How To Get Strangers To Send You Real Estate Deals

David Lecko has developed a simple yet effective system that has helped over 10,000 people across all 50 states close their first wholesale real estate deal. In this blog post, we will explore Lecko's insights into a creative real estate marketing technique called "driving for dollars," where investors drive around looking for discounted properties to wholesale.

Particularly, we'll cover insights into strategies to keep your drivers bringing you fresh, high-quality leads, consistently.

What is Driving for Dollars?

The premise behind driving for dollars is straightforward - real estate investors physically drive through neighborhoods on the lookout for distressed or rundown properties. They take down the addresses and then reach out to the owners to see if they would be interested in receiving a cash offer. The goal is to find motivated sellers who may be willing to sell their property well below market value.

Payment Structures for Outsourcing Deal Finding

Lecko highlights three common payment arrangements that real estate investors use when hiring drivers to uncover potential wholesale deals:

1. Paying an hourly rate
2. Paying per distressed property identified
3. Paying a bonus when the investor closes on a property the driver sourced

At first glance, the bonus structure seems the most appealing since there's no money required up front. However, Lecko cautions that in practice this approach often falls short. Drivers rely on a steady income to pay their monthly expenses and can't depend on uncertain future payouts down the road. The hourly or per-property setups provide more stability.

The Financial Realities of Each Model

To demonstrate why the hourly or per-property plans usually cost less in total and retain drivers longer, Lecko crunches some numbers. He estimates that in order to land a profitable wholesale deal, investors need to target around 300 distressed homes in a given market.

If paying a driver $20 per hour and they identify approximately 12 promising properties per hour on average, it would cost $500 to have them scout 300 houses. Compare that to paying a $1,000 bonus per successful closing – the hourly route saves the investor money while keeping the driver happier.

Managing Driver Expectations

Drawing from his experience managing wholesale driving teams, Lecko puts forwards several best practices:

• Require at least a 20 hour per week commitment from drivers to prevent turnover
• Use route tracking in DealMachine to validate the work being performed
• Schedule weekly check-ins to provide feedback and encouragement

He’s also found asking applicants to complete a small paid “test project” weeds out less serious candidates. Having drivers sign a formal contract further safeguards the business relationship.

Maximizing Efficiency with Technology

In today's tech-savvy world, incorporating technology into the driving for dollars method can greatly boost efficiency and scalability. Tools like DealMachine make spotting distressed properties easier and quicker. They offer features such as optimized routes, property tracking, and automated mail outreach. By using these tools, investors can cover more ground in less time, finding more potential deals while keeping everything organized.

Additionally, these platforms provide helpful analytics and reports, letting investors track their team's performance and make adjustments as needed. Integrating technology not only boosts productivity but also frees up time for investors to focus on analyzing and negotiating deals, leading to better returns on investment.

Key Takeaways

Unless real estate investors are able to perform driving for dollars themselves initially, the hourly payment model appears optimal both for cost and driver retention. By clearly defining expectations upfront through a contract and checklist, maintaining open lines of communication, and providing steady payment, wholesale investors can effectively build an external driving for dollars deal pipeline.