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How To Drive For Dollars, A Primer

Home » Blog » Learn » Finding Deals » How To Drive For Dollars, A Primer

Driving for dollars has been something that my wife, Melissa, and I look forward to. We really do enjoy driving neighborhoods, looking for vacant, distressed houses. It’s very relaxing.

In this primer, I am going to show you how to make driving for dollars more productive and enjoyable.   Here’s what you’ll get:

  • When To Drive For Dollars
  • Where To Drive For Dollars
  • How To Drive For Dollars
  • What To Do After You Drive For Dollars
  • What To Do With The Addresses You Collect

First, have you joined our private FlippingJunkie facebook group? Come network with us!

When To Drive For Dollars

So when should you drive for dollars?  Anytime, really.  But there are times that are better than others.  A great time to drive a neighborhood is on trash day, in the morning before the garbageman has arrived.  It’s much faster to single out the houses with no cans at the curb to further inspect.  You are looking for signs of being vacant, of course.

Another one is at least a week after the phone book goes out.  The houses with the phone book still laying on the porch are likely vacant (not always though).

A great time of day is when the mailman is delivering mail.  Stop and ask him/her which houses are vacant.  It’s important to tell them what you do so that they don’t think you are looking to rob or vandalize the houses (not that you look like you would).  This would be a good time to give them a couple of your business cards and tell them that you pay for referrals (if you buy the house).

If you work a job and can’t go until after or before work, take the family along.  Make a game out of it.  Have the kids see who can spot the most vacant houses or who can spot them first.   You will be able to spend more time gathering addresses if it is fun for everyone.  I’ve had a lot of people tell me they didn’t have time because they wanted to spend time with their families after work.  Now, they don’t have an excuse.   You should incorporate your family in your business wherever and whenever you can.  NOTE: I’m not talking about partnering with families members.   I’m talking about spending time with your family while you work on your business.

Where To Drive For Dollars

This is very important.  You are not likely to find a lot of vacant houses in the higher end neighborhoods.  Do not waste your time driving through super nice neighborhoods. The opposite end of the spectrum is driving for dollars in a war zone.  Don’t do it.  Sure, you’ll find tons of vacant houses quickly.  But, unless you have an exit strategy for these dumps, it’s pointless.

The neighborhoods that are best are the ones where other investors are actively rehabbing.  Typically, these are the working class neighborhoods that usually sell for near the median price for your area.   These will usually be in areas closer to downtown and sometimes bordering the bad areas (not in the bad areas – make sure the neighborhood is trending up and not becoming a war zone).

In the beginning, it is best to choose several neighborhoods to check out with a quick drive through.  You will probably go into parts of town you have never been and learn more about the city in which you live.  I was amazed at how many cool, diverse neighborhoods San Antonio had.  There was never a reason before to go to other parts of town.  Have fun exploring.  But, as they say, “Don’t go rollin’ through a war zone, driving a fancy car, wearing lots of jewelry.”  You shouldn’t be in a war zone anyway, so you’re covered :).

How To Drive For Dollars

As you drive a neighborhood, first and foremost, be careful.  Don’t be so focused on looking at the houses that you run down kids playing in the street or hit parked cars.  I’ve almost done the latter, which is why I bring this up.  Take someone with you so that you can focus on one side of the street while they focus on the other.

Drive slow and look for signs of neglect.  Vacant houses are usually easy to spot, especially in spring.  Overgrown grass can be a sign.  If a house looks vacant, but you just aren’t sure, check to see if the electric meter is visible and look for a red tag (the city red tags a house when the power is cut off in my area – I’m not sure if this is the case everywhere).  Look for broken windows or lots of doorhangers left on the front porch.  Ask a neighbor.  If you speak to a neighbor, ask if they have a way to contact the owner.  Remember to give them a card and ask that they give it to the owner if they see them.  One of my favorites is to look at the grass that grows in the cracks of the driveway.  If it is not mashed down where the tires go, someone likely hasn’t parked there in a while.  Maybe I am taking it too far.

Here are some examples of what  you are looking for:

Vacant House 1Vacant House 2
Notice how there is a ton of stuff piled up in the garage and all of the phone books and cards left on the door.

Vacant House 3Vacant House 4
This one had a car parked in the driveway, but look at the sidewalk going to the front door. It is covered with leaves and trash. I almost missed this one. It was vacant.

Vacant House 5Vacant House 6
This one does not appear to be bad at all and did not look vacant. I happened to glance at the electric meter as I drove past. They do not have electricity (notice the red tag). Most likely vacant.
When you determine a house is likely vacant, write down the address and leave a door hanger, flyer, or even just a quick note mentioning that you are interested in buying the house with your name and phone number.  An alternative to writing down the addresses is to have a voice recorder (a lot of cell phones do this now).

While driving for dollars, it is a good idea to keep a look out for rehabs.  Stop and talk to the workers, get their business cards, look at their work, see what kind of materials and finishing touches are being used, ask if they work for an investor, ask for his/her number, give them your card, and don’t hesitate to ask for what all they did to the house and how much they charged for it.  You should also write down the phone numbers on any ‘For Rent’ signs.  This is a good way to find landlords that may be interested in buying properties from you.

What To Do After You Drive For Dollars

Take the family to get some ice cream.  When you get home, take a map and highlight the area you drove and the date you drove it.  You want to keep track of the areas you already hit.  You will want to drive the area again but not right away.

Analyze how many addresses you found.  If you drove for 2 hours and only got 3 addresses, you probably should find a different target neighborhood.  You really should find about 20 or more per hour.  It’s not a hard and fast rule, but that’s what I shoot for.

What To Do With The Addresses You Collect

Now that you have some addresses, you need to find the owners.  The first place to look is your local tax assessor.  Most appraisal districts are online now.  Just do a google search for ‘[Your County] Appraisal District’.  There should be a page on the site that will let you enter an address and will give you the name and address of the person they send the tax bill to.  This is not always the owner, but usually is.

Now that you have the owner’s name and address, send a letter simply stating that you saw their house while driving the neighborhood and are interested in buying it.  Make sure to mention the benefits for them of you buying their house.  Always ask yourself when writing these marketing pieces, “what’s in it for them?”  Handwritten letters pull much better than printed, and, no matter what you do, hand address the envelope and use a stamp.  Metered mail is almost always assumed to be junk mail.

Don’t stop with just one letter.  You should set up a system to mail to the addresses several times.  Send different mail pieces each time (alternate postcards and letters for example).

You will get some of the letters back for several reasons.  Don’t just throw them away.  Become a detective and hunt down that elusive owner.  Try some of the online phone directories to search with the name and or address.  There are some paid services like Accurint and skip tracers that will usually be able to find them.  Many investors, myself included, get busy and don’t chase these people down.  These can be the best deals, spend the time to go the extra mile and track down that owner.

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Comments (43)

  • The Second Week

    […] I’ve put together a primer on driving for dollars that contains lessons learned from years of doing this. Kind of a ‘best practices’ article. You can view the primer here: Driving For Dollars. […]

  • Tara Brown

    Hey Danny!
    How many different zip codes are you working in San Antonio? I had a realtor tell me the best areas are north of loop 410??
    Take care…

    Tara

    • Danny Johnson

      I am interested in everything north of downtown and to the northwest. Outside of 410 are the better neighborhoods. There are some good ones inside the loop (Alamo Heights, Dellview, Woodlawn, etc.).

  • cliff

    danny, just wanted to say a big thank you for your blog. this is very inspiring for me. did one deal that turned out bad and i lost a bunch money. have been on the sidelines ever since. your blog is motivating me to get back in the game. thanks man.
    cliff

  • Mat

    Danny,

    This stuff is great. You really have a great “voice” for this stuff. Keep it coming. I’m really enjoying this and picking up some really great tips.

    Rock on.

    -Mat

  • Mark in Fl

    Great tip on the electric meter. In my area, a red tag, really a meter seal, means the power was cut for non payment. Sometimes there is a card tag hanging on the seal with the date it was disconnected.

    A blue seal here means it was a disconnect by request. Green is an active account.

    If you see the meter skewed at about a 45 degree angle inside the box, it is disconnected. In some areas the power can be off but they do not disconnect by turning them at a 45.

    MD

  • Mark in Fl

    Also, if there was a lot of meter tampering, look up at the pole. The power company tech may have actually cut the wires there.

  • Kevin

    Have you ever tried going through the local power company to see if you can get a list of houses that are shut off?

    It’d save you gas if it worked.

    • Danny Johnson

      I’ve thought about that but never really tried to make contact with anyone that would have that info. It’s a great idea and I’d love to hear about anyone that has accomplished it. Thanks.

  • Msnyder

    Hey Danny,

    I’ve only read a couple of your posts so far, but they are interesting and inspiring. Do you put your website address on your letters? Do you have a good system for tracking your mailing lists and who you’ve sent to, how many times, etc? I find I just get lost in all of mine.

    Thanks 🙂

    • Danny Johnson

      Thanks.

      I do have a quick web db (software developer background) I set up to track my letters. It’s great for being able to remove addresses when letters come back (of course I try to find the owner of these) and for those that call (so that I can look professional and not continue to mail to them). Without it, I guess I would just have to set up an Excel spreadsheet for each mailing with the addresses in each and then have a control spreadsheet showing when each mailing was done and due for resending.

      Even with my system I get busy and forget to send letters out. I guess that’s why there isn’t much competition with letters most of the time. It’s too hard to keep track of.

      Danny

  • Steven Blanton

    Danny,

    Your blog is exactly what I need to give me the step-by-step directions on how to flip houses! So many books are to vague and gurus will only give out more in depth info if you buy their courses or become a member of their REI Success Team. Keep it up you’re helping so many people change their lives through your blog.

    Steven

    • Danny Johnson

      Thanks, Steven.

      I really appreciate the comments. I know a lot of people are visiting the site and it’s great to hear the positive feedback.

      Danny

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  • Scotty

    When driving for dollars, try these apps. homesnap, which takes a pic of the house and then tells all you need to know about the house, Great tool. The other app is GPS Pal, which, once you start it, it tracks every area you go, so you dont backtrack to places you been.

    • Danny Johnson

      These are great ideas! Using these apps for driving for dollars will be very helpful. Thank you, Scotty.

  • Bob C

    Hand addressing the envelope is an excellent suggestion.

    Do you personalize the letter with “Dear NAME” ? and maybe the address in the body somewhere – something that has to be either mail merged or hand written
    ~or~
    Do you just send a standard (as personal as it can look) form letter that has no customization, merging?

    The customization seems like a buncha work for perhaps little ROI.

    • Danny Johnson

      Hey Bob.

      Yes, we personalize the letters with “Dear Name” and the address within the letter using mail merge in Word. It’s really not that hard to add the merge and it captures their attention more when it has their name and a property address of a house they own.

  • Bob C

    I’ve started to look for houses while enroute to my normal errrands. I’m amazed how many there are once you start looking.

    So I’ve got some names, and as expected the mailing address for some are quite a ways away. I get very excited when i see an absentee owner. BUT now I’m thinking of the next (well maybe its a couple steps) ahead… How do i get in to see the house? If the owner .lives far away, how does one make arrangements to get inside, to get the key?

    • Danny Johnson

      It’s always amazing what you start noticing when you start looking. There really are a ton of vacant, distressed properties in some areas.

      This is not the time to worry about those questions. They do not matter until you actually speak to the owner. Then the answer will come easily. Just ask them how you might be able to take a look at the inside. A lot of times they will mail you a key, believe it or not. Some have a key left at one of the neighbors houses or relative that lives nearby.

      But again, don’t worry about these ‘unknowns’, just worry about finding more addresses and, most importantly, do something with the ones you already have (send letters, postcards, try to find phone numbers, etc.). That’s most important and the other things won’t EVER matter unless you try to make contact.

  • $14,456 Wholesale House Flip and Other Goings On

    […] have been mostly from my we buy houses San Antonio house buying website. A couple from probate and driving for dollars mailings and a couple were rentals that became […]

  • Chet maxwell

    I stumbled across a great mobile app called Realty Pointer – I’m not sure it works in all parts of the country but here in So Cal it’s spectacular. I’m assuming it taps directly into county assessors records. It allows all u to access all kinds of pertinent info within seconds.

    • Danny Johnson

      Thanks. I’ll have to check that out.

  • Roger

    Just wanted to say thank you for all the great knowledge and great resources you have provided. I’m a new investor and have been looking for a mentor for quite sometime. I feel I have found a great mentor in you Danny, Thank you.

    • Danny Johnson

      Thanks, Roger.

      Glad to hear that all of this information is helping you in your path to becoming a successful house flipper.

  • Mooney Bob

    Hi Danny,
    So, the vast majority of abandoned houses I’m finding are under Lis Pendens. And the majority of what’s left are significantly upside down on a mortgage (mortgage company hasn’t bothered filing lis pendens yet). Your thoughts?

    Do I simply continue this hunting in hopes to find EMPTY houses that have POSITIVE equity? (feels like a needle in a hay stack)

    • Danny Johnson

      Hello, Bob.

      You just need to keep on keepin’ on. I do feel it is odd that the “majority” would be under lis pendens. Maybe the area is the problem. Is this a median price range area or better? Are they “newer” neighborhhoods (90’s or newer)? You might want to try a more working class, older neighborhood.

      • Mooney Bob

        The neighborhoods are 80’s. I’m guessing by your question that 90’s and newer is not as good (less equity)?

        House prices in the median range to perhaps lower.

        Thanks for your assistance!

        • Danny Johnson

          Correct about less equity, typically.

  • Daniel

    Hi Danny,

    I am very interested in learning real estate investing. I want to eventually have properties to rent out. I am currently in a job that is unstable. Decent pay when working but takes most of my time away from having free time, family time and is very difficult to save up to make any large purchases. How can I get started buying and selling real estate with no extra money and very little time?

  • Stephanie

    Thank you so much for your insights! We love the idea of having a family business. We have four boys from teens to elementary age, who can help us, and can be taught to do for themselves. Thanks for helping us to get started and shedding light on the secrets. Especially love that you said to go out for ice cream after ‘driving for dollars!’ They’ll love you for that!

    • Danny Johnson

      No problem. Glad you are getting some ideas. Ice cream sounds pretty good right now…

  • Antonio

    What do you do when you track down the owner of a vacant property & the letters you mailed get returned to you stating the property is vacant????
    Ive been sending out 30 a week with a 95% return to sender (me) average?

    • Antonio

      I meant track down the owners name….. Normally the only listed address for the property owner is the same address of the property you found vacant.

      • Danny Johnson

        This is where you can set yourself apart from the majority of investors…including myself. I always mean to follow through and find the owners of the returned letters and postcards but always found myself to busy to.

        You can do several things. You can try to find the owner through whitepages.com or other phone directory websites. You can hire a skip tracer (going to be costly for a lot of leads). You can knock the doors of the neighbors houses and ask if they have contact information for the owner.

        Like I said, the majority of people won’t spend the time to do this and this is why the effort is well worth it. You are highly unlikely to be facing much competition if any of the owner’s of these houses do want to sell. 🙂

  • Stephen

    Thanks for all the great information & it’s free, can’t beat that!! The book is full of information too, it’s really motivating me!

  • gerald major

    I am interested in driving for dollars.

  • Mark Winston

    Greetings Mr. Johnson me and my partner are very new and we are gathering information to help us to get started fix and flip and whole selling. Anything you give us to help us along the way would be greatly appreciated.

    Mark & Lou

    • Danny Johnson

      Hello! The best thing to do is read the Flipping Houses Exposed book (free download on homepage of FlippingJunkie.com) and listen to the FlippingJunkie Podcast. Glad you found us!

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