When you’re first getting started in the real estate investing business, your budget might be pretty tight, especially compared to seasoned investors in your market who can afford to spend thousands on marketing each month.
Without a decent marketing budget, you have to be a bit more creative in your strategy.
This is where driving for dollars comes into play.
What is driving for dollars?
It’s pretty simple really.
Grab a pen and paper and start driving through neighborhoods, specifically looking for distressed properties. Write down the address and later on, you can look up in public tax records about the owner of the property. If it’s a property that fits your buying criteria, then it would make sense to write them a letter, send them a postcard, or even give them a call.
Below are some items to look for in the property:
- Overgrown grass
- Multiple newspapers that haven’t been picked up
- Overflowing mailbox
- No cars (possibly vacant)
- Dilapidated exterior of the property (needs paint or siding repair)
- Broken windows
- Excess trash on the property
Sometimes, you’ll find that the owner doesn’t live at the property. You can see where they live and send them a letter, letting them know you’re interested in the property in as-is condition. Let them know how fast you’re able to close and anything you can do to make the process easy for them.
Other times, the owner will live there but might be in some sort of distress. When you’re first starting out, handwriting a letter to them can be very powerful because of the personalization.
This is where your leg work can outperform a seasoned investor because as we grow in the business, we want things done with systems and automation.
While printed direct mail can look very authentic, it’s not quite the same as a handwritten letter with a personal stamp on the envelope.
It’s cost effective and you could very well be one of the only investors reaching out to the owner if the property isn’t on a list that other investors are purchasing and mailing to in mass.
You can also have other people help you with this. If they are driving through a neighborhood and see a distressed property, have them write it down and send to you. Depending on your state law, be careful on how you pay them if you get a deal out of it.
Put the hard work in as you’re getting started. As you start doing more deals, set aside a portion of your profit to add to your marketing budget and decide if direct mail, Facebook advertising, Pay-per-click, etc. will be your marketing strategy.
Make every dollar count.
A bit of leg work might pay off in a deal that you make thousands of dollars on.
A few deals can be life-changing for your family and when your marketing cost is near zero, your profit will be maximized.