By Tom Tarrant
The author has permitted the reprinting and redistribution of this article.
I am not sure when the first time I heard this phrase used but as I surf the web reading other bloggers’ REI sites I haven’t come across anyone covering it so I picked it to be the topic of my new tip. Driving for dollars refers to the practice of getting in your car, filling up the tank and hitting the pavement to drum up some leads that wouldn’t make it into your world otherwise. Some people refer to this as bird-dogging but to us we don’t sell our leads so it’s just simply one more form of lead generating. There are many variations of this but I’ll cover what works best for my wife and I. Anyone can do this, deals are out there and waiting.
On weekends its always been enjoyable for us to drive our farm areas and visit anything new that hits the market, other properties that have recently been rehabbed by other investors so we can check out their work or even scout for new FSBO (For Sale By Owner) signs that may have popped up. You have to become an expert on your areas so it will be easy to identify a deal when you see one. Knowing the active inventory and what is selling will help you get a handle on this.
While out driving around we are always on the lookout for distressed properties. These homes might have unkept lawns, newspapers piling up, outdated appearances or generally appear disheveled compared to the neighborhood (but not always). They don’t have to be vacant or abandoned. In most cases they in fact are occupied. We write down the house addresses and a brief description to help us remember the home later (it will be hard after you identify 100). These homes are of course unlisted and not currently for sale. Getting in the door with a private party considering to sell puts you in the drivers seat. There is literally no competition from other bidders and your chances of making a deal are good. Knowing how to negotiate once you do get the appointment will have to be left for another discussion.
As a motivated, gung-ho investor it will become second nature to scan every house on the street as you are driving anywhere. Be careful and keep your eyes on the road though). It doesn’t have to be on Sunday while out with this intention. In fact, every time I drive to Home Depot or anywhere for that matter I make it a practice to take different routes in order to possibly find something new on a street I haven’t been down before. I probably look like a bobble-head casing the neighborhood or someone looking for his lost dog if anyone sees the way I drive.
By writing down the addresses we keep a lead log at home and send out letters weekly to these homes. Owners mailing addresses can be found online from the county tax rolls. Out of state mailing addresses are very good to find. Our letters are hand written, in plain envelopes and have collector style stamps so we look very un-professional and personal. My wife likes to spray a touch of perfume on the envelope. If the man of the household gets it he’s sure to open it because of the smell and if the lady of the house gets it she’ll be sure to wonder who is writing her husband and open it also. Our letters inside are on yellow legal pad, hand written and simply state “Dear John Smith, I want to buy your house this week. Please call me ASAP either way. 999-9999. Thank you, Tom and Wifey Tarrant. I include my wife’s name to explain the perfume smell on the envelope and also make them feel less threatened. This letter looks like it’s directed at his or her home specifically and not from “we buy houses” people soliciting everyone blindly. Our success rate if phenomenal with this approach.
Since you have gone to the trouble to find the house, why not take a minute and further your cause while you are in front We also have handwritten notes with scotch tape handy that we pre-prepare and always have in the truck. I hand write one and then run them off on the printer so they all appear handwritten. The language on the small note is exactly the same except there’s no name of the homeowner of course because at that moment we don’t have that info. Well in fact we do if we want it because one of our best tools is the wireless laptop on our journeys. We don’t take the time to run owner searches for these notes, they’ll get our mailed letter shortly anyway. The phrase “this week” shows you are serious and “please call us ASAP either way” makes your phone ring quickly. Here in Texas everyone is really friendly, most people call and thank you for leaving the note even if they don’t plan on selling. Kindly ask them to save the note in case in the future they or any neighbors decide to sell. A friend of ours who is a wholesaler here in town actually had sticky notes made from a printer that appeared to be hand written but are mass-produced.
Insert note pic
On our last outing we hit up our regular farm and then 2 new adjoining areas. I let my wife drive so I can jump out and stick up the notes on the front doors. We put out about 100 notes in 3-4 hours. In the next 48 hours we had 27 calls from our efforts. Yes, a couple were from angry residents saying they didn’t want to sell and to leave them alone but we also got 6 leads on deals. One elderly lady said she didn’t want to sell her personal home but had 2 duplexes she didn’t want. Just imagine where this can go. Don’t hit up the same area too often or you might get negative results. This is a phenomenal success rate for generating leads. It takes some skill to know what homes to leave the notes on. I look at a lot of factors that give me a gut feeling. It could be the car in the driveway, the presence of window unit AC’s, different deferred maintenance issues, etc. On some blocks I stick up as many as 10 notes, don’t be scared because all that can happen is they will call you and be mad. On a recent trip to see an older home and make them an offer I saw my note from earlier posted on their refrigerator. Just think of how many of my notes are out there just waiting. Waiting for the right time and a family member calls me when they inherit the house. Waiting until someone cant pay his or her back taxes. Waiting until someone loses their job or gets transferred to another city for a new job. Call it grim but its reality. People need to sell houses and we like to buy them.
Driving for dollars works. Get in your car and make sure you have everything you need to make the most of your journey. I challenge anyone to find 100 target houses in your farm, leave notes, send the letters and see the results. Good Luck and always remember to buckle up!
Tom Tarrant httptomtarrant.com
If you would like to take advantage of the market and learn how to invest in real estate and you are local to the Dallas Fort Worth area, I know a really great teacher and mentor here in Arlington Texas. Please take a look at his web site: DennisJHenson.com, Dennis has a great Mentoring and training program, I know because I am one of his former students. I learned a lot from his one on one teaching technique. – Michael Harman 817-457-7572 email@example.com>