Scaling up your Driving for Dollars
Recruiting and managing bird dogs to build a stream of leads
Driving for dollars can be the bread and butter for your real estate business. The leads are highly qualified, distressed, and you'll often end up with motivated sellers that haven't been slammed with your competition's marketing pieces if they aren't on any public lists.
We'll be going over how you can create an army of bird dogs to do your driving for you, delivering your best leads to you on a silver platter.
Principle of Scale
The key is to adopt the attitude that not every bird dog is going to stick around. Most people will submit just a few properties and give up because the reward isn't immediate, depending on your compensation system. Don't worry about keeping your current drivers, focus your efforts on recruiting new ones.
Again, depending on your compensation system, some of your drivers will be hooked the first time they get a paycheck, and they'll feed you all the leads you could ask for. Just like looking for good deals, good drivers will make all the struggle worth it.
There are driving for dollars apps available now that can help you scale up. The market leader is DealMachine, but there is a high monthly cost and the data is expensive. We've created PropertyScout as a way to drive for dollars and manage bird dogs at a greater scale and much lower cost. With that said, while some of these suggestions can be applied if you're using a different driving for dollars app, we'll be focusing this article on PropertyScout where applicable because it's designed to help with this.
Finding bird dogs can be easier than you think. The best candidates are people who spend a lot of time driving in residential areas already. Pizza delivery drivers, Uber/Lyft drivers, and especially mail-people. Teenagers are good candidates too, they're usually willing to spend more time driving for a lower incentive.
You'll need to come up with your 'elevator pitch' for potential recruits. Briefly explain what you're doing, what kind of houses you look for, and how they get paid. Here's an example.
"Hi, my name is Noah, and I buy houses professionally. I'd like to invite you to earn money working with me. All you have to do is send me the addresses of houses that haven't been cared for. I can pay you 75 cents for each address you send me. Here's my card, this has my contact details and a website with more explanation about what we do."
The goal is to get them to open your PropertyScout submission site, where you can explain in detail what you're doing, which ZIP codes you're interested in, etc. Don't worry about explaining everything to them on the spot.
It's a good idea to get some business cards for this. Put your compensation policy on one side, and the address submission site on the other.
Hand these out to everyone who is interested, and you can pin these on bulletin boards at gas stations, libraries, community centers, etc. Leave them on gas pump handles.
The 'cash4addresses.com' is just an example domain. You can use buy any domain name you want, put it on your card, and change the domain records to point to your PropertyScout welcome page.
Recieving the addresses
Once a bird dog submits an address through your PropertyScout site, it will be instantly added to your PropertyScout dashboard and more importantly your Google Spreadsheet of submitted addresses. You'll get a ton of information with each lead, including the owner's name and mailing info if available. From the spreadsheet, you can do just about anything with your leads.
Paying bird dogs
You can pay your drivers in a number of ways. The safest is to pay them per lead, or per hour. It's common practice to offer a large bonus when you close on a property they send you, but this may be illegal, and can be considered paying a commission on a real estate sale to an unlicensed individual. We can not endorse this popular compensation policy, and we advise that you ask local real estate experts and lawyers about the legality of paying bonuses at closing. Regardless of what you do, make sure you issue the appropriate tax filings to your drivers to keep everything legal.
If you are going to pay per lead, make sure your drivers understand what constitutes a high quality lead. PropertyScout makes it easy to verify that a submitted address is high quality. Compare the picture of the house that's been submitted with the Google Street view image included in your spreadsheet. If the house doesn't match the one in the street view, they may have submitted the wrong address. You can also look at the picture to make sure it's distressed. If the lead is not high quality, it's best to reach out to the bird dog and help them understand what a good lead is.
As far as what to pay them, you'll need to take some time to evaluate the different areas in your market to see how often you come across a good lead. In low income areas with a lot of distressed properties, the leads may not be as valuable. In medium or high income areas, a distressed property might be rare and can be worth more. You might want to adjust your compensation by the ZIP code, but try to work it out so that the drivers are getting paid a reasonable amount for their time. You may want to establish a minimum submission count before a payout, like 50 addresses.
With PropertyScout, all submitted addresses will include the contact details of the bird dog that sent it to you. You can use this for direct one-to-one communication
If you're managing a lot of bird dogs, the best place to interact with them at once is the welcome page. You can give them all the information they need to drive for you from there, including an interactive map with highlighted areas using an embedded Google My Map. Check out this article on setting up your welcome page.