Stop Wasting Dead Leads: Lease Options That Work

Joseph Bodek (00:00)
I looked at it and said, is really stupid. This makes no sense at all to spend all this money and time and go out and

find all these and then throw 90 % of them out just didn’t make any sense. So I went and got myself a mentor. I always have mentors. I have one right now, even though I’ve been doing this for 40 years.

Cody Crabb (01:49)
Welcome back to the Real Estate Pros podcast. I’m Cody Crabb with Investor Fuel and today joining me is Joseph Bodek. He’s the owner of Real Estate Mentoring USA. Joseph works with investors around the country and today we’re going to talk about lease options and how to turn dead leads into the real deals. And ⁓ Joseph, you threw some numbers at me before we started that I was kind of shocked at. So I’m excited to get people into that and see, get other people excited too about what they’re maybe leaving on the table. So thanks for joining us today.

Joseph Bodek (02:19)
It’s a pleasure to be here. Thanks for having me.

Cody Crabb (02:21)
So let’s give us the quick version of your real estate background. Like how did you end up focusing on this specifically? Because this is a very specific ⁓ thing to dig into and focus on.

Joseph Bodek (02:33)
Well, my background spanned. I’m not the story that you normally hear about watching the infomercial at three in the morning and you buy it and you know the rest is history. I was birthed in the real estate. My dad was actually one of the biggest builders of residential properties in the country back in the 50s, 60s, 70s. my first ⁓ running with real estate was working for him. ⁓ I, ⁓ traditional real estate.

Cody Crabb (02:40)
Yeah

wow.

Joseph Bodek (03:03)
⁓ I ran seven apartment complexes, about 2,500 units. I built houses, I developed ground. He was my first mentor. At any rate, about 25 years after that, he retired, went on down to Fisher Island and I had to go out on my own. And eventually I found my way into creative real estate. And I’ve been doing that for the last 30 years, working with things like wholesaling, ⁓ subject to ⁓ owner financing, lease objects, type of thing.

And that’s what I’ve been, and then for the last 15 years or so, I was getting ready to retire. People kept asking me how do you do this? How do you do that? How do you do the other thing? Next thing I knew I had a mentoring program in place. I hadn’t meant to do it, but it evolved. And I’ve been doing that for the last 15 years.

Cody Crabb (03:49)
Yeah, if I’ve learned one thing in real estate, it’s that

half the stuff you do, you end up doing by accident. That is a very common thing I hear.

Joseph Bodek (03:54)
Yeah,

it was an accident. So I’ve been doing that for, I’ve been, I mentored over, over somewhere over 2000 students in this for about the last 15 years. And that’s pretty much brings me to date.

Cody Crabb (04:10)
Okay, so what is it about mentoring that really caught your eye and made you kind of stick with that so long? I mean, I imagine it’s pretty rewarding to see people get into these things that helped you and your family be successful.

Joseph Bodek (04:24)
Yeah, it sounds kind of corny. mean, yeah, there’s money. You’re going to make money, obviously. But ⁓ to me personally, when a student calls me and says, I just did this deal. I made this. did that. To me, that’s an important thing. mean, that makes my day. The money makes my day. Don’t get me wrong. But ⁓ that makes my day a little bit more when you know that you’re part of something that helps somebody move to another level.

Cody Crabb (04:41)
Yeah.

Joseph Bodek (04:54)
So I like that a lot.

Cody Crabb (04:56)
For sure, for sure. ⁓ Okay, so specifically, what made you first realize that a lot of investors were leaving money on the table?

Joseph Bodek (05:53)
Well, I can show you my own experience real fast, okay? Many years ago when I was just starting, I was doing a lot of wholesaling, which is where most people start in this business. And at any rate, one day I turned around and threw something in the trash can, I happened to notice these, this pile of what are called property information forms. You can see them, there’s about 400, 450 of them here. And…

Cody Crabb (05:57)
huh.

Joseph Bodek (06:18)
⁓ I kind of save them to keep track of what’s going on, but basically it would throw them out because ⁓ they wouldn’t work because the seller wouldn’t take the low offer or there wasn’t enough equity in the property to make the deal work. And this is very common among wholesalers. Well,

Cody Crabb (06:37)
you

Joseph Bodek (06:38)
I looked at it and said, is really stupid. This makes no sense at all to spend all this money and time and go out and

find all these and then throw 90 % of them out just didn’t make any sense. So I went and got myself a mentor. I always have mentors. I have one right now, even though I’ve been doing this for 40 years.

But got myself a mentor and learned a lot about owner financing and such. But what caught my eye was lease options. That just really, really

came into something I really wanted to do. So at any rate, what happened was I went back to these people and as I said, there’s about 400 of them here. This took a year or two to do, but at any rate, out of this 400, 450, there’s 84 of them that I was able to go back. Of course, I couldn’t do the wholesale deal for the reasons I told you, but I could do a lease option because you don’t need a lot of equity in the property to do it.

And you don’t have to worry about making low-ball offers. So there’s 84 of them here. And back in the day, again, I’m talking in the late nineties, a good deal was about $8,000 was about average. So you can do a little math. 64 times eight grand. tell you what, I almost threw in the trash, which is what I had been doing up until I realized what was going on. So my mission in life really is to get with the wholesalers in particular.

But any investor would say, hey, man, why are you throwing this out? What’s the matter with you? Okay. Is your brain turned off? It makes no sense. Because the one thing that true business people do not do is leave money on the table. So I would have left 84 deals, 64 deals on the table had I not gone out and learned a little something, something. And so that’s what I teach. That’s what I teach.

Cody Crabb (08:27)
Yeah.

Yeah.

Joseph Bodek (08:39)
There’s no need to throw these deals away. Now you can’t do everyone, obviously, okay? But you can do enough where you’re throwing away a lot of money and you don’t need to do that.

Cody Crabb (08:50)
Yeah, and like you said, as a business person, that’s sin number one. If there’s money on the table, you take it. Out of those, I mean, had 400, how many did you say, 450 leads?

Joseph Bodek (09:08)
There’s about 450 of them in this pile.

Cody Crabb (09:11)
Okay, and then you said 84 ended up being ones that you kind of went after. ⁓ 64, 64. ⁓ And so ⁓ what kinds of deals did those end up being? Just to kind of dig in a little bit. mean, even if you can just remember one thing that happened.

Joseph Bodek (09:16)
64. 64.

Yeah, they became lease option deals, one of two types. ⁓ One is a sandwich lease option where you’re in the deal from beginning to end. OK. And there’s three paydays in that, ⁓ which is which I really like because I really like doing a deal and having it pay me for as long as I possibly can get it to pay me. So as long as you control the property, you’re getting paid rent because what happens, basically what happens is

Cody Crabb (09:31)
Yeah, yeah.

Joseph Bodek (09:58)
You have an agreement with the ⁓ seller

and ⁓ lease option agreement and you have the right to sublease the property and bring in a tenant buyer. So that one of the three paydays is the tenant buyer is paying you rent. So if you’re paying a thousand dollars to the seller for rental every month and you’re collecting fifteen hundred from the ⁓ tenant buyer, that five hundred goes in your pocket every day.

So as long as you control the property, you got that ⁓ money coming in every month. I like that. Okay. Instead of doing one and done, you go find another one. The ⁓ other ⁓ lease option that you can use is called a wholesale lease option, which works very much like traditional wholesaling. So if you’re losing, you using lease options and you can work with more properties because once again, you don’t have to make low ball offers.

Cody Crabb (11:13)
Yeah.

Joseph Bodek (11:31)
and you don’t have to worry about equity in the property. That’s a one and done. You get it under agreement with your seller. You find a ⁓ tenant buyer or somebody that’s out there that’s looking to just buy properties, ⁓ catch buyers, and ⁓ you’re in and out of that deal very quickly. But there’s only one pay date to that one. And that one I use when there’s not a lot of good spreads. When there’s a good spreads,

know, rental spreads and purchase spreads, I’ll use the sandwich lease option. When there’s not, I’ll use a wholesale lease option.

Cody Crabb (12:09)
Okay, so as you discussed, ⁓ mentoring is a big part of what you do. It really caught my attention that you still have a mentor yourself. What is it that you think having a mentor can do for you, ⁓ even when you’re as experienced as you, ⁓ that makes it a real worthwhile endeavor?

Joseph Bodek (12:22)
Mm-hmm.

Well, look around. You don’t even have to look at me. mean, does anybody know any athlete in any sport that does not have a coach? Does anybody know a musician out there that does not have a mentor telling them what to do? Trust me. Even Eric Clapton has guys walking in there going, yo, Eric, let me show you something you haven’t seen before. Trust me. OK. He needs the man. OK. And show me a businessman that does not have people around them.

Cody Crabb (12:40)
It’s true.

Joseph Bodek (13:02)
⁓ advising them as to what to do. So I’m the same way. I mean, I don’t know everything. And somebody’s gonna come in here and tell me something new is gonna make me some money or make something easier or whatever. To me, to go out there and just ⁓ slop it up forever doesn’t make any sense. I mean, when you first come into the business, you’re gonna slop it up whether you have a mentor or not, because you don’t know what you’re doing, okay?

Cody Crabb (13:06)
Yeah.

Yeah. Yeah,

sure.

Joseph Bodek (13:31)
But once

you know what you’re doing, to have someone to refine what you’re doing that’s been around longer than you. Because let’s face it, when you’re around longer, you may not have gone to school, you know, and gotten the degrees that somebody’s got, but you got life experience. And that’s what mentors are for. They’re there to tell you, hey man, that’s not right. You should do it this way. That’s a scam, don’t worry about it.

And you can’t learn that stuff unless you have somebody that knows what they’re doing and has been around longer than you. You know, I’ve been around a lot longer than my students, so it’s pretty rare that they tell me something I don’t already have heard or know. But it’s not for me to tell them.

Cody Crabb (14:16)
Well, that’s it too.

It’s either you have to make the mistake or you can learn from someone else who’s already made that mistake or who has experience with it. So I think that is very worthwhile because you can avoid so many of your own mistakes by doing that. So that’s a very good point there. ⁓

Joseph Bodek (14:33)
I guess.

Anytime you

can cut your learning curve down, want to do it.

Cody Crabb (14:39)
Absolutely, yeah. So as far as what you do right now, you mentioned to me kind of before the podcast we were chatting about you’ve been thinking about getting back into ⁓ real estate investing. Tell me more about what you’re wanting to do in the future.

Joseph Bodek (14:59)
Well, what I’m doing now is still obviously coach

and mentor students and that continues. But I don’t want to get political, okay? But if you look around, if you read a newspaper or you watch a news station, you can see things are not really good out there, okay? Think 2008, okay? Now we’re not there yet and we may not get that bad.

Cody Crabb (16:03)
sure.

Joseph Bodek (16:09)
But nobody knows what’s going on out there. Nobody. Uh, people are holding on to their Yeah, you know, mean, and nobody knows what’s going to happen. This administration just is, I don’t want to get political, I’ll just say that it’s not good. So this is a time

Cody Crabb (16:11)
Yeah. You also don’t want to wait around until it already gets there. Yeah, I know what you mean.

Yeah, unpredictable.

mean, you don’t even have to be political to say, yeah, it’s unpredictable.

Joseph Bodek (16:31)
Yeah,

it’s just everything’s unpredictable. And you’ve got people that want to move their homes, but can’t for one reason or another. There’s all kinds of reasons. ⁓ And what I do is I’m not a realtor. don’t say, you know, give me your property. We’ll list it and see if we can sell it. I come in after they can’t sell it. ⁓ I have a saying, which is mine, by the way, I did not steal this from any guru. All right.

Cody Crabb (16:59)
Yeah.

Joseph Bodek (17:00)
Sellers want what they want till they find out they can’t get it. It’s as simple as that, okay? They want a lot of money, they want this, they want that, and then they find out after a month or two or three they can’t get it. That’s when I come into play, okay? Because I can get the house sold just not conventionally the way they want to do it, okay? So we’re entering this era now, and I think it’s gonna get fairly bad. ⁓

And like I say, think 2008. ⁓ So I decided that there’s an awful lot of people out there that are going to need help to get these properties sold where they can’t do it conventionally. And that’s what I do best. So I’m going back into the markets and anybody that is I advise anybody that’s doing creative real estate to get back into the markets right now, because it’s going to be it could be a disaster for.

Well, it ain’t so good for sellers right now and buyers. So it’s only going to get worse in my personal opinion. I could be wrong, but I don’t think so.

Cody Crabb (18:08)
Well, so let me just ask you. So what kind of homeowner or investor is the perfect fit for kind of what you do? I mean, and that could be either ⁓ in mentorship or doing some of these lease option ideas that you do. I I’m curious. What’s the situation someone would be in where you would be like, yeah, this is what you should do?

Joseph Bodek (18:33)
Yeah, well, basically, you probably heard the stories that they’re fairly common. You run into a lot of sellers, ⁓ about 10 percent. Let me put it to that way. About 10 percent of the sellers out there, which is millions of sellers, all right, are having a problem. They lost their job. They can’t pay the mortgage anymore. They bought another property. They can’t get rid of the old one. They’re paying two mortgages and it’s killing them.

They got divorced. They don’t want to fight over the house anymore. They want it to go away right now. And so on and so on and so on. These are the people that cannot get rid of their properties traditionally. People that don’t have a lot of equity in the property and got to sell it right away. Realtors won’t list it because they can’t get a commission out of it. There’s not enough equity in the property. So forth and so on. These are the people that I work with. Okay.

Cody Crabb (19:14)
Yeah.

Mm.

Joseph Bodek (19:31)
I can help you move that house, but we’re going to have to do it my way. We can’t do it your way. Okay. So there’s, there’s tons of people out there that need people like me. And so as far as, ⁓ teaching people this stuff, I, I will teach host sales is a great example. Okay. How sailors go out there.

Most wholesalers are one trick ponies. I’m not saying that to be nasty. It’s just what they do. They like wholesaling. That’s basically all that they do. That’s why you get these kind of piles, okay, of dead leads. They just throw them away. So wholesalers, I do mentor a lot of them because if they could just open their brain and go, wait a minute, okay, there has to be more than

just one thing that I can do here, which would be wholesaling, I can make more money. So those are the type of people that I mentor most of the time. People that understand that if you open your mind and understand there’s other methodologies out there, you can make a lot of And help a lot of people, by the way.

Cody Crabb (20:29)
Yeah.

Yeah.

Yeah, and ⁓ I think being open-minded is, mean, open-minded isn’t even the right word. mean, if you don’t know, if you need a mentor and you’re kind of new to this and things, why wouldn’t you be open-minded? I mean, you should listen to anything anyone experienced ever tells you because you don’t, know, what, they know so much more than you. They’ve been in this for so long, so much longer. So as far as like the market and, ⁓ you know,

What does a good deal look like to you out of curiosity? So like, if you were personally looking for a deal in this realm, what would you see that would make you go, aha, this is a good one?

Joseph Bodek (21:28)
Well, the perfect deal to me, there’s two types of people you’re going to deal with, okay? There’s people that want to sell their house and there’s people that need to sell their house. So the perfect deal to me would be when I get a seller on the phone and I ask my wife, selling the house and he’s telling me, well, I want to downsize. I want to get closer to the kids. The house is a little too big. That’s somebody that wants to sell. Now I can do business with them, but a lot of negotiation because they don’t really have a problem.

They can wait it out to get what they want. Okay. But you can, I can deal with them. But when you get a person on the phone that needs to sell, you’re going to hear, well, my wife left me, my kids hate me. I crashed the car up. I lost my job and my dog died. That’s the kind of stuff you’re going to hear. And immediately, you know, okay, you’re the guy. Okay. You got problems. And,

Those are the people I like to work with because basically they just tell me to take the house. ⁓ It’s funny, I tell my students, you know, one day you’re going to run into the first time you hear it. Please take my house. Just do get it away from me. Do something. OK. And they all look at me just like I did when my first mentor told me I was going to hear that. I said, ⁓ you’re full of crap. They never gonna happen. Well, lo and behold, it did, you know, and they literally say take my house.

Now you’re dealing with an individual that will do whatever you ask them to do. It’s a smooth deal. They go very quickly and you don’t have a lot of demands and all that kind of, you know, all that kind of crazy stuff. So my perfect person is the person that needs to sell his house for some reason or other.

Cody Crabb (23:14)
Yeah, there’s never a bad situation when someone’s grateful to you and then also giving you their money. That is a good position to be in, I suppose. ⁓ So as far as, ⁓ you what can someone, so you gave us a couple of little hints, you know, the want to sell versus need to sell. What else can someone listen for that’s like a I need to sell versus I want to sell?

Joseph Bodek (23:40)
geez, I think I covered pretty, pretty much of them.

Cody Crabb (23:42)
Yeah, it’s pretty

clear. I was just wondering if there’s anything else we should watch out for.

Joseph Bodek (23:47)
No, they’re there. I mean, they they I’ve had conversations with people where I had to shut them up because they were telling me so much. mean, I. I had one guy that was starting to tell me about his sex life with his wife and I had to shut him up. OK, I mean, I’m sorry it was bad, but it ain’t my fault. You know what I mean? So you hear stuff from these people that it’ll blow your mind. Some of the stuff that they tell you.

Cody Crabb (24:05)
You’re like, all right.

Yeah.

Yeah.

Joseph Bodek (24:16)
⁓ They identify themselves very quickly, very, very quickly.

Cody Crabb (24:20)
Yeah,

people start to get deep and they start to share personal stuff and it sounds like that’s a big ⁓ indicator.

Joseph Bodek (24:25)
yeah. they’ll…

⁓ believe me, they’re going to tell you a whole lot more than you want to hear. A whole lot more, okay? And I just let them go on and on and on until they’re done, okay? And then it’s more or less, okay, here’s what we’re going to do. Okay, just tell me what to do and I’ll do it. And you know… huh?

Cody Crabb (24:36)
Sure. Yeah.

Small price to pay I suppose.

Small price to pay I suppose for this kind of situation.

Joseph Bodek (24:49)
Yeah,

well, it’s entertaining if nothing else, but you know, it does get a little over the top sometimes with these people.

Cody Crabb (24:55)
Yeah,

sure. All right, so ⁓ Joseph, this has been really great. ⁓ This has been, I think a lot of people are kind of looking at this and thinking differently about what they’ve got on the table here. ⁓ know, they just, sometimes when we get so focused on one strategy, it’s hard to even see outside of that. So this is, I always love when people kind of give you a little, hey, maybe think about this. So thank you so much for that.

So people that wanna connect with you online, are you accepting like mentors right now and how does it work exactly with your mentorship program and what you’re doing now?

Joseph Bodek (25:33)
The easiest thing for you to do would be to go to my website, which is realestatementoringusa.com. That’s realestatementoringusa.com. And on, you’ll see tabs up top and there’s one that’s labeled products. And you can click on that and it’ll tell you all the products that I have there. And then of course you can, you can call me and we can talk about what it is you’re looking to do.

⁓ and see if I can fit that bill for you. If I can’t, I can’t, but I can probably send you to somebody that can. ⁓ but most of the time I can take care of it. And the only other thing that I would say to all of you that are listening that are in real estate is expand your horizons. I don’t care how good you are as a wholesaler. I compliment you for being an excellent wholesaler, but you know what? Don’t make no sense to let that go out the window. Okay. Cause that’s what I was doing.

Cody Crabb (26:30)
Yeah, seriously,

Joseph Bodek (26:32)
Literally,

okay? Expand your horizons. Learn other methodology. Look, that’s why they call it creative real estate. That’s the whole object, okay? So don’t be tunneled into one thing and not look at the other things because you’re losing money. Lots of it, okay? So that would be my advice to anybody out there that’s in the business. And get yourself a mentor to do it because you’ll cut your timeframes down.

Cody Crabb (26:40)
Yeah.

Yeah, that sounds like that’s a big part of what

you believe, yeah.

Joseph Bodek (27:03)
I mean, to go out there and slop it up yourself, you know, when I started back in the Stone Age, okay, we didn’t have the internet. Okay, we didn’t have all this wonderful stuff that you have today. Okay. So we were figuring it out as we went along back then. We really were. But it’s all in place now. And you’ve got more stuff to help you get it done than I could have ever imagined when I first started. Okay. 30 years ago in this particular.

Cody Crabb (27:29)
Yeah.

Joseph Bodek (27:32)
genre.

Cody Crabb (27:33)
Yeah, and now AI is in the mix. mean, it’s only getting to be more so. So I think ⁓ it’s very, keeping, ⁓

Joseph Bodek (27:39)
Yeah. ⁓ and

don’t fool yourself by the way, Cody, with AI. AI is not a human. They haven’t experienced 30 years of deals. AI is good for getting some basic stuff. Get a live breathing mentor. Okay. Do yourself a favor.

Cody Crabb (27:58)
And as I always say when I

talk about AI, yet. You never know where we’re gonna get there. It’s just a matter of when. But right now, I think you’re absolutely right. ⁓ Joseph, it’s been a pleasure. ⁓ If you’ve got value from this, listeners, go ahead and subscribe to this podcast. Make sure you go connect with Joseph online. And ⁓ thanks again for listening today. We’ll see you next time on next week’s episode of Real Estate Pros. Bye, everybody.

Joseph Bodek (28:03)
Yeah.