Real estate wholesaling continues to attract new investors because it lets people enter the market with low upfront costs and minimal risk. One of the most profitable areas within this strategy is working with a rundown house or distressed property that most buyers overlook.
On a recent episode of The DealMachine Real Estate Investing Podcast, our CEO David Lecko spoke with experienced wholesaler Zack Boothe, who has earned over a million dollars a year in this niche. After reviewing those insights and the data from our users, we put together a practical breakdown that shows how to evaluate rundown properties, find owners, and build a process that actually works.
This guide is for investors who want simple steps, clear reasoning, and a repeatable system to turn distressed properties into predictable deal flow.
What Wholesaling a Rundown House Really Means
Wholesaling real estate is a strategy in which an investor finds a property priced below market value, signs a purchase contract with the seller, and then assigns the contract to another investor for a fee. In wholesale real estate, no one buys or renovates the property. Instead, they profit by locating deals others miss.
A rundown house is often the best type of property for wholesaling because:
- It usually needs work
- The owner may be stressed, overwhelmed, or ready for a quick solution
- Traditional buyers avoid it
- Investors see value in renovation or cash-flow potential
The real skill is identifying the right houses and contacting the right owners at the right time.
DealMachine users often start their wholesaling journey by tagging rundown houses while driving every day. That simple habit helps investors find opportunities before they ever reach the open market.
Why “Driving for Dollars” Works So Well
On the podcast, Zack explained that his business centers around a very simple approach: driving for dollars. This method involves exploring local neighborhoods and physically looking for distressed properties. A rundown house can show up in many forms, including:
- Long grass or overgrown landscaping
- Boarded windows
- Piled-up mail
- Damaged roofs
- Peeling paint
- Broken fences
- Signs of vacancy
Zack shared that his team classifies each property into one of four groups. This helps them customize outreach and stay organized.
1. Clearly Distressed Properties
These are the classic rundown houses that show obvious structural or maintenance problems. They often represent the highest potential because owners may not have the time or funds to repair them.
2. Absentee Owner Properties
These homes are owned by someone who does not live on-site. Absentee owners are more likely to be open to selling because they may not be closely watching the property’s condition.
3. Owner-Occupied Properties
These may not look severely distressed, but still show neglect. An owner-occupied rundown house may come from someone facing life changes, job loss, or health challenges.
4. Corporate-Owned Properties
These properties are owned by LLCs or other entities. They may not show physical distress, but corporate owners often make decisions based on investment goals rather than emotion.
Why You Should Add Every Possible Lead
A common hang-up for new wholesalers is questioning whether a property is “distressed enough.” Zack avoids this by applying one simple rule: add the property anyway. If it looks even mildly rundown or receives inconsistent upkeep, it goes onto his list.
Small signs of neglect often point to owners who are overwhelmed or simply ready for a change. When you build a larger list, you give yourself more chances to start conversations that lead to deals.
DealMachine makes this easy by letting investors tag a rundown house in seconds, save the data, and trigger outreach immediately.
How to Contact Owners of Rundown Houses
The next step after creating your list is reaching the owner. This is where many wholesalers either get stuck or use the same method for every type of property. Zack warns against using a one-size-fits-all approach. Instead, he breaks his outreach into different strategies depending on who owns the property.
Corporate-Owned Properties
These are harder to reach because the contact information is not always public. Zack typically starts with direct mail. If you use DealMachine, the Private Investigator tool can help locate deeper data, giving you a better chance to connect with decision-makers.
Absentee, Owner-Occupied, and Distressed Properties
If he can locate a phone number, Zack uses a mix of:
- Cold calling
- Text messaging
- Door knocking
- Follow-up sequences
His team focuses heavily on repetition because most owners do not respond on the first attempt. Studies show that repeated outreach increases response rates and strengthens lead engagement.
Zack summed it up well on the podcast:
“In the driving-for-dollars niche, the money is in the follow-up and precision of your outreach.”
The Role Technology Plays in Scaling Your Business
Zack emphasized that his success comes from a combination of smart systems and reliable tools. He uses DealMachine to:
- Tag rundown houses quickly
- Store and organize leads
- Pull owner data
- Track outreach
- Prioritize high-value targets
For wholesalers working full-time jobs or trying to scale, having a system that keeps everything organized often makes the difference between closing a deal and missing it.
Systematic Follow-Up Creates Predictable Deals
Once a lead enters Zack’s system, his team tracks every piece of outreach. Calls, texts, mailers, and notes are recorded. This helps them measure what works and what does not.
A rundown house rarely turns into a deal after the first contact. Most owners need time to think or reach a moment when selling becomes necessary. Persistent follow-up ensures that when the owner is ready, the wholesaler is the first person they think of.
Should You Wholesale Rundown Houses?
Wholesaling rundown houses can be a strong entry point into real estate investing. It allows investors to learn negotiation, property evaluation, and seller communication without taking on the financial risks of renovating a property.
Here are the biggest advantages:
- Low upfront cost
- High potential assignment fees
- Properties with less competition
- Simple repeatable systems
- Ability to scale quickly
Zack and David both stressed that success comes from recognizing the hidden potential in properties that most people ignore, then applying consistent, targeted outreach.
If you want to build a pipeline of opportunities, a rundown house is often the perfect place to start. Pair a disciplined process with tools like DealMachine, and you give yourself a real chance to grow your income and your confidence as an investor.
FAQ
What makes a rundown house good for wholesaling?
These homes often need repairs and attract less competition, making it easier to negotiate strong deals.
How do I find the owner of a rundown house?
You can use property data tools to pull owner details, send mail, or place phone calls to the listed contacts.
Do I need money to wholesale rundown houses?
Not usually. Wholesaling does not require you to buy or renovate the property.
Why is follow-up so important?
Most sellers do not decide on the first contact. Consistent follow-up ensures you stay top of mind.
