Driving for Dollars: A Proven Strategy for Real Estate Success

Real estate investing can be a highly competitive and challenging field, but there's a tried-and-true strategy to uncover hidden property deals that many investors overlook: driving for dollars. This hands-on approach involves exploring neighborhoods in search of distressed or vacant properties that present lucrative investment opportunities.

In this blog, we'll guide you through the steps to master the art of driving for dollars and capitalize on off-market opportunities.

Which Neighborhoods Should I Drive for Dollars?

Your initial objective is to determine the type of real estate market that aligns with your investment preferences. Real estate investors commonly categorize neighborhoods into A, B, C, and D markets. The A markets represent affluent areas characterized by gated communities and high-value properties, often exceeding a million dollars. On the opposite side of the spectrum lie the D markets, encompassing economically disadvantaged neighborhoods that may face various challenges.

You can find real estate opportunities in every market, so it’s up to you to decide where to focus. We encourage you to give special attention to ‘C’ neighborhoods. These are the middle-priced areas where the majority of homes are located. You are likely to find a high percentage of potential deals here.

There are four basic types of neighborhoods in every market.


“A” Neighborhoods – High-Priced Homes

- High price point

- Large homes

- Historic areas

- Gated communities

- Highly desirable location

“B” Neighborhoods – Middle to High-Priced Homes

- One step down from the “A” neighborhood

- Nearby shopping, which includes chain stores

- Mostly owner-occupied

- Vacant homes stand out

- Fewer rentals

“C” Neighborhoods – Middle-Priced Homes

- Small businesses nearby

- A mix of older and newer homes

- A mix of owner-occupied and rentals

- More flexible sellers

- Good cash flow properties

“D” Neighborhoods – Low-Priced Homes

- Depreciation

- Good cash flow

Factors to Consider when Choosing an Area to Drive

There are several factors to consider when choosing an area to start in. Let’s review some of those factors:

- Price range

- Types of properties

- Investment Methods

- State and local laws

- Growth

- Rents

- Exit strategies

- Desirability

- Proximity to where you live

Step 1: Plan Your Route

Start by researching local neighborhoods and identifying areas with high potential for undervalued properties. Look for regions with a mix of older homes, recent renovations, and new construction projects. Once you've narrowed down your target locations, plan a systematic route to cover the area efficiently.

Step 2: Know the Signs

As you drive through your chosen neighborhoods, watch for visual cues indicating a property may be undervalued or distressed. These signs might include:

- Overgrown or unkempt yards

- Peeling paint or exterior damage

- Abandoned or boarded-up homes

- Accumulated mail or newspapers

- "For Sale By Owner" signs

- No personal items like hoses, potted plants, or kids’ toys.

Step 3: Document Your Findings

When you spot a promising property, take detailed notes, including the address, property condition, and any visible issues. Capture photos of the property, if possible, for future reference.

Step 4: Verify Ownership Information

After completing your driving for dollars session, use public records or online tools to verify the ownership information of the properties you've identified. This step is crucial to ensure you're reaching out to the correct owner when initiating contact.

Step 5: Make Contact

With your list of potential investment properties and verified ownership information, it's time to make contact. Draft a personalized letter or postcard expressing your interest in purchasing the property. Be genuine, friendly, and professional in your communication. You can also consider using phone calls or door-knocking as alternative contact methods.

Step 6: Follow Up

Persistence is key when it comes to driving for dollars' success. If you don't receive a response to your initial outreach, follow up with the property owner at regular intervals. Building rapport and staying top-of-mind can increase your chances of securing a deal when the owner decides to sell.

By following these steps and dedicating time and effort to driving for dollars, you can uncover hidden real estate gems and gain a competitive edge in the market. Happy hunting!

Click here to learn more about how REIPro can help you with all aspects of real estate investing, including driving for dollars.