One of the most challenging parts of real estate investing is the acquisition process. While there are many different strategies to find high-quality investments, from searching the MLS to foreclosure auctions, sometimes what works best is just hitting the road. That’s where driving for dollars comes in.
Driving for dollars (or D4D) is a strategy used by many real estate investors to identify potential off-market investment opportunities. It involves driving around neighborhoods and looking for properties that may be undervalued or in need of repair, and then cold-contacting the owner to see if they are interested in selling.
D4D has a lot of benefits, so we’re sharing a few tips to help you get the most out of your driving for dollars strategy, and how Backflippers have an advantage over their competition:
Look in the right areas & neighborhoods
While driving for dollars, you need to pay attention to the surrounding area at all times. But where do you even start looking? Knowing which neighborhoods to target (and which to avoid) will help you find potentially better deals, faster. The ideal search area is where home values are rising, but some of the homes remain outdated. Typically, these types of areas border, or are within, hot housing markets. You can also search neighborhoods that you know have several old, unmaintained homes.
Learn how to identify up-and-coming housing markets here.
Find the right type of properties
Additionally, you should look at homes that show signs of neglect or disrepair, such as overgrown lawns, peeling paint, or broken windows. These may indicate that the property is not being well-maintained and could be a good candidate for your portfolio. While these homes may require significant repair, signs of disinterest from the owner indicate that you may be able to negotiate a better deal.
Use Backflip’s new Driving for Dollars feature
Normally when investors come across a property they’re interested in, they would need to search for the address, write it down, then go home and run the numbers. With Backflip’s new Live D4D feature, that’s no longer the case for Backflip members.
Within the app, you’ll immediately be able to pull up a property’s address by clicking the Live D4D icon on the home page, and simply pointing your phone at the home. In seconds, you’ll get a complete analysis on its potential value, so you can decide right then and there if it’s a good fit for your portfolio.
Get the first move advantage
Finally, if you’re feeling bold, you can choose to take action immediately and go knock on the doors of the houses you’re interested in. This might not only save you time, but could give you first mover advantage as you’ll more than likely be the first – and possibly only – offer the owner gets.
Introduce yourself, explain your interest in the property, and ask if they are interested in selling. If they are not, you can quickly jump back in the car and move onto the next property.
With a little bit of persistence, you’re sure to discover some lucrative deals when driving for dollars, especially when utilizing the Backflip app. Your new driving for dollars partner will help you stay organized and take action quickly – making your time on the road count!