For real estate investors, knowing how to find real estate deals is crucial. One popular strategy is driving for dollars. Driving for dollars is the process of driving around targeted neighborhoods with the intention of finding distressed or abandoned properties for investment. An investor will then contact the owner of the property and make an offer. It is a cost-effective way of finding off-market properties with motivated sellers from the comfort of your car. Since the sellers are motivated and competition is low, the properties are usually below market value. This makes it a good method of finding cheap investment properties, especially for the fix and flip real estate investment strategy. However, you have to be creative to find them. This guide will help you spot opportunities to get real estate deals every time you hop in your car.
Here is a list of what to look for when driving for dollars:
What to Look for When Driving for Dollars
1. Deferred maintenance
As you drive around your neighborhood, look for properties with deferred maintenance. Even if a home is not vacant, neglected external maintenance or repairs usually means that the homeowner is struggling to keep the home and would be open to a purchase offer.
2. Overflowing Mailboxes
Mail piling out of the mailbox might be a sign that the homeowner or tenant has moved out and the property is vacant.
3. Overgrown Yards
A potential driving for dollars real estate opportunity is a house with overgrown grass, shrubs, and other overgrown vegetation around. A dying or unkempt lawn may also indicate that there are no people in the house to take care of it.
4. Broken or Boarded-Up Windows
A real estate property with broken or boarded-up windows is a clear sign that it is vacant. This is one of the easiest signs of distress to spot.
5. No Vehicles in the Driveway
If there are no vehicles parked in the driveway of a dilapidated house, there is probably no one living there.
6. Piled Up Newspapers
An excessive amount of newspapers stacked up on the porch indicates that the owner of the property hasn’t been collecting them and has probably moved out.
7. No Curtains, Blinds or Drapes
If a house has no curtains, blinds or drapes on the windows and, therefore, you can see through it, then there is a good chance it is vacant.
8. For Sale by Owner Signs
Properties with FSBO signs are often not listed on public listing services or on the MLS. Since buyers and agents nowadays are heavily reliant on technology in their property search, such properties often get overlooked.
Related: Buying a House For Sale by Owner: 6 Tips for Real Estate Investors
9. Hanging Gutters
Gutters that are hanging off the house or filled with dry leaves are also a good sign of a distressed property.
10. Faded or Peeling Paint
Another sign of property distress is fading or peeling of paint on the outside. The siding panels of the house may also be extremely dirty or missing.
11. Lack of Decorations During Holidays
When driving for dollars during holidays like Halloween and Christmas, the lack of decorations makes abandoned houses stand out even more.
12. Broken Fences
When looking for investment properties for sale by driving for dollars, broken or open fences indicate that the house is not being maintained. This can be a good candidate for a driving for dollars investment property.
13. No Garbage Cans Out
Another thing to include in your checklist of what to look for when driving for dollars is houses with no trash cans out. If the house doesn’t have garbage cans out while the rest of the neighborhood does, there is a good chance the house is vacant.
14. Locks on Doors
Distressed properties usually have locks on every door of the house. This is usually an indication that the owner is not living there anymore.
15. Outdated House
Zombie properties are usually abandoned by the owner and will, therefore, look outdated and in worse condition compared to surrounding properties.
16. Red Tag on Electric Meter
If you look at the electric meter of a house and notice a red tag, it typically means that the meter has been locked for nonpayment. This shows that the house is most likely vacant.
17. Notices on Doors or Windows
If you see a number of notices on the doors and windows of a house, there is a good chance it is the home of a distressed owner.
18. Lights Are Off at Night
Abandoned properties will not have lights turned on at night. When driving around the neighborhood at night, look for houses with lights off inside and outside.
19. A Profitable House
All the above features may lead you to a distressed property. However, not all distressed properties will have a good return on investment. After finding an investment property for sale that meets your criteria, be sure to analyze it by entering the property on Mashvisor’s investment property calculator. The tool will aggregate all the necessary real estate data like expected rental income, expenses, cash flow, cap rate, cash on cash return, and even real estate comps.
Related: How to Get the Highest Return on Investment Property
The Bottom Line
If you are wondering how to find investment properties for sale, driving for dollars is a great technique to consider. Through this strategy, you can find off-market real estate that is below market value. However, be sure to go through the above checklist of what to look for when driving for dollars first. Also, make sure you do your proper due diligence and study the local laws and regulations to ensure that you are not doing anything illegal. After you’ve found a lead, you should write down the address and take a few pictures of the property. You can then find and contact the property seller and qualify the lead.
Related: How to Find Out Who Owns a Property for Off-Market Deals
However, driving for dollars is a very manual method of generating leads and is not time-efficient or scalable. One alternative to this strategy that will help you find the best real estate deals faster is using the Mashvisor Property Marketplace. This tool allows you to find off-market properties in any neighborhood or city in the US housing market. With helpful filters, you will be able to narrow down your search to match your criteria. Moreover, the tool allows investors to access owner data.
To start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount after, click here.