You know that boarded-up, overgrown property you drive by every day? Other wholesalers see those, buy them for a low price, and sell it at a higher price point to investors willing to fix the property up. You can do the same—the scouting method called Driving for Dollars.
Scour the streets from behind the wheel of your car, and seek out hidden opportunities in real estate! In this article, we’ll look at why driving for dollars is a good wholesaling strategy, how it works, plus tips on how to make your driving for dollars an organized process.
Real estate wholesalers who drive for dollars comb through neighborhoods looking for distressed or neglected properties from the back of their steering wheel. Once they see a potential property, they’ll cold-contact the owner to see if they’re willing to sell (i.e., a motivated seller). If the owner’s willing to sell, the wholesaler puts them under contract and then finds an investor to purchase and rehabilitate the property.
The driving for dollars strategy is an excellent, no-brainer way for wholesalers to seek out potential properties and seal more deals. With a watchful eye and a bit of savvy, you could uncover hidden gems and pocket some serious profits by, very simply, driving around.
Driving for dollars focuses on distressed homes that present the possibility to be sold under market value. But, what does “distressed” actually mean? Here are the 3 criteria that qualify a property as such:
Physical house damage represents the most important kind of distress that you’ll look for. While you’re driving around the neighborhood, look for obvious signs that the property is run-down in any way, like:
- Broken windows
- Boarded-up doors and windows
- Damaged driveways
- Damaged roof
- Messy garden or yard
Clear signs of distress qualify a property for your list of potential properties to wholesale. Take notes and photos (if appropriate) of these signs so you can look back at them when you need to.
#2 Outdated Design
A house may be outdated if the interior or exterior design isn’t aligned with the current trends. Outdated designs can range from something simple like unpopular wall colors, unmentionable carpet in the kitchen or laundry space, or seriously unsightly popcorn ceilings that have to be removed for health reasons.
For interior designs, you’ll have to ask for permission from the owner to enter the premises. Once you get in, it’s as simple as keeping an eye out for outdated details.
An owner’s financial or other life situation might be a distressing issue that motivates them to sell an inhabited or uninhabited run-down property for below market value. The owner’s situation might not be something you can quickly see on a drive-by, so make note of physical signs of property distress first and use them as clues to learn more about the owner’s situation.
For example, if the house is a rental property, the owner might not live in it and could be too busy to deal with maintenance. They might want to avoid going through the hassle of selling the property and wholesaling could be an easy solution to get rid of it for quick cash.
Want to Make Driving for Dollars a Lot Easier?
Driving for dollars is a great way for beginner wholesalers and experts alike to invest in the market, but it takes time and patience. It can be difficult to keep track of every street you’ve driven on and every house you’ve seen.
Several apps designed to guide and organize driving for dollars are available on the market—the most notable of which is called PropStream.
The PropStream driving for dollars app is designed to make driving for dollars a straightforward process. The app’s features narrow your search according to your preferred filters to save you time on your drive.
PropStream driving for dollars app provides:
- Property results up to 50 miles away: Filters for specific property criteria
- Filtered property information: Narrows your search by lot size, year built, home features
- Multiple Listing Service (MLS) statuses: Tells whether the property is on or off the market, for how many days it’s been listed or off-market, and if the listing is below the market price
- Pre-foreclosure or bank-owned: Removes properties listed as pre-foreclosure or owned by a bank, whether you’re interested in that or not
If you want a more flexible drive looking for distressed or vacant homes, another PropStream feature, “just drive,” gives real-time and recordable route directions. You can even tap on properties around you to see the property’s detail and save the listing for future reference.
Overall, PropStream helps you keep your freestyle property searches organized.
Driving for Dollars is undoubtedly a valuable skill to add to your real estate wholesaling repertoire. Whether you’re looking to make some quick cash or engage in some long-term projects, the effort that goes into driving for dollars can yield great rewards.
If you’re dedicated and have a sharp eye for detail, you’ll properly assess potential properties to wholesale and identify deals that fit your criteria. So get out there, keep that eagle eye on the street, and you’ll land a lucrative deal before you know it.
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