Efficiency of driving for dollars
For some, the effort and time expended driving neighborhoods, collecting data, researching, and marketing isn't worth it. However, I feel the success of a marketing campaign from a driving-for-dollars list is directly related to the quality of data gathered and the quality of your marketing campaign.
Using a driving-for-dollars app like DealMachine can improve efficiency because the app tracks where you drive, will automatically search in public records to gather data on the owner, provide you with contact information, and even provide you with a deal-finders website or lead-capture page for the leads you market to.
During your research, you will find properties owned by banks or that are set for a foreclosure or tax sale in the near future. Knowing how the sale process works, whether it's set for a foreclosure sale or already bank-owned, tells you whether attempting to contact the real estate owner is worthwhile. Banks, especially big banks, have certain protocols they must follow when it comes to marketing and selling a property after it becomes bank-owned, and reaching out to them directly is a lost cause.
For this reason, many investors eliminate any bank-owned properties from their marketing list, but personally, I still include them -- I just market to them in a different manner than direct mail.
The last real estate fix-and-flip I purchased was found driving for dollars (actually walking for dollars) in my neighborhood and was a real estate owned (REO) property owned by a smaller regional bank. Rather than writing the property off because it was bank-owned, I found the right contact in charge of selling the property and was able to negotiate a discounted purchase price before it ever hit the market or was listed with a real estate agent. This deal resulted in thousands of dollars in profit, just by conducting quality research and choosing the right method of marketing to the seller.
The best ways to drive for dollars
The best way to drive for dollars is to identify your target areas and develop a system for canvassing the neighborhood and collecting pertinent data. Being organized from the start will reduce time spent driving and will improve efficiency when researching the property at a later time.
Using driving for dollars to find off-market deals in real estate investing can be incredibly profitable, but having a well-oiled marketing machine and strong negotiation skills will tremendously increase your results. It's important to keep in mind that just because a property appears distressed does not mean the owner is a motivated seller or a worthy lead to market to.
Track your results, determining what percent of leads are responding to your marketing efforts, and refine your marketing efforts or list data based on your results.