Virtual Driving For Dollars: A Technique for Real Estate Investors

In the world of real estate investing, finding great deals is the key to success. However, with the ever-evolving strategies and techniques, it can be challenging to keep up with the most effective methods. In this blog we'll hear insights from David Lecko, the creator of DealMachine, a real estate investing software that has helped people close 10,000 deals in all 50 states. We'll explore the concept of virtual driving for dollars and how it can be a game-changer for real estate investors.

The Evolution of Deal-Finding Strategies

Over the years, the strategies for finding great deals have been constantly evolving. Some investors may suggest looking for rundown distressed properties, while others may recommend pulling lists such as tax delinquent or absentee owners. The methods of reaching out to property owners have also shifted. The effectiveness of these strategies moves in cycles, with some becoming oversaturated and less effective over time.

Driving for Dollars: A Timeless Technique

Despite the changing landscape of deal-finding strategies, one technique that has remained effective for decades is driving for dollars. This method involves physically driving around neighborhoods, looking for rundown properties that may be potential investment opportunities. The idea behind driving for dollars is that if a property is in disrepair, the owner may be more likely to sell it quickly and at a discounted price when faced with an emergency or life event.

"If you are limited on money but you have abundance of time, the best way to find deals is actually driving for dollars. That hasn't really changed in decades." - David Lecko

The Advantages of Driving for Dollars

One of the main advantages of driving for dollars is that it allows investors to build a targeted list of properties that may not be found on broader lists such as tax delinquent or absentee owners. By physically identifying rundown homes, investors can create a unique list that fewer people have access to, increasing the likelihood of securing a great deal.

The Challenges of Traditional Driving for Dollars

While driving for dollars is an effective strategy, it does come with some challenges. One of the main issues is that it can only be done during daylight hours, which may be difficult for investors who have a 9-to-5 job. Additionally, physically driving around neighborhoods can be time-consuming and may incur costs such as fuel and vehicle wear and tear.

Virtual Driving for Dollars: A Modern Solution

To address the challenges of traditional driving for dollars, David Lecko and his team at DealMachine have developed highly efficient virtual driving for dollars technology. This modernized, high-tech version of the classic technique allows investors to scout for investment-worthy properties using Google Street View, all from the comfort of their own homes or offices.

How Virtual Driving for Dollars Works

To get started with virtual driving for dollars, investors need to identify a target neighborhood they're interested in. David recommends focusing on areas within 20 minutes of the outer belt highway or interstate of a city, targeting blue-collar neighborhoods with homes that may be around 40 years old and in need of updates or repairs.

Using the DealMachine app, investors can select the "Virtual Drive" option and begin exploring the chosen neighborhood. The app will display Google Street View imagery, allowing users to look for signs of distress such as overgrown bushes, stuffed mailboxes, peeling paint, cracked windows, or tarps on roofs.

The Importance of Volume and Speed

When virtually driving for dollars, the goal is not to find the perfect property but rather to add a large number of potential deals to your list as quickly as possible. David suggests aiming for a minimum of 300 rundown homes, focusing on volume rather than perfection. The DealMachine app provides helpful tags and filters to keep track of the most common signs of distress, making it easier to identify potential investment opportunities.

The Benefits of Virtual Driving for Dollars

Virtual driving for dollars offers several advantages over the traditional method:

1. Efficiency: Scouting for properties online can be much faster than physically driving around neighborhoods, allowing investors to find potential deals more quickly.
2. Cost Savings: Virtual driving eliminates costs associated with traditional driving, such as fuel and vehicle wear and tear.
3. Broader Reach: With virtual driving, investors can scout for properties in any part of the country, opening up a wider range of investment opportunities that may not have been accessible otherwise.

Combining Virtual and Traditional Driving for Dollars

While virtual driving for dollars is a powerful tool, David still believes that there's nothing better than going to a property in person, especially for new investors. However, virtual driving can be an excellent option for those who live in different countries or have limited time due to work commitments. By combining both virtual and traditional driving for dollars, investors can maximize their chances of finding great deals.

The Power of Taking Action

One of the most important lessons David shares is the power of taking action. When he first started in real estate investing, it took him seven months to close his first deal, and he spent three months finding only 40 properties. However, he emphasizes that the fastest shortcut to getting properties is to identify 300 rundown homes as quickly as possible and then reach out to the owners through direct mail, phone calls, or emails.

Conclusion

Virtual driving for dollars is an effective technique that can help real estate investors find great deals more efficiently and cost-effectively. By leveraging technology and combining virtual and traditional methods, investors can build targeted lists of potential investment opportunities and increase their chances of success in the ever-evolving world of real estate investing. Remember, the key to success is taking action and consistently working towards your goals.