Suppose you are into driving for dollars to generate seller leads for potential wholesale deals. In that case, you might have already stumbled across an app called Dealmachine.
The challenge when driving for dollars often is that you first have to make sure not to drive in the same geographic area several times, wasting time and money. Secondly, you will have to collect and organize the different addresses of the properties you find.
Next, you will have to find the contact information of the respective owners and then do some prospecting using different real estate marketing methods such as, for example, direct mail.
This process can be time-intensive and this is where Dealmachine comes in.
In this article, I reviewed Dealmachine’s different features, how it works, how you can virtually drive for dollars with it, its performance in terms of marketing numbers and alternatives.
What is Dealmachine?
The Dealmachine app helps wholesale real estate investors and other real estate professionals find deal candidates, do direct mailing campaigns, manage seller leads, and track driving routes.
So, while it targets foremost wholesale investors, this doesn’t mean that realtors couldn’t use it.
But usually, properties that are wholesale deals don’t have much wiggle room, so a commission could be squeezed out for realtors or brokers.
But of course, many realtors are also doing real estate wholesale investing.
Actually, it is often recommended to have a real estate license to do wholesale deals.
How Does Dealmachine Work and What Are Its Features?
First of all, you will need to know in which use case Dealmachine is actually used for real estate wholesalers and for what it was actually designed.
And it’s driving for dollars.
The name “Dealmachine” might insinuate that this software generates deals for you like a machine, but this is not the case.
It is basically a support tool for your driving for dollars activities.
So, when it comes to how a real estate wholesaler usually operates when using the driving for dollars method, these are some of the main features:
- Tracking driving routes to avoid driving the same neighborhood several times and adding potential deals to your list on the go.
- Finding out the addresses and seller contact information of the potential deals you find on the street.
- Contacting sellers while still on the street or sending direct mail to the address you found.
- Managing the seller leads for follow-up campaigns.
Dealmachine’s Driving for Dollars
So, the driving for dollars feature prevents you from wasting time driving specific routes in a geographic area twice.
If you work as a team that drives for dollars, it can also display driving routes on everyone’s map in real-time.
This feature also includes some reporting.
It can show you exactly where, when, and how many potential deals each person in your team (should you partially outsource or delegate driving for dollars) added.
This can help you determine what to pay them for their efforts.
This feature also notifies you when you want to re-drive in a certain zip code area.
It marks certain areas in green, yellow, and red color codes.
Finally, you can also export the driving for dollars data to an excel sheet to know your costs for tax purposes.
Because it fits within this context, below, you will find some general tips for identifying potential wholesale deals when driving for dollars.
So, you want to look out for…
- Overgrown bushes
- Overgrown grass
- Broken windows
- Missing gutters
- Bad roofs
- City or county notice
- Fallen trees
- Junky houses
- Outdated items
- Abandoned cars
- ‘For rent’ signs
- Big empty lots
- For sale signs
- Boarded-up properties
- Inspector work orders
Dealmachine’s Automated Owner Lookup
Once you are on the street and find a property that could be a potential deal, you can add it easily within the app, and Dealmachine will find out the contact information in a few seconds.
How does the app do it?
It searches with the help of 3rd party data and public records to draw from there the potential seller’s name, mailing address, mortgage information, and more.
The next element of the automated lookup feature is the so-called “Enhanced Search.” This function enables you to also get every additional mailing address, phone number, and email.
Dealmachine claims to have 96.5% accurate owner information.
Dealmachine’s Direct Mail Campaigns
Now, once you have collected a bunch of potential seller contact information, you move on to the real estate marketing part.
This is where Dealmachine’s direct mail campaigns come in that allows you to send targeted direct mail.
This includes unique and proven postcard templates you can use, including pictures of the owner’s property.
You may already know that using a picture can increase the engagement rate.
But you can also design custom postcards from scratch should you want to.
This might be helpful if you already have a proven design and copy that might beat what Dealmachine offers as postcard templates.
It might actually not be a bad idea to test your own designs, so you stand out from other wholesalers using Dealmachine.
I already covered the importance of following up more in-depth in this article.
So, another positive aspect of Dealmachine is that it includes an automated follow-up system for their direct mail campaign feature.
The direct mail feature also reports when mail is delivered, and it automatically updates a lead’s status for returned mailers.
Dealmachine’s Real Estate Lead Management
The last feature of Dealmachine is real estate lead management.
When you are on the street and add a new contact into Dealmachine, it will be automatically saved in their customer relationship management part of the software, which is updated automatically.
You can also delegate specific tasks related to contacts you have in the CRM by just mentioning selected members of your team.
If you want to filter the properties you found, you can also add tags, making it easier to sort them and market to them.
Dealmachine Demo and Tutorials on YouTube
While researching Dealmachine, I found several helpful demos and tutorials on YouTube.
So, the features mentioned above will become a bit clearer if you watch them.
So, here are three videos I found to be helpful:
Dealmachine’s Driving for Dollars Extension
You don’t even have to jump into your car to physically drive for dollars when you use the Dealmachine Google Chrome extension.
The only thing you need is to first install the Dealmachine Google Chrome extension and then log into your account.
The next thing you want to do is head over to Google Maps street view and “drive” with the orange man icon in a certain neighborhood, looking out for the distressed type of properties I already mentioned above.
Once you find one, you can pin it on the map to get the exact location.
Then, you click on the property, so the address is displayed.
Now, the Dealmachine Chrome extension will have access to this data which means you can click on the button “Add to list” within the extension. The property should be added to your list.
This process is better illustrated in a video, so check out the following video below:
Dealmachine has a basic plan for $49 and a professional plan for $99 per month. The enterprise plan costs $2990 per year.
Here is the overview of the different plans including features:
|Basic for $49/month||Professional for $99/month||Enterprise for $2990 per year|
|Dealmachine CRM||Every feature from the basic plan||Every feature from the professional plan|
|500 street leads per month||1,000 street leads per month||10,000 street leads per month|
|1 Team member with full access||2 Team members with full access||30 Team members with full access|
|Access for 1 deal finder on your team (limited access)||Access for 2 deal finders on your team (limited access)||Access for 300 deal finders on your team (limited access)|
|Mailers for 55¢ per piece||Route tracking||Mailers for 49¢ per piece|
|Skip tracing for 14¢ per contact||Google Chrome extension||Skip tracing for 12¢ per contact|
|Ballpoint letters (a special template) for $1.75 per piece||Ballpoint letters (a special template) for $1.47 per piece|
|Corporate skip tracing for 28¢ per contact||Corporate skip tracing for 24¢ per contact|
|Mobile map||Custom landing page and training portal for dealfinders ($1,000 onboarding fee included)|
Crunching Some Driving for Dollars Marketing Numbers
Since driving for dollars is not an internet-based method to generate leads of distressed property owners, it is more difficult than to find, for example, performance data about SEO or PPC marketing.
So, I researched the BiggerPockets forum and found several wholesale investors that reported on their driving for dollars numbers.
These are the most important I could find which I will distill afterward:
“With MY list, my close ratio is well over 25% (I’m embarrassed to say how high).”
“Go BIG. We had to make approx 5,000 calls to knock out the first deal. I’ve dabbled with it and my rough numbers are about 28 houses per lead.
I count a lead as someone that agrees to a follow-up call to receive a cash offer after the initial prospecting call.”
“It’s been a while since I drove for dollars, but about 3.5 years ago, my ratio was 40 vacant house lead to a deal.
This was when I was still learning A LOT about qualifying leads, negotiating, and truly running down leads.”
“Wholesaling is hard; response rate is going to be 1% on a good day. 200 letters is likely not a large enough sample size.”
“Most are tire kickers who don’t need to sell but I’ve got 3 good leads in 30 days sending 20 letters a day.”
“What I do when I drive for dollars is write the address down, and then look them up on the county tax assessors website and get the owners information.
If the owner is out of state and/or owes taxes, they go to the top of the list.
I then skip trace these owners and get their phone numbers and send them a voicemail through slybroadcast and send them a follow-up text a day later.
Summarizing the Marketing Numbers of other Wholesale Investors
If you look at all the numbers the wholesalers above provided in the forum, you soon realize that results have a pretty large range.
The closing rates range between 0.02%, 2.5% and up to 25%.
The closing rate in this context means the percentage of homeowners of all the ones contacted that made a deal.
These significant range differences look quite normal, since the closing part is usually related to sales skills or how you can persuade over the phone.
And not everybody has the same skills.
The closing rate average of these far apart numbers would be 9.17%
In terms of response rates in the context of sending out letters, the numbers are not that far apart. Here, the range is from 0.5%, 1% to 3.6%.
So, that makes an average response rate of 1.7%, which is lower than 6.6% from my article about real estate marketing with Doorhangers.
So, three data points from the bigger pocket forum might not be enough to get an accurate number in this context.
The response rate changed significantly to 70% when instead of sending letters voicemails were left.
But this is still better than the 1.7%.
So, you might actually increase this response rate by actually calling directly and having a live conversation.
And this is where Dealmachine could add significant value if it added an additional feature that made it possible to send voicemails in the same way you can send direct mail from the app.
So, because of the lower response rates of direct mail, I would recommend using this feature of Dealmachine only if you don’t reach the owner directly over the phone and can’t leave a voicemail.
3 Dealmachine Alternatives
Dealmachine is not the only software product out there that can help you in finding real estate wholesale deals but it seems to be the only one that has its focus on supporting the deal-finding method via driving for dollars.
Nevertheless, you will find below three alternatives that support other deal-finding methods for real estate wholesale investors.
1) BirdDog Bot
This one comes closest to Dealmachine, but still isn’t direct competition.
It rather supports the process of finding deals within the well-known online real estate market Zillow.
BirdDog Bot is a cloud-based software that can find fixer-upper properties by taking into consideration your investment criteria.
Additionally, it can run your investment criteria numbers through any property listed on Zillow. This search filter will let through only the ones that comply with your investment criteria.
Here you get to the official BirdDogBot website where you can learn about examples of how this software already works for many other real estate investors.
I almost didn’t include Privy because it is rather a type of software that can show you where the market action of real estate investors is happening.
So, it could actually be a tool that you could use in a complementary way to Dealmachine.
You first find out where the hot areas are, and then use Dealmachine to drive for dollars in this particular area you found with Privy.
You can also further analyze the deals you find with it.
So, overall, it’s rather an application on the analytical side of things rather on the deal-finding side, although indirectly it does help you with that by supporting your deal analysis.
Auction.com is focused on discounted residential bank-owned and foreclosure deals.
Currently, they have about 30,000 auction properties in their inventory.
This might not necessarily be the optimal tool for wholesale real estate investors, since foreclosure deals might not give you the profit margin for a good deal compared to finding pre-foreclosures, for example.
But fixer-uppers and buy and hold investors or investors that are both will get more value out of Auction.com.
But since it’s also a tool that helps you find deals, I needed to mention it.
How Many Properties to Add to DealMachine to Get 1 Deal?
Since I am also interested in marketing performance, I found it important to ask how many properties you need to add to the DealMachine app to get one deal.
After we have this information, we can calculate some key marketing performance indicators.
The company Dealmachine itself gives the following answer to this question:
“Recommended goal: Find 200 properties as soon as possible. Set repeat mail for every 21 days. Let the mail repeat for at least 3 times. That is what it takes to get 1 deal on average across the US.”
Let’s be conservative and assume that when DealMachine means “one deal,” it means one qualified lead that you could close with the right sales skills.
With a closing rate of 27% on average, you would need 3.7 of these leads until you make a sale or close a deal.
If you get one of those leads out of 200 properties, this means a lead conversion rate of 0.5% (1 deal/lead divided by 200 properties).
If you want to achieve the goal of one closed deal per month, you would need to work 740 street leads from Dealmachine (3.7 street leads divided by 0.5% lead conversion rate).
This means you would need to go with the professional pricing plan for $99 per month that gives you 1000 “street leads”.
From 1000 “street leads,” you can then expect 5 deals/qualified leads with a 0.5% lead conversion rate. And if you close at the closing rate of 27%, you would close 1.35 deals on average (5 deals/qualified leads multiplied by 27% closing rate).
On top of the costs, you will need to add the mailing costs for 55 cents per piece 3 times. This would mean total mailing costs of $1,650 (55 cents x 3000 mailers).
The total cost to close 1.35 deals per month would be $1,749. To break it down to one closing, it would be $1,305 as costs per sale.
Is Dealmachine Worth It? – Conclusion
So is Dealmachine worth a try?
If you are specialized or focused on driving for dollars to find wholesale deals? Then Dealmachine is definitely worth a try.
With the calculated cost per sale of $1,305 in the professional pricing plan, you will likely have a positive ROI unless you specialize in properties with sales prices below $100,000.
You could benefit from it even as a realtor because driving for dollars is not only a method exclusively reserved for wholesale investors.
Realtors do this as well to find potential seller clients. However, the properties they are looking for are usually not distressed ones.
So, with the help of Dealmachine, they could look up property owner contact information and then approach them to sign a potential listing contract.
Here you can learn more about Dealmachine.
This article has been reviewed by our editorial team. It has been approved for publication in accordance with our editorial policy.