged with the process.\u00a0<\/span><\/p>\n\n\n\n

Ultimately, you can close on those coveted off-market deals faster, thanks to your deal finders\u2019 ability to get in contact with a property owner right away. With the right people and technology, you can reap the rewards of driving for dollars\u2014even in a challenging real estate climate.<\/span><\/p>\n\n\n\n

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\n \n <\/div>\n \n\n\n

This article is presented by DealMachine<\/strong><\/h3>\n\n\n\n
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DealMachine empowers real estate professionals to discover and invest in off-market properties with ease, offering a comprehensive app that guides you every step of the way. From identifying potential investments to instantly accessing high-quality homeowner data for informed decision-making, we make investing simple and effective. Click to start expanding your portfolio today!<\/p>\n\n\n\n

\n Learn more about DealMachine<\/a>\n <\/div>\n\n\n\n
<\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"

Deal finding is one of the most important parts of real estate investing, yet a lot of investors struggle to put it together. Here’s how you can form a stellar team of finders. <\/p>\n","protected":false},"author":613721,"featured_media":176368,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7400],"tags":[],"class_list":["post-176374","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-building-team"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/176374","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613721"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=176374"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/176374\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/176368"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=176374"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=176374"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=176374"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}