Whether you are a fix & sell or a buy & hold investor, the single most important factor in successful investing is to find a great deal that will bring you profits on a fix and flip opportunity or a high cap rate on a long-term hold.
There are many known ways to find deals such as real estate listings on popular web sites, trustee sales, probates and foreclosures. However, I want to focus specifically on “Driving for Dollars” and clues to look for, because it is an economical and easy strategy to find potential deals when you are out on the road.
What is “Driving for Dollars?”
This means you are simply driving in select neighborhoods looking for vacant, abandoned, or distressed properties and jotting down the addresses to follow up with the owner. As you are driving, look for clues below:
- Boarded Up Windows – Often times, vacant properties will be boarded up by the owner or the city to prevent trespassers
- Tarp Over Roof – Fixing a roof is not cheap, but it is something that must be repaired. If an owner is having trouble coming up with the money to fix the roof, s/he may want to just sell it as-is at a discount
- Inoperable Vehicle – You will see a lot of inoperable vehicles, but look for ones that have been sitting there for months, sometimes years. If you see cobwebs around the tires or below the vehicle, then that means it has been sitting there for a long while!
- Overloaded Mailbox – No one is home to check the mail every day? The property might not look distressed, but this is a sign of a vacant property
- “Unusually” Overgrown Vegetation – Overgrown vegetation can be subjective, depending on the area. Look for overgrown vegetation that stands out from the neighborhood
- Notices on Property – Time to time, you will come across some properties that have notices on the front door. Take a peak and see what issue is associated with the property
- Mailman – Ask a mailman if he knows of any properties that seems vacant. They are delivering mail to every door in the neighborhood hence they will know which homes have mailboxes that are always full. Network!
- Talk to the neighbors – They will probably have all the pertinent information on the property and the owner. Who would want the home fixed up more then the neighbors who also stand to benefit from a new owner?
Once you have a list of potential properties, you will need to track down the owner’s name, address, and phone number. This is a whole another topic, here is a list of ways you can find property owner info.
A key to finding a great real estate investment deal is to always be on the lookout. Just remember to drive slowly, watch out for kids and dogs on the road, and find great deals!
Colony American Finance is a leading provider of investment property lending solutions to residential real estate investors. We provide attractive long-term debt products for stabilized rental portfolios, as well as credit lines for new acquisitions. For more information about how Colony American Finance can help grow your rental and rehab business, please call 844-223-2231 or email [email protected]