In this episode, we discuss creative real estate solutions with Joseph Bodek, President of Executive Real Estate Mentoring, LLC. With over fifty years of experience, he details how he’s been successful in both conventional and creative real estate and how he has navigated downturns throughout his career. He highlights the advantages of being in creative real estate even in times of recession and the importance of marketing in the business.
[00:01] – [03:03] From Traditional to Creative Real Estate
- Get to know Joseph
- Tired of borrowing from banks, he decided to work creatively
[03:04] – [12:45] Opportunities in Creative Real Estate
- There are always people out there that have got a problem
- It’s about getting the word out about what you do to find these people
- Ways to find distressed real estate: internet, direct mail, through realtors
- Joseph shares his views on the current market conditions
- Creative real estate does better in worse times
- Creative real estate businesses can prosper by helping other people who are struggling especially during a recession
[12:46] – [17:49] It’s a Marketing and Numbers Game
- Joseph’s goal as a mentor is to make thousandaires and millionaires
- Marketing is the key to success and you should be talking to a lot of people
- There’s no magic script; it’s about working your numbers and working whatever deal comes across your desk
[17:50] – [18:59] Closing Segment
- Reach out to Joseph!
- Links Below
- Final Words
Tweetable Quotes
“There’s always, always deals out there because there’s always people that have some sort of problem that has to be solved.” – Joseph Bodek
“It’s a win-win because the seller is getting their problem solved. The buyer who can’t get in conventionally is getting their problem solved.” – Joseph Bodek
“It doesn’t matter what you say to people. It matters how many people you talk to” – Joseph Bodek
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Connect with Joseph! Visit The Transaction Engineer Mentoring Program website.
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Want to read the full show notes of the episode? Check it out below:
[00:00:00] Joseph Bodek: You know, after you’re in the business for a while, you know your numbers. So you know how many people you got to talk to in order to get one deal. So once you know that, you now have a business that you know is going to make you money no matter what, as long as you hit those numbers. And if you want more, you just up your numbers. And if I can get them to keep it simple like that, then they succeed. The minute they go off into shiny object land, that’s where the problem begins.
[00:00:38] Sam Wilson: Joe Bodek is a third-generation real estate developer builder, creative real estate investor, a mentor, a coach. He’s been in the business for 50 years plus. Joe, welcome to the show.
[00:00:49] Joseph Bodek: It’s good to be here, Sam.
[00:00:51] Sam Wilson: Hey, the pleasure’s mine. Joe, there are three questions. I ask every guest who comes in the show in 90 seconds or less. Can you tell me, where did you start? Where are you now? And how did you get there?
[00:00:59] Joseph Bodek: Okay. Well, I started actually, I’m not the individual that watched the late-night infomercials and bought the course and the rest is history. I’m a third generation, as you mentioned. My grandfather was a builder-developer. My dad was actually one of the biggest residential builders in the country back in the fifties, sixties, and seventies. So I was mentored by him in traditional real estate. And then after working for him for about 25 years, I went into creative real estate, been doing that for about 28 years now, been mentoring for about the last 12. So I’d still do deals out there. And I think I answered all your questions, wasn’t it?
[00:01:38] Sam Wilson: It was good enough. I like the synopsis. Tell me when you said you went from traditional to creative, what does that mean?
[00:01:45] Joseph Bodek: Well, I worked in traditional real estate building and developing ground building houses, running seven apartment complexes, traditional stuff, go to the bank, borrow the money, you know, buy the house or apartment building or whatever, all the specialties, I guess you would call ’em in real estate.
[00:02:03] Sam Wilson: For me, forgive my ignorance here. I’ve kind of gone the opposite direction, or, you know, you start off in creative because you can’t afford to get into traditional. You don’t have the bankroll, you don’t have the net worth or you just haven’t developed the industry experience to go out and buy an apartment complex. A lot of us, myself, that’s how I cut my teeth, was doing subject to, you know, lease options, all those things. But at some point, I kind of stepped out of that. You went the other direction. Why is that?
[00:02:30] Joseph Bodek: Well, I was building houses after a while. I got tired of going to the banks and borrowing millions of dollars and being at their effect. Actually, one of the big things that happened was back in the eighties when the SNLs all called in their loans, if you recall that, I don’t remember the exact year, but was in the eighties.
[00:02:47] Sam Wilson: ’87, I think.
[00:02:48] Joseph Bodek: I watched a lot of builder developers and apartment owners go broke overnight. And I pretty much made up my mind. I wasn’t going to be at the effect of a bank anymore. And that’s when I decided we’re not going to do this anymore and started working creatively.
[00:03:02] Sam Wilson: That’s interesting. How did you scale that business? That’s pretty hands-on, especially things like subject-to-lease options. There’s a lot of moving nuance to that. And I feel like that’s something that’s a very personal transaction versus something like an apartment complex. How did you scale that business?
[00:03:20] Joseph Bodek: You mean scale it in numbers? Is that what you mean by…
[00:03:22] Sam Wilson: Yeah, ‘ ’cause it’s one thing to do, you know, a one-off subject, two deal once a year. But to grow that into something where it’s a meaningful business that produces consistent revenue, that the input to output ratio isn’t necessarily one-to-one anymore. How did you grow that in a meaningful way?
[00:03:39] Joseph Bodek: Well, look, we’re in this end of the business, creative real estate. We’re not really in the real estate business. We’re really in the marketing business. And that’s really the name of the game. We’re in a numbers business. And no matter what the state of the real estate market is in, whether it’s a buyer’s market or seller’s market or whatever, there’s always people out there that have got a problem. They’ve lost their job. They can’t afford to pay their mortgage, or they’ve sold their old house. They’ve bought a new house. They can’t get the old ones sold. All sorts of varieties of problems that they run into. They can’t get rid of the property conventionally for whatever reason. And that’s when people like myself come in and say, look, we can do something that’s a little different. It’s not, traditional. It’s going to have to put a little thought into it and we can get them out from underneath of their problem. So it’s a win-win for everybody. The seller gets out from under their problem. A buyer who could not afford to buy on a conventional methodology can get into a house. And of course, we make money helping both parties out.
[00:04:38] Sam Wilson: Right. Yeah, no, absolutely. Been part of a lot of those types of transactions. And those are certainly, certainly an interesting way to go about it. Who were the people you put in place or what were the processes you put in place to scale that business?
[00:04:52] Joseph Bodek: Well, my personal methodology was working pretty much, it’s the old saying the money’s in the list. So basically, there’s all sorts of forums and, of course, you have Facebook where you can advertise, it’s basically advertising one way or another. There’s all sorts of forums out there where you can post what you do and people will react to that. So it’s really just a matter of getting out in front of people with what’s available on the internet. Now in the old days, when I first started, really all you had was the newspapers and flyers many times. Okay. We’ve come a long. So today with the invention of the internet, it’s really not hard to find people with all the, as I say, forums and Facebook and all the methodologies you can use to advertise out there.
[00:05:36] Sam Wilson: Got it. Got it, really, really cool. Were you able to take what you know of creative finance and do it in on commercial assets?
[00:05:46] Joseph Bodek: Yes. You can do it on commercial assets. It works pretty much the same way. I mean, you’re going to evaluate the property the same way, but all you’re doing when you’re doing creative real estate in one form or another, you’re making the owner of the bank. So you’re working with a, you know, you’re working with an owner of an apartment house that, for whatever reason, can’t get rid of it conventionally the way he wants to. And you just make him the bank and you begin to work to move that property.
[00:06:14] Sam Wilson: How does someone find distressed commercial real estate assets? I know there’s a million methods, but are there any that come to mind that you feel like are particularly beneficial?
[00:06:25] Joseph Bodek: Well, I think, once again, using the internet is probably the best way to find them Another, obviously, direct mail is another way to find them. You can do things like absentee owners, things of that nature, where, and of course, in that agenda, you’re contacting people you don’t know whether or not they have a property they want to sell or whether they have a problem. So that’s not my number one, but you can get up with a realtor, for example, partner up with a realtor. He’s got 90% of all the properties that includes commercial as well as residential out there. So it’s not that hard to find them if you utilize what’s available out there.
[00:07:03] Sam Wilson: Gotcha. Rewind the last 50-plus years in the business. What are some things that you would do differently if you could?
[00:07:11] Joseph Bodek: Well, to be honest with you, I don’t really think there’s that much that I would’ve done differently because I came from a place where I understood numbers. And I’ll tell you why. Between my conventional real estate career and the career that I’m in now in creative real estate, I was in the insurance business for a little while, kind of searching around to make sure I still wanted to stay in real estate and I ran into people there that were the best marketers in the world, bar none. I did not learn my marketing from real estate guys. I learned it from them. And what I found was that, as I say, we’re in the marketing business, that’s what we do. So, I went right for the numbers right from the beginning. That was just my background and that’s what made it all happen. So I can’t really think of anything that I would actually change. Probably doing more numbers would be something that I would change. But other than that, I think my path was pretty good.
[00:08:06] Sam Wilson: That’s awesome. Tell me about a time that you either failed or were on the brink of failure and what did you do to prevent and or overcome it?
[00:08:15] Joseph Bodek: Well, actually, I’ve been wealthy, I’ve been broke. I’ve been wealthy again. So I’ve been to the top and the bottom. And when I did get to the bottom and it’s a long story, but just suffice it to say, I left my element and invested in some things I shouldn’t have done and had to start over again. And I just started back into creative real estate, working, the internet was there at that particular time. And you know, was back in a matter of months, so that’s what I did when I went south I just went back to what I knew how to do.
[00:08:45] Sam Wilson: Got it, got it. I love that. So tell me, let’s talk a little bit more on a macroeconomic scale. You’ve seen a lot of cycles. I mean, you referenced the, I think it was ’87 was the year of this.
[00:08:56] Joseph Bodek: Yeah, that’s right.
[00:08:57] Sam Wilson: So you’ve seen a lot of cycles. You’ve seen a lot of booms and a lot of bust. Where are we today, in your opinion, and where do we go from here, and what are you telling people that you are a mentor and or coach to how are they structuring their portfolios, you know, in a way that seems to make sense to you for based on where we are in this cycle.
[00:09:18] Joseph Bodek: From what I see, I’ve been through two or three recessions. So, what I see, I see this tracking the same way. I don’t know how it’s going to end up, but the way that it’s moving right now, this is a time when people in the creative real estate business can really prosper helping other people because as you know, when you run into these recessions, people run out of money, all kinds of bad stuff happens to good people. And that’s where we come in and are able to get them out of that biggest problem they have, which is their home. So in actuality for people in creative real estate, this is actually a boom. I mean, we don’t like to see it happen, but it does. So I would say to people that are looking at the creative real estate industry at this point, this is probably an extremely good time to get involved. Back in ’08, I can’t even count the deals that I did because people were just, you know, down in their luck, in that particular period of time because of what was going on. It wasn’t their fault, it’s what was going on in the economy. And then back in the seventies, I was through that one as well. So these are good times actually for people in my end of the business. And once again, you have to bear in mind. It’s a win-win because the seller is getting their problem solved. The buyer who can’t get in conventionally is getting their problem solved. And of course, we’re able to make some money helping the both of them. And you know, I got to tell you, I experience a whole lot of thank yous in this kind of a period. So I would tell people, well, look, to be completely honest with you, Sam, I don’t care what the state of the real estate business is. Whether it’s a buyer’s market, seller’s market, recession, I don’t care. I’ve been through them all and there’s always, always deals out there because there’s always people that have some sort of problem that has to be solved.
[00:11:04] Sam Wilson: Yeah. And I like that idea, I guess. But I’m going to quasi-counter it with a further question, just looking for clarification on it. Does creative real estate do better in worse times? And it kind of sounds like maybe it does.
[00:11:19] Joseph Bodek: It does. Absolutely. It does. Now there’s always deals. Don’t get me wrong. There’s plenty. And plenty of deals, no matter what the market’s doing, but in these times, people obviously get into trouble through no fault of their own. They don’t want to go into bankruptcy where many of them go, so we can come in and save them from that problem. And believe me, they’re more than happy to have that happen. So, yes, the answer to your question is in these times, we obviously do better.
[00:11:47] Sam Wilson: Right. And it sounds like you think we’re heading into a much more recession. I mean, that’s what they’re calling it now. I guess I don’t want to, you know, speak things into existence, but, you know, they’re calling it a recession at this point. So it sounds like you think we’re heading just deeper into that and that this will just present more opportunity.
[00:12:04] Joseph Bodek: The fed, I believe, is going to raise the interest rates again next month. They’re talking about it already. They’ve already raised them three times. I remember when the interest rates were 18% so, you know, that was crazy. If you look and see what’s happening out there, the realtors are off, I think 25 or 30%, at least at this point, the mortgage brokers are not getting the applications that they normally get. So all the indications are. The question is, you know, how bad will it be and how long will it last? That I can’t predict.
[00:12:37] Sam Wilson: No, for sure, for sure. Absolutely not. And if you could, I wouldn’t tell anybody if I were you. You’d get in a lot of trouble if you knew the answer to that. Tell me about this. What are some goals that you’ve set in your business and how did you achieve them and what did you do when you did.
[00:12:54] Joseph Bodek: Well, once I got into mentoring, I really stopped doing a lot of my own deals. So I was doing deals with my students over the last 12 years or so which kept me pretty busy, but my goal is pretty simple. I just want to create more millionaires than anybody out there. I don’t know if I can do that, but certainly, it’s a goal that I want to work towards. And at the least, I want to create thousandaires because if you want to be a millionaire, you got to be a thousandaire before you get there. So if I can get people into six figures and even, you know, I have people part-time that I’ve had students that have gotten into six figures. They like their job so much they don’t want to leave it, okay, but they’re making a ton of money in real estate. So my goals are pretty much at this point in my life is to help other people get where they want to go.
[00:13:39] Sam Wilson: That’s awesome. Absolutely love that. Let’s say you’re starting out with somebody that doesn’t know a thing about real estate. What’s the first thing you teach ’em?
[00:13:47] Joseph Bodek: Marketing. First thing I’ve got to learn is marketing. If you don’t have anyone to talk to, you cannot make any money in this business. You know, I get guys, students that come on in here, Sam to say to me, well, how do you do this contract? And how do I dot this I, and how do I cross this T? The only answer I got for ’em is what do you have anybody to write the contract for? No. Then what the hell are you talking about? I mean, what are we talking about here? So anybody that’s coming into this business. The first thing I have to learn is the marketing business. And that’s not very hard because you know, one of the things is they’re looking for magic scripts and, you know, shiny objects and all this stuff out there. And there just isn’t any. I’ve been around long enough that there just isn’t any, it doesn’t matter what you say to people. It matters how many people you talk to. And that’s basically what I teach them. You’ve got to be talking to a lot of people. And if you talk to a lot of people, you’ll make a lot of money. It’s as simple as that.
[00:14:42] Sam Wilson: It is a simple volume game and I think that is something that it doesn’t matter what asset class you’re in, whether you’re doing it traditionally or creatively, you’re buying apartment complexes or we do RV resorts, it doesn’t matter. A simple volume game. The ratio of how many deals have we looked at, how many have we underwritten, and how many we made offers on how many have we closed.
[00:15:03] Joseph Bodek: Gotcha.
[00:15:04] Sam Wilson: Yeah. And, and I think that’s a little disheartening in its own right ’cause I think all of us want that like, oh, but if we had this one special thing we did or that one way we did it and it really it really is, it’s like working out, it’s like going to church, whatever it is, you just got to get the reps in, man.
[00:15:19] Joseph Bodek: That’s right.
[00:15:19] Sam Wilson: It’s not like anything in particular is going to, you know, be the life-changing moment. It’s like, you just, you got to get your reps in.
[00:15:26] Joseph Bodek: Well, that’s one of the problems, Sam, you know. I don’t think that I can mention a student that didn’t ask me where’s the magic script, where’s, you know, all I got to do is say three words and they’re going to buy the house or sell the house and all that kind of stuff. And the fact of the matter is it’s all numbers. And that actually, to me, is a good thing. It’s better than having to have a magic script that you search for because if you know that you talk to so many, you know, after you’re in the business for a while, you you know your numbers. So you know how many people you got to talk to in order to get one deal. So once you know that you now have a business that you know is going to make you money no matter what as long as you hit those numbers. And if you want more, you just up your numbers. If I can get them to keep it simple like that, then they succeed. The minute they go off into shiny object land, that’s where the problem begins.
[00:16:21] Sam Wilson: Right. I like that ’cause it dispels the myth like you said, you know, that, oh, Hey, there’s a magic script. Oh, Hey, there’s X, Y, Z. There’s a particular marketing, you know, trick that you’re going to employ. It’s like, and you obviously got to develop the marketing, what your marketing strategy are, but it is a numbers game and breaking it down to that. It’s both comforting and disheartening, I think, for a lot of people because the only way you’re going to hit your numbers is if you’re disciplined, right?
[00:16:44] Joseph Bodek: Yeah. And there’s another aspect to it as well. One of the big things that my partner, I have a partner by the name of Wallace Zhou the self-made creative real estate multimillionaire, is a fantastic mentor and so forth. And one of the things that we’re trying to tell people is that to be a one-trick pony in this business, to me personally, is a waste of time. You’ve got to be a transaction engineer, which is what we teach. As a matter of fact, our mentoring program is called The Transaction Engineer Mentoring Program. And it drives me nuts when, you know, people get stuff that come across their desk. You know, let’s say you get a hundred thousand dollar fix and flip come across your desk, now we want, you want to throw that away ’cause you don’t know how to do it? What if you get a $50,000 subject to come across your, you just want to throw it away? And that’s what they tend to do. So what we are trying to teach them is that if you become a transaction engineer, you’re going to be able to deal with all of these leads that you’ve been throwing in the trash. And I think that’s the other aspect of it. You work the numbers and then you learn to work whatever comes across your desk.
[00:17:49] Sam Wilson: I love it. I love it. Joe, thank you for taking the time to come on the show today and share with us your journey of real estate, how you started out in traditional real estate now into creative real estate, your thoughts on the economy and just how people can find and create value inside of their businesses right now and really just boiling it down to this is just a numbers game. So certainly, certainly appreciate that. Joe, if our listeners want to get in touch with you, what is the best way to do that?
[00:18:15] Joseph Bodek: Best way would be my website, which is executivementoring1.com
[00:18:20] Sam Wilson: And that is the number one, not spelled out ONE, so it’s executivementoring1.com
[00:18:27] Joseph Bodek: Exactly.
[00:18:27] Sam Wilson: Perfect, yes. Joe, thank you again for coming on the show today. I certainly appreciate it.
[00:18:31] Joseph Bodek: It was my pleasure. Thank you for having me, Sam.
