One of the toughest parts of real estate investing is actually finding properties—especially if you’re looking for properties in need of rehab. While MLS listings and foreclosures are an excellent source for below-market fix-and-flip opportunities, hunting down deals with great return on investment (ROI) often involves putting feet to pavement. Real estate investors often call this “driving for dollars”—a practice that involves visiting targeted subdivisions with the intent of locating distressed or abandoned properties.
This method can be utilized by real estate investors, wholesalers, and bird dogs alike.
1. Defining Your Market Area
Before putting foot to pedal, know what specific neighborhood you want to survey. This depends on your target market area, exit strategy, and multiple other factors. You might want to consider things like:
Tax assessed value
Once you have your target area defined, make a list of subdivisions within that area you would like to drive.
In my example below, I am targeting subdivisions within a certain tax assessed value.
2. Gather Your Supplies
Don’t go out barehanded. Before leaving, make sure you have a camera and a pen or pencil. You’ll also want to create an Excel sheet or gridded worksheet with space for the following:
Notes—like “boarded-up windows” or “code enforcement on window”
Photo identification information (so you know which photos map to which properties).
3. Analyze the Street Scene
When driving for dollars, you must be vigilant and observant at all times. In general, the best time to drive is from 10 a.m. to early afternoon during weekdays. At this time, people are typically at work and it makes it easier to take your time driving through the subdivision.
This process becomes easier if you are driving for dollars during Halloween, Christmas, or on a trash pickup day.
Why? When Christmas or Halloween is approaching, a good portion of the neighborhood will have decorations of some sort on display. Likewise, during trash pickup day, garbage canisters will be out on the streets.
Vacant properties stand out like a sore thumb, as they won’t have decorations during the holidays or a trash can out front on pickup day.
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