Recently, I had the pleasure of hosting Joe Bodek, a seasoned real estate investor and mentor, on my show. We delved into his real estate journey, his portfolio, and various real estate strategies, including the intriguing concept of creative real estate.
Joe Bodek comes from a lineage of builders and developers, with his grandfather and father being involved in the industry. He initially followed the traditional path of building and developing homes and apartments. However, after his father's retirement, Joe decided to explore creative real estate strategies to avoid borrowing money from banks.
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The Art of Creative Real Estate
Joe enlightened me on the different creative real estate methodologies he has learned and implemented, such as lease options, wholesaling, sandwich lease options, fixing and flipping, and subject-to deals. He emphasized that the creativity in these strategies lies in the ability to negotiate with sellers for the best deal, rather than relying on traditional bank financing.
As a real estate agent, I admit that I am more familiar with traditional methodologies and am still trying to understand the concept of creative real estate. Joe explained that creative real estate allows investors to find alternative solutions for properties that may not have enough equity for wholesaling. He shared how he discovered the potential in these "dead leads" and turned them into profitable deals.
Ethics and Transparency in Creative Real Estate
Joe stressed the importance of involving the buyer's attorney in a real estate deal to ensure transparency and ethical practices. He believes that in the age of the internet, word travels fast, and anyone caught cheating will not last long in the industry. He advises listeners to always involve an attorney when entering into a creative real estate deal and to walk away if the other party discourages attorney involvement.
Realtors and Creative Real Estate
Joe clarified that realtors are not trained in creative real estate strategies and recommends consulting a real estate attorney who specializes in working with investors. He mentioned that he hasn't encountered many deliberate cheaters in the industry but has come across individuals who unknowingly create problems due to their lack of knowledge. He suggests asking for references and reviewing previous deals to assess someone's expertise.
Joe explained the process of a lease option and how he makes money from it. He signs a contract to purchase a house from the owner for $100,000 but then increases the price to $120,000 when selling it. He receives an upfront payment called an option consideration, which is nonrefundable unless he fails to deliver the house. He charges the tenant $1,500 in rent, pays the owner $1,000, and keeps a $500 spread every month. When the tenant is ready to buy, Joe receives the remaining $10,000 from the $20,000 spread between the purchase price and the selling price.
Learn more about the Lease Option Mentoring Strategy.
The Importance of Mentorship and Taking Action
Joe emphasized the importance of having a mentor or coach from the beginning. He also stressed the need for taking action in real estate and not getting caught up in unnecessary details. He highlighted that the real estate business is primarily a marketing business and stressed the importance of talking to people and building relationships.
Our conversation ended with some rapid-fire questions, where Joe expressed his desire to have dinner with John F. Kennedy and his dream of playing guitar on stage with renowned guitarists. The episode concluded with a reminder to keep pursuing dreams and working towards them in everyday life.
My conversation with Joe Bodek was a deep dive into the world of creative real estate strategies. It was an enlightening experience that I believe will benefit anyone interested in real estate, whether they are realtors or not.
Learn more about Joe Bodek's mentoring program by clicking here.
