I drove for dollars, now what?

12 Replies

Over the weekend I started driving around the area in which I live, and was honestly a but shocked by how many properties I came across that were either vacant or in a major state of disrepair.  Within a fairly concentrated area I found about 15 such properties, took some pictures and recorded the addresses, but I'm not really sure what to do next.  

I know I need to research the properties and track down the current owners, but once I do, what's the next move?  Should the first attempt at contact be a letter, knocking on the door, a phone call?  Maybe a mix?

I'd love any advise that could be offered on how to make contact and, probably more important, what to say.  

Thanks!

@Jonathan Lipson - I would start out by sending out a form letter. They will contact you if they are interested in selling.

talk to the neighbors, they might be able to shed some light and provide contact info

@Jonathan Lipson

Phone call or in person will significantly improve your chances of putting a deal together.  Building a rapport is difficult by letter.  I saved a few of my letters and postcards in the BP fileplace.  They generate attention but I admit I have a high failure rate of not following through.
F
rank

First create a business plan.  DO NOT WING IT.  You will waste time, effort and energy doing this as a fly by night type of wholesaler.

Next time you drive for dollars, you should know the area in which you're driving. The average ARV by neighborhood. You should also know how much repairs cost and who's willing to buy in that area. You need to understand which areas are coming up, which are declining. You will need to understand what a good deal is (You create them, there is no magic bullet, unless you're secretly @Brad Pitt, then you are a magic bullet). Your end buyer will tell you their buying criteria.

Your end buyer can give you contracts they use and who they use to close.

After knowing that, create a way for the seller to contact you before you start mailing out (door hangers, flyers, post it notes that say something like " i want to buy your house"), then use a script to which you can filter out results between motivated and maybe motivated.  

When you go driving again and see a house, knock on the door. No answer? Leave a marketing piece.  

Send a letter if they don't live there by finding out via tax records.

Use www.marketlikeawholesaler.com by @Jerry Puckett.  He will give you some great advice and scripts if you use his service.  

When your calls come in, know what you need to say.  If you need help with analyzing a deal or two ask here.  People will gladly help, but won't do it for you.

This is just the tip of the iceberg, good luck and may the odds be ever in your favor.

I also noticed your pro, so you should have access to the 2012 Audio, listen to Will Barnard and the Wholesaling bootcamp by Aaron Mazrillo, and Ryan Webber.  It will get you on the right track and they offer more insight than what you can read on the forums.  

Or you can JV a few deals with a legitimate wholesaler. Anyone not willing to do 50/50 is wasting your time or scamming you. Get a contract on that too clearly defining your relationship.

ALWAYS BE UP FRONT. Someone will huff and puff if you're not, but if you're honest and ethical, then you should be fine. Reputation is everything.

Hope this helps!

Thank you everyone for the advice and suggestions.  I appreciate it. 

You received a lot of good ideas in the replies.

However, either @Justin Fernandez and I disagree or his "50/50" comment needs some clarification.  I can think of no good reason to have as a general policy that whoever brings me a deal should get 50% of the profits.  Is giving me the name and phone number of someone who might be interested in selling worth giving up 50%?  Not to me.  That's a birddog handing me a lead.   Are you bringing me a well-worded, well-negotiated, and executed contract that all but assures a profit?  That may well be worth 50% or at least some price at which to buy the contract higher than the purchase price of the real estate from the original seller.

@Justin Fernandez

Here is one definition of "joint venture": "a commercial enterprise undertaken jointly by two or more parties that otherwise retain their distinct identities"

For the sake of simplicity and what is most likely in our kind of real estate, let's agree for our discussion that we're talking only about 2 distinct parties (as opposed to 3 or more) joining in the JV.

If you don't agree with the above, please give me your JV definition and (if you have one) an example from your business how you set up your deal. Perhaps I'll concede that for your particular circumstance 50/50 is very fair and we can avoid a lot of useless back and forth.

I’ll respond with my concerns, if any.

@Ed W.

You're right in both posts. I agree with you wholeheartedly. It's like giving profit to your lumber guy, when you build the furniture. When I say JV, for me, it would be someone who's helping me build the furniture. If I have a deal under contract and they bring a buyer or vice versa.

I think we're on the same page here so no back and forth needed :)

@Jonathan Lipson

Real Estate Pros have long since dropped the concept of "driving for dollars," and for good reason.

- It's time consuming..

- More often than not, leads to no acquisitions..

- You are limited to a small geography..

- You are only as good as your last deal, then you have to go do it again.

Consider executing a well thought out mail campaign.

I tell everyone I help start in real estate to forget about buying that first deal.  

First, take 30 to 60 days and study how and why direct mail always yields the best results in creating a permanent acquisition pipeline.

We are buying properties this week from a mailer I sent out in 2007.

@Steven Butala

I agree.  Driving for dollars is for people who don't have the capital to get started running a business, but need to get capital to started and it's also a way to find leads that doesn't exist in lists.  

At some point you have to make a decision, What am I willing to trade for my time?

You're clearly there and have made that decision, maybe he hasn't.  I believe it's just another tool in the tool box for someone to utilize.  

Get real, saying investors have dropped the concept of driving for dollars, not the real investors I know. Just like me they have discovered it is a good habit to acquire. You don't need to set aside time and drive a certain area, you just do it all the time, it should be a part of your daily routine, If your going down a street anyway why not keep your eyes open and drive for dollars at the same time. You will be stunned at the amount of money you have ignored in a year in the past. 

I am still trying to stay in the retirement mode and devote my time to the care of my wife but when I am out in the car it is a tough habit to break when I see something that might be a deal and I want to hit the brakes and check it out.

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