Driving for dollars is an activity I actually enjoy, although I have to admit, I don’t do it as often I as should. The reason is that those particular neighborhoods I like to target are not close to where I live. But whenever I happen to be near those areas, I always try to spend some time looking for distressed vacant houses.
So what exactly is driving for dollars?
Driving for dollars is simply jumping into your car on a nice sunny day for the sole purpose of locating distressed vacant houses. I especially like to do this when the signs that a house is vacant are more obvious such as during grass cutting season. It’s pretty easy to pick out a house with tall grass and weeks and a neglected landscape. Other telltale signs are phone books laying on the front porches long after they have been delivered, or a build up of leaves or trash near the home. If you happen to be out and about on garbage day, watch for homes where the garbage hasn’t been put out. A house that has been neglected will stand out from the other homes in the neighborhood.
If you happen to run across the local mail carrier, introduce yourself and give them a couple of business cards. Let him know that you pay for referrals if you purchase a property from a lead he gives you. These folks always know where the vacant properties are in the neighborhood.
Where should you look?
I like to look for these homes in working class neighborhoods. If you find other rehabbers actively working on houses in a particular area, you’ll know you’re on the right track. Vacant homes can often be found in what I like to call first time homebuyer neighborhoods. Stay away from war zones or areas that have lots of vacant houses. You won’t be able to sell these to another investor.
What should you do if you’re not sure that it’s vacant?
If you run across an unkempt house but you’re not sure if it’s vacant, knock on the neighbor’s door and ask them. Sometimes they will know how to reach the owner. I always explain that I am interested in buying the house and leave a business card with the person.
You can also leave a flyer or a handwritten note with your information in the mailbox for the homeowner letting them know that you are interested in buying the house. I always take down the address of the property and mail them a postcard when I get back to the office. They may not always return to the property, but in most cases they have left a forwarding address for their mail with the post office.
What do I do next?
If the first postcard you sent the homeowner didn’t come back chances are they left a forwarding address for their mail. Keep mailing these folks!
However if the postcard did come back to you, you may need to do a little detective work to try to locate the owner. Most investors will simply quit at this stage and lose out on a deal that has little competition.
First check with your local tax assessor’s office and see if they have an updated address on file. In my area I can Google “property valuation my county, my state” and my local property valuation office shows up. You can do a free search at this site. I can also purchase a subscription for $25.00 a month that gives me detailed information about the property that I can’t get with the free search. This information is invaluable to real estate investors and it’s well worth the $25.00 a month to subscribe.
Another thing you can try is to simply check the online phone directories if you have the name of the property owner. If you’re not having any luck, you can always try a skip tracer or a paid service like Accurint.
Whatever you do, give it your best effort to find the owner. Going the extra mile will set you apart from most of the other investors in your town. And, it will definitely have a positive effect on your bottom line.