Real Estate Success is SERVICE - Chicago's Sal Becovic on Building a Legacy of Community Investment

[00:00:00] Speaker A: Foreign. Welcome, welcome. Real Estate Chicago Style podcast. I'm your host, Joe Smazel. I'm a broker and partner at Interra Realty. We're a boutique real estate brokerage in Chicago focused on selling apartment buildings in Chicagoland. Stephen from Full Bars Media is producing this for me. Shared that we've had over 2300 people listen or watch so far in the first month with number which I have absolutely no context for. But it, it might stink, but it sounds like a good start. So appreciate everybody for checking it out. Share it with your friends and help your boy get $100 million deal like the other Joe that podcast. Right? So I'm stoked for this episode. We've got one of my favorite guys in the real estate business, Sabakovic. Welcome, Sal. [00:00:57] Speaker B: Thank you for having me. This is the Joe Show, AKA the Joe Show Chicago Style. All the podcasts out there that have a Joe, there's no Joe like this one. Chicago style. [00:01:11] Speaker A: Here we go, man. [00:01:12] Speaker B: And Joe, one thing before. I know we've been wanting to. So we've had countless of conversations over the years and we said after every conversation we say we gotta have a podcast. [00:01:22] Speaker A: Right. [00:01:23] Speaker B: And then all of a sudden you call me saying I gotta do a podcast. You're doing the podcast. I love, I love so far everyone you've brought in. Very insightful and I'm looking forward to this. And I think we should always preface every podcast, especially in our business, after the week we're in right now. Because I think, I think, I think these, these conversations we're gonna call them. Conversation. Yeah. Are great time capsules that if we can go back here five years from now and say what time period was that that we were in? We are. Today is April 10th. We'll reference the date. I know this probably go on a couple weeks or so. Right. Roughly April 10th. We are in tariff nut week with Trump with the Trump tariffs and the revoking of the tariffs and the. And the markets went, they crashed yesterday. They jumped 10%. Bonds went, went 40 bips up, 40 bips down. So as of today, the five year which is something that a lot of our operators that place debt is 4%, 4.0% and the 10 years, 437. [00:02:34] Speaker A: Yep. [00:02:35] Speaker B: Where it was just two, three weeks ago was 450, 460. So rates have come in. So all this Trump stuff has actually been beneficial for us. [00:02:43] Speaker A: Yeah. [00:02:44] Speaker B: Rate wise. [00:02:45] Speaker A: But we'll see, we'll see what goes where everything shakes. But I think it's smart to kind of put a timestamp on this thing because we'll talk about things that are a little bit into the weeds, that are a little bit time specific and then we'll talk about some high level, just business planning, how you think about the business. But we're going to talk a little bit later about how you kind of balance that, you know, that eye to the macroeconomic conditions with your, you know, and that's what's your animal spirits. [00:03:08] Speaker B: There's that and there's also. [00:03:10] Speaker A: Before we get too far, I gotta tell everybody who you are. [00:03:12] Speaker B: Okay. [00:03:12] Speaker A: Because I know a lot of people know you, I take for granted. But you know, okay, this will give you some credibility. [00:03:17] Speaker B: I'll, I'll go ahead. [00:03:20] Speaker A: Sal is the president of Bovic, which is a family owned real estate firm that's rooted in the north side neighborhoods that they work in today. Rogers Park, Edgewater and Uptown. I love this from your website. We're dedicated to fostering the diversity, integrity, beauty and vitality of the neighborhoods. We do this through continually, continuously investing in our buildings and improving residents, homes and lives. There's a lot in there that we're going to kind of get into more through the conversation, give some context about s portfolio. He took the reins in 2003 and has grown the firm from a portfolio of 400 units to over 2000 today across over 70 buildings. I believe so. Very important part in those neighborhoods which have been home to him for a long time, into his business. So cool to have you on it really is. Appreciate the cool you've accomplished. [00:04:13] Speaker B: Thank you. You know, thank you. [00:04:14] Speaker A: I might toot your horn a little bit, but I'm gonna. After we're off the camera, I'm gonna. [00:04:18] Speaker B: Thank you for the chat. Thank you for the context. But you know what keeps me, what keeps me straight is the song that we kicked off our podcast with is this idea of Bob Dylan. He's in the zeitgeist now with his movie and I think the great Kendrick had the Be Humble song of the most of the culture right now. Be humble, the song of the 60s and 70s, I think late 60s is gotta serve somebody Bob Dylan. And if you listen to that song in our business as an owner of properties that are over 50, 60, 70, 100 years old, there's a service of our residential. Yeah, there's a service of that property, there's a service of that neighborhood. And then guess what, there's also the service of our banks and there's the service of our people. And it becomes this. Everyone's got to pay Somebody kind of thing. And I kind of want this conversation. If someone's listening to this conversation. I think there's three audiences. I think typically the first audience you want this to be is going to be our people of our business, people. [00:05:30] Speaker A: Of our folks that we see at. [00:05:31] Speaker B: The neighborhood events providers in this business, brokers that. That provide and that also manage and own apartment buildings in. In the city. But there's other audience that I hope listens to this as we have. As we dig into this conversation is the policymakers of the city. [00:05:50] Speaker A: Yeah. [00:05:50] Speaker B: When it comes to the policy and also our residents. I want my resident to. One of our residents or our. Any resident out there who wants to do a search because, you know, it's easy to search. I mean, this is going to be on YouTube and podcasts and everything is. I want people to understand we have a connotation of the greedy landlord. We have a connotation of. There's some connotation and then there's. We're in the period of label making. We're shooting labels at people and trying to define people. And my hope is this conversation we can really dig in and get a sense of how important our work is and how important our work is to the. To. To the. To the city overall. I love your boost. You're a booster of the city where I'm not. We're not. I'm not allowed to say anything negative about. [00:06:39] Speaker A: That's absolutely right. [00:06:40] Speaker B: Okay. You said that. There's one. You're not going to crap talk. [00:06:45] Speaker A: To be honest, I don't have to worry about with you because I know that you're in. You're a starch proponent of the city and, you know, advocate for positivity in the city too. [00:06:53] Speaker B: I'll say. [00:06:54] Speaker A: But that is my first, My first advocate. [00:06:56] Speaker B: The first thing I'll advocate for is my neighborhoods. And I, We're. We operate in three neighborhoods. I was Albanian Muslim. Muslim kid, went to Catholic school, St. Gertrude in Edgewater. The Holy Trinity. [00:07:10] Speaker A: Yeah. [00:07:11] Speaker B: Uptown, Edgewater, Rogers Park. That's who. That's what we focus on. [00:07:14] Speaker A: Yeah. [00:07:15] Speaker B: And we'll go in the story. Yeah. And there's a story which I really. [00:07:18] Speaker A: Yeah, we're going to. We're going to get into the story, which, you know, I'm not. Don't take this as me being dismissive. Quite the opposite. I cannot wait for you to share the story of your family. Start in the neighborhood. But before we get there, we're gonna, we're gonna do some rapid fire. [00:07:31] Speaker B: Okay. [00:07:31] Speaker A: Okay. I'm not That's. Everybody says they like the rapid fire, so I'm not letting you off the hook. [00:07:35] Speaker B: Okay. [00:07:36] Speaker A: What'd you listen to on the way here? Rapid fire. [00:07:40] Speaker B: I remember Economist. Okay. The Economist is a weekly news magazine. It talks about. Highly recommended, great analysis. They're kind of a middle ground. Kind of. They talk about everything from politics to finance, economics, culture. Very good magazine. Economist. The Economist. [00:08:02] Speaker A: Favorite Chicago. [00:08:03] Speaker B: I listen to it. I don't read it. There's a magazine. But they also, they have, they have a. They have a. [00:08:08] Speaker A: They do it in the car. Exercise, reading, reading it. Favorite Chicago coffee shop. [00:08:16] Speaker B: You know the one that I mean. Metropolis in Edgewater. And let me say. I know it's one, it's one word. Can I give you a little context on Metropolis? [00:08:23] Speaker A: Go ahead. [00:08:24] Speaker B: Metropolis. And here's the point of how long. [00:08:26] Speaker A: We say that the scones are the bomb because they're good. [00:08:29] Speaker B: They're good. You get it. I'm not here to boost the idea beyond $4, $5 coffee. Which, you know, the older I get, I just make the pods. But, but it's the idea of how when you create. And I think our job as an owner of a property is to be. And I feel that's the first thing that needs to happen is good housing and then good solid housing and then all of a sudden that's where everything else comes from. Coffee shops in my neighborhood. Metropolis came in 2003 in Edgewater on Granville. [00:09:03] Speaker A: Yeah. [00:09:04] Speaker B: And that area in Edgewater for many years in the 80s and 90s went through some challenging times. And we, and we'll tell a story about that. But, but to see when you start having coffee shops that start adding to what you, what you're doing, that's that, that circle. It's all part of self reinforcing circle that so I'm a big part of. And they have all the community. Right. [00:09:28] Speaker A: I mean it really is. You talk about, you know, restaurants, coffee shops, housing, it's all part of the ecosystem, part of what makes a neighborhood a neighborhood. What would you be doing? No. Okay. I'm not skipping ahead of that Favorite. [00:09:40] Speaker B: Pizza place, Hole in the Wall. And we got a surprise. Ggos. [00:09:46] Speaker A: We're gonna do a little Dave Portnoy later. [00:09:48] Speaker B: Someone who grew up in Edgewater. The pizza. That was my go to GGO's Hole in the Wall right off of Broadway 45, was it 4700 Broadway. [00:09:59] Speaker A: 4650 something. [00:10:01] Speaker B: A Hole in the wall. You go in great people. It's been around 30, 40 years. They do like A New York style slice. Yeah. And we have some also. You cut it square. You didn't do slices. You did squares. [00:10:12] Speaker A: Which is fine. [00:10:13] Speaker B: That's fine. Yeah, you're right. We're gonna share with everybody. [00:10:17] Speaker A: I just told them, give me the Salbukovic. They did the cheese. Oh my God. Extra crispy. [00:10:21] Speaker B: Listen, I'm 46 years old. I'm not by now, I'm not frequenting it the way I did. All right, well, no doubt they forgot me. [00:10:31] Speaker A: What would you be doing if you weren't in real estate? Because it's hard. It's hard to. If I imagine doing anything other than. [00:10:39] Speaker B: Once again talking about, we're going to talk about my family story and what the reason why I'm doing what I'm doing now. But if I didn't have the kind of gravity of the work and the purpose of the work, I went, I studied broadcast journalism and Northern Illinois University. So I. And then I got into media management. And you know, I would, you know, by now with the way the media landscape has gone, I'd probably open up a YouTube channel and do reviews or something. [00:11:07] Speaker A: There you go. [00:11:10] Speaker B: That's my background. It would be something managing the media as opposed to in front of the camera. It'd be more managing an operation, most likely. [00:11:17] Speaker A: Cool. Yeah. Favorite intersection or corridor in the city. [00:11:21] Speaker B: I. I've listened to this show from the other guys and there are a lot of the Damon. The Damon and Logan Square. The Damon and what was it? [00:11:28] Speaker A: The Wicker Damon and North Damon, North Avenue, Milwaukee. [00:11:31] Speaker B: And to me though, we have one property in Logan Square in that NE corridor, Broadway and Lawrence. There's nothing when it comes to the culture of this city. Yeah, you have the Green Mill, you have the Riviera, you have the Aragon. When it comes to the culture of this city, it's hard to find any corner that has affected the culture of this city more than that corner. And so, yeah, put me down for Broadway and Lawrence. [00:11:57] Speaker A: I like it, man. Redline, close to trains. All right, plug. This is the last rapid fire plug. An up and coming Chicago real estate person that you feel deserves a little love. [00:12:08] Speaker B: Okay, well, I'm 46. I got eight years on you. [00:12:11] Speaker A: But you're not up. [00:12:12] Speaker B: I got, I got eight years. [00:12:13] Speaker A: You've come up. You plug in yourself right now. I'm just messing. [00:12:19] Speaker B: I'm not gonna plug you now. [00:12:21] Speaker A: I'm done plugging you. [00:12:23] Speaker B: Your is a young guy about 7, 8 years ago I saw in this business and we never did deal, but all of a sudden he he did enough work and he brought me a few deals and the way he was managing me was finesse comfortably not and. And seriously Joe schmazel. I'm sorry I have to appreciate that and you know by now I'm gonna surprise. This office isn't called Jotera Realty. [00:12:49] Speaker A: No. [00:12:51] Speaker B: I'm just gonna cause problems with you right now. This place should be called Joe Terra Rail after what you did last year. How much 150 mil. You better not cut this out. The only deal you didn't sell. [00:13:05] Speaker A: Yeah. Dickens Courtyard man. [00:13:08] Speaker B: And I'm glad. And I'm glad I didn't. I know we and we'll talk. [00:13:13] Speaker A: We're not going to cut it out because it's real. [00:13:15] Speaker B: It's real. [00:13:16] Speaker A: We're pro Chicago just to get us. [00:13:18] Speaker B: The only property was And I have nightmares that I'd sell properties. I. I woke up. I'll wake up in the middle and I say there's one particular moment I wake up in the middle of the night and I say I. I had a dream I had sold a property. I woke up because that's not our model and we'll dig into that. And I. I said to myself what I sell it. Is there some kind of omen? Is it like you know you only you would sell from like some level of distress, some level of like serious life event or moment. And I was trying and that whole day messed me up. I'm thinking why did it wasn't this particular one that we were talking about Logan Square and the reason why we're looking at that. And now forget about it. After all this ordinance stuff which we'll probably talk about later. We might a tad on it. The idea of policy for the policymaker I think we have to probably touch on it is we. I looked at it because I. I never had interest in growing that supply in Logan Square. It was one of the legacy properties that my parents. That my parents acquired. And that story I can't wait to tell. But we decided to obviously the market wasn't where we wanted to be and we're just. We'll have property in Logan Square. [00:14:27] Speaker A: Yeah. All right. We've kind of. We've kind of alluded to it a couple. I want you to tell the story of your folks and I'm going to give a little context before you do is I've known Sal for you know, like you said, 10 years or so. Have a close relationship. Had an appreciation for kind of the. The foundation of the family. But recently, you know I was lucky to attend the 50 year celebration of the family business. And truthfully, I wasn't like that night. I just like wasn't really in the mood to go to an industry event. But I was like, I want to go. It's that, you know, this is, you know, somebody who I really like. I want to go. And I came home, I was like, that was very inspiring. Not tooting your horn. Like not, you know, this isn't like just for the sake of. Appreciate that for gassing you up. But it was very inspiring. So share with us what, tell me. [00:15:19] Speaker B: What inspired you the most. [00:15:20] Speaker A: Hearing, you know, I think a lot of people would see you today having this portfolio, being a second generation steward of the family business and somebody who's kind of had your foot on the gas the whole time, but not have a full appreciation for what it took for your folks to. To provide that base, you know, provide in like how they came here. I'm not and I'm not going to tell the story. And then not only for the business that you are the leader of, but you're two. I mean you have two brothers who have separate business lines who are also wildly successful in real estate. And it all started with, you know, this. That's what insp. [00:16:01] Speaker B: It all started. I got tell you a story. We've been okay. Once upon a time, there was a union painter and an office cleaning lady. 1968, after three years of living in France. Paris, France. That union painter, Hussein Bakovic, My father always never felt Paris because from. From before Paris it was Yugoslavia because we're Albanians living in Yugoslavia. Now it's Montenegro where we are. And that union painter had a painting job in Paris. And that office cleaning lady did some odd work in Paris. 1968, Paris. And that was a crazy time, 1968, in Paris too. But my. And my father, that union painter was waiting for his paperwork for years, two, three years because I mean if he could cross the border, he would have already crossed the border. That's why anyone that talk about I did it the right way, you did it the right way because that was the only way you can do it back then. But that's why I don't fault anyone who tries to from Mexico and from Canada and all the. So anyways, we're getting into that talk. Let's get out of there. But he waited for his paperwork, got his paperwork. November 1968, very volatile time. So they moved into Chicago uptown for five years. He rented five years. Right away he got a job and one of his. And to this day I Love it. He goes to. We live in the city. And he'll drive by and you'll see Lake Point Tower, you know. You know, Lake Point, right east of the only one. And here's a guy. And here's a guy. And I want to talk about him objectively because if I get. If I don't, I get. I start getting a little of my Getting butterflies and. And get a little emotional. Is this is. And to see a guy, to see that ethic, I. And to see pride. Because in 1968 is when that building came up and that was a big, big incredible. I mean, it was kind of controversial. [00:17:58] Speaker A: Because they figured out a way to build it up Lakeshore Drive, sort of like podium. That was like. Yeah, yeah. [00:18:04] Speaker B: So that building, that curved building, black for a lot of people listening. And there's the younger people out there. So I think it's important to know how important that building was to the city, how a big deal it was to the city. And. And my dad mentioned. And. And he said I used to work at that building. I painted at that building. And. And after what he's been able to do and the kind of. The work he's been able to do as a businessman and for him to show the kind of pride that. To remember he. And he came in when he's 28 years old, in his late 20s. So anyways, to show that it's just. So it just go back to the core of like what makes. The gratification of the work and of the craft. [00:18:43] Speaker A: Yeah. [00:18:43] Speaker B: And the pride that he had to work in that building, which was a big deal building. Right. So anyways, five years they lived in uptown rented. Right. In Clifton. Right where Truman College is now. That used to. Truman College was right there. Yeah. Further on the other side, we're Truman Colleges on the north side of the south side of where the target is. Behind the target there. [00:19:11] Speaker A: Yeah. [00:19:11] Speaker B: And they lived there at that time. There are some old apartment buildings there and there's a lot of Montenegrins that moved in. That's why we have just a. A good community. And they all kind of almost overtook the building. Right. In the late 60s, 60s, 68 all the way. 673. And for five years my mom would take the train and work at 300 North Michigan. Right, right, right here. Right here. She'd be office cleaning lady. And my dad was a union painter, so he would work for. He would. Local one. We would paint. Paint across the city for five years. And then after five years and they would rent and there's this community of other Montenegrins. And they just built a great, very, very vibrant community. And to this day when they talk about it, how important it was to be able to get them. Get these new people that they didn't know many people. [00:20:03] Speaker A: Yeah. [00:20:03] Speaker B: And after five years, my dad, that union painter, someone brought up an idea. There's an apartment building in Albany park. And, and at that time Albany park was. It was about. It was a courtyard kind of walk up building. Hundred nineteen circa nineteen hundred built. [00:20:22] Speaker A: Yeah. [00:20:22] Speaker B: And. And. And my dad's like I'm tired of paying rent. And he's. My dad was always very motivated and just there's a level of vision and ambition he had. Yeah, he didn't have any college, he didn't have any, he didn't have any education. So no education. This is just a hard working common. They didn't have education at that. After the 1940s in Montenegro, Yugoslavia there was no education. The schools were all recovering from World War II. So anyways the idea is that you know what can I buy it on a purchase mortgage? I'll pay. And he saved money. He was very frugal. So this is early 73, 1973. So he's 33 years old. [00:21:05] Speaker A: Yeah. [00:21:05] Speaker B: And my. And. And at that time he had two kids. I wasn't born yet and my other. My younger brother wasn't born and he went ahead and did a purchase mortgage because at that time getting debt for properties in our neighborhood, you couldn't get that. You couldn't go to a city, a Chase or Marquette or whatever. You know, pick a, pick a bank. [00:21:25] Speaker A: Yeah. [00:21:25] Speaker B: You can't play. No, I've never done deal with it. But anyways, I'm just, I'm just. Anyways any bank out there? So he did purchase, purchase mortgage, put a little equity down. It's like the way this is going to work is I gotta live in there and then the idea is I'm gonna live in there. And then the residents, they all take care of the building because what's. What I do. Yeah, but it was kind of funny. My mom tells a story, he was a painter, but he didn't fix stuff. [00:21:51] Speaker A: For a little context though, this is all this is. And we're doing. [00:21:54] Speaker B: Are we doing the Joe Rogan style? Is this gonna be three hours? Right. Because I can really do that. [00:21:57] Speaker A: We got somebody else pizza. We hold him over. But okay. [00:22:02] Speaker B: Ye. [00:22:02] Speaker A: But you know, for context this is I think around a 24 unit building. I don't know exactly. But within five years. [00:22:09] Speaker B: Exactly a 17 unit. [00:22:10] Speaker A: 17 unit. [00:22:12] Speaker B: Big layouts. [00:22:13] Speaker A: Right. So this is not like living in a three flat. You know this is a. This is a bit of an undertaking from a management standpoint. [00:22:19] Speaker B: It's kind of funny how my mom says this and that's why I think this is. I'm telling a story because it's a story that a lot of people can relate to. And just hearing how two hard working uneducated people just made this work for them is he went in thinking I'm going to live in the building. And there are big layouts too. Much bigger. Nice. Better apartment than the one they had. They lived in uptown. [00:22:45] Speaker A: Yeah. [00:22:45] Speaker B: And I'm going to live in there. And then some of the residents will pay the rent and they'll pay my rent at least. And maybe. Maybe I might make something. But I'm still going to keep my job. Yeah my. And honey you're still going to keep your job. Okay. [00:22:58] Speaker A: There was this just this aversion and it's like paying rent and wanted to. [00:23:03] Speaker B: Yeah it's not. It's not like oh I'm going to be a real estate mogul. Just like this is the beginning of my empire. No none of that. So he moved it. He moved in live. Lived in there. And then I got. When I was born in 70 and then. And then kind of funny then he bought the building across the street like two years later another purchase mortgage. And then he bought the building across the train tracks. Guess what? He still kept his job. And then he went partners with a guy on another building. The only deal that turned into crap. And then he got out of it fast which is. And then. But anyways those three buildings and then he sold one of them in uptown. And then the opportunity. And this is where this question of next level how. I mean this is what we can equate it to. Building any kind of business is doing things to push yourself to get to that next level. And that next level a little. [00:23:58] Speaker A: You got a little fire in your belly about give it just makes you think a little. Makes you sweat a little bit. You know. It's like. Yeah. [00:24:04] Speaker B: So here's what happened now 76 though he got to the point where he had the three buildings. He's like I'm gonna go ahead and. And they furloughed 76 the economy was not good. And they furlough the painters wintertime. It's like I'm not going to go back. I'm going full bore here. But honey you still got to stay here because you got insurance. It's not like so you got to still stay here. Right. [00:24:27] Speaker A: But this is less than 10 years from moving to the United States. [00:24:30] Speaker B: This is, this is 10 years. [00:24:32] Speaker A: Yeah. [00:24:32] Speaker B: So. And so he's like, I'm going to focus on this. Honey, you're still. You need to work though. My mom would work around the buildings and then go work second shift cleaning, come back. Uh, and then, and most important you had insurance. You had the local one insurance. Okay. @ that time. Okay, fine. Here's the next step. 76, they have these three properties. And then he was a. Then he's like okay, I could sell one. And then the idea of Edgewater, 6021 Winthrop, where I, I was born in an Albany park in that building, the first one. But then they, the big step was 60, 26,000 block North Winthrop. Yep. 70, 36 units. And then he bought the next 36 units the next year. It was a, it was a one of those four plus ones which at that time four plus one's like 410 year old product. [00:25:17] Speaker A: Yeah, right. It was brand new renovation, 60s construction. [00:25:20] Speaker B: It was beautiful. It was gorgeous. [00:25:22] Speaker A: Yeah. [00:25:22] Speaker B: The four plus ones. So the next step was where you push yourself to go to that next level was moving. It went to Edgewater. He bought that 36 units in the next 36. And that's where he met. And this is where we talk about mentors. Harry to pork. I want his name to live in. And for the record, if my father had a mentor or someone who protected him was a Nazi Jewish Holocaust survivor who, who, who went into that neighborhood. A lot of single fams in that neighborhood. He And a lot of single family houses in that Winthrop Kenmore corridor. And a lot of developers in the 60s made, made them into four plus ones. [00:26:04] Speaker A: And then how about this for like a land of opportunity melting pot story. I mean this is like, this is the, this is the American dream. Like this is it or an example of it there. Because there's a, I mean talk about like the mashup of cultures and how they arrived here. And it's all driven by ambition and opportunity. And you know, Chicago represents that to a lot of people. [00:26:26] Speaker B: And let me dig a little bit more. So here at the Pork, one thing is to have a, a seller who, because who, who. They just build a rapport. And to have a seller who also wanted to see my. He saw the drive in my father's eyes. [00:26:42] Speaker A: Yeah. [00:26:43] Speaker B: And, and, and, and he, and that's where my dad ended up buying three or four properties. Four properties from him. [00:26:49] Speaker A: Yeah. [00:26:50] Speaker B: One. And this is a guy here to pork. Very friendly, passed away 10 years ago, lived until his 90s, but just a great. Just to have a mentor. And then so that's where you have these two uneducated immigrant people and all of a sudden they own 72. You. They own over a hundred units after being in this country for, for 10 years. After 10 years, wait seven from. For 50 after, after 12 years they had owned a hundred plus units right now. And then here's what Harry would say. This is where, where that's why it's important to listen to each other and maybe to allow each other to influence each other for the good. Harry would say to my, would say to my parents, it would say, why do you ask my mom, why do you keep working? You have these 72 units, you have these other, these other hundred units plus why do you keep working if you rent? And they had a lot of vacancy was bad early 80s. And this is where I want to have some context of how history kind of. It doesn't repeat but rhyme. Early 80s was that period where we had high interest rates again. We had a drop down in, in early in 79, 80 rates came down after they jumped in the late 70s, like 77. They came back down to 8 in 1980. And that's what allowed gay animal spirits. We're going to hear about this animal spirits to my parents, to my, my dad to buy in Winthrop, in that, in that corridor. But then, then all of a sudden rates jumped again. And then the neighborhood with that a lot of people moved out and the. [00:28:27] Speaker A: Neighborhood of its guts. [00:28:28] Speaker B: So my dad, when he went into Edgewater, he didn't go into thinking, I'm here to change the neighborhood. The neighborh. Good. [00:28:33] Speaker A: Yeah. Oh, so. [00:28:34] Speaker B: So it went, it went to crap after he had bought those units. So and this is go. And this goes to the idea. Let me, let me get this out. Because before I forget, a lot of people say what you do is not right. What we do is not rocket science. It's not rocket science. It doesn't require a level of science of, of physics and all that others, all that educated stuff. It requires stomach. It requires. There's. It's stomach science. And when things don't go accordingly, which I would equate to this period of time we're in now with high interest rates. So the only thing that hurt us, the only thing that my dad's situation and a lot of operators in the early 80s had a problem where they had high interest rates going up and they had Bad economy going down. And that's something we want to talk about. Something that's protected us so far. Now, I know you want to say. [00:29:28] Speaker A: So take us, take one. [00:29:29] Speaker B: I don't know. [00:29:30] Speaker A: I don't mean to interrupt. I know that this is some I'm not trying. Passionate about, but I'm gonna ask you a question to expand on. So you mentioned to me in the past that your dad. [00:29:38] Speaker B: Slow me down. Yeah. If you. [00:29:39] Speaker A: On the building, your dad had a hand painted management sign that said. I don't know exactly what it said. I'm sure it said something like, property is proudly managed by Hussein Bukovic. Phone number, you know, address, whatever. Okay. [00:29:54] Speaker B: Yeah. [00:29:55] Speaker A: And you are a very passionate operator of your buildings today. You're not an investor in the sense you are an investor, but it goes hand in hand with owning and operating. So talk about like how that's instilled in your mentality towards this business. Because he was not passive. I mean, I know what went into, you know, what goes into operating 100 units today is challenging back then, different set of challenges, but certainly not any easier than it is today. So why is that at the core of your business? [00:30:29] Speaker B: So, yeah. I love how you remember that. I remember as I grew up because we lived. One other big part of this is when we moved from Albany park, we moved to Edgewater. We lived with our residents. [00:30:43] Speaker A: Right. [00:30:43] Speaker B: That was another part of this next step which is just part of what makes what we did. If we look back at and say why our family was successful, why Sal and Mohammed and Issa and my younger brother, why we've been. And my brother Dino have been successful. And it's really from the core of serious in the business where it's not passive. So my dad, one big part, one big thing was I remember he would put this aluminum up torrent. And we had a neighbor, Larry, one of our parents, one of our neighbors, he had a parakeet. I grew up with Ms. Cooper. With Larry, we had Erlene Matthews. To this day we have, we have residents that were part of family. [00:31:31] Speaker A: Yeah. [00:31:31] Speaker B: When we. In the early 80s. In fact, I still have one left, Earlene Matthews, in the early 80s. She's living with us at 6021 North Winthrop. Shout out to her. She came to our 50th, so. So it really was like part of family. It's like we're trying to get this through together. Livelihood. Right. There's the. And then, and then we're going to talk about incentives. Right. Make sure we talk about incentives. How, how incentives are a part of anything we do. And especially any. Anyone that doesn't want to make incentives part of housing, which there's this question of. There should be incentives. There should be no incentives. Or houses should be. [00:32:09] Speaker A: Let's go off track because you're on. You're on. [00:32:11] Speaker B: Let me just say this real quick, but that sign that he put up there was so inspiring to me, because what he did is he put the number and for rent, Bacovic Management. Not like some generic name. He said, we're going to put our name on it because it buck stops with us. We're not hiding. We're not here to hide from what we do. And also, we're management. That's our job. That's our profession. That's what we're striving to do better on. So that. So. And that. That idea emanates through everything we've done all up through this up to this period. We manage our own stuff. Anyone. And I'll say this now, I'm gonna lay the gauntlet down. Anyone who's serious about this business, who want to make this their livelihood, Multifamily owning, managing. If you are not managing your own stuff, and if you're giving it to all these third parties, you're not serious. You have to dig in and take over the reins in this match. I know some of the third party's not gonna like, but. But anyone that has a side job and doing the side. Okay, you're a doctor. Yeah. Give it to Peak, Give it to Kagan. Give it to, you know, all these other guys. All right. God bless Mike Zucker. You had them on. So. So. But if you're serious about this business, you got to manage it. You got to be digging in when you. [00:33:31] Speaker A: My wife and I buy some little six flats and stuff. And we were. We've always just named them the address llc, basically. And we were going a year or so ago to kind of make a. Make it a little bit more of a brand. And really, what's the name gonna be? You know, it's gonna be something abstract like, you know, I reminded myself of Bokovic Management, you know, Hays Properties. You know, you mentioned Kagan Management. You know, Beal takes, you know, a family name, and it's like, if you're. If we're not. I said to Kate is like, it's not about being cocky about. This is what we do. It's about if we're not willing to put our name on the side of the building to set the tone about being prideful for the way that we run our, you know, these are small potatoes, but the way that we run them, that sets the tone for everything. Like, if you're not proud enough, like, it's not because I want to see my name on my sweatshirt. Kind of the opposite. [00:34:21] Speaker B: Yeah. [00:34:21] Speaker A: It's more. So you're owning it. Yeah. It's like you have to stake your name, you know, and so I'm gonna. [00:34:26] Speaker B: Mention a book that I read. I'm in the process of reading Joko Extreme Ownership. [00:34:30] Speaker A: Yeah. [00:34:30] Speaker B: So. And let me, let me touch on. [00:34:32] Speaker A: Wake up at three in the morning. [00:34:34] Speaker B: You know, you're giving me the opening. That's too extreme. That's what. Let me touch on what you just said there. And I love this story that you're telling me and you mentioned with your wife that you what. And there's. There's not many. I'd say very rarely are there businesses where you're a broker or selling or you're a dealer that you need to take each or take your own supply. And what you're doing, you actually saying, I'm not just selling these. These apartment buildings, I'm not just brokering these apartment buildings, but I'm also putting the skin in the game and growing my own portfolio. And I'm doing it with my wife and I'm working hard and I'm also taking on that management. I'm digging in. God bless you, Joe. And I would say that's the kind of thing that has to happen. And in fact, that's the kind of ownership, that's the kind of. That. That's what makes our city such a great place to invest. There's so many opportunities for investment and to add value. And the more different ownership we have, a lot of mom and pop ownership we have makes things so much more vibrant. And this is for the policymaker. Now, anything that the policymaker is going to do that destroys someone like Joe and his wife to be able to manage a 20. How many units you got right now? [00:35:57] Speaker A: 30. [00:35:59] Speaker B: A 30 unit portfolio. And you make it hard for him to operate. That you're making. You're gonna hurt the city. And the city will stop progressing and will go the wrong. The wrong direction. Just like it went in the wrong direction in the early 80s where neighborhoods like Edgewater went to crap because high interest. Let me say. Let me say something. Because high interest rates do that. High interest rates. When you go in the mid-80s, 80s to the 84. Until then, they had the final drop. Volcker killed inflation. Right. We had this tremendous rise of interest rates which then what happens is it allows the owner, operator, the person owning that property no opportunity to make any money because a lot of these loans were, were short, were, were resetting and destroying them. And this is something we make sure we talk about. [00:36:47] Speaker A: Well, you know, you have. Interest rates are a component of it. But when you talk about the regulation and you know, it's a, it's a fine line, you know, it's, it's tough because my wife is a speech therapist by trade, you know, and she does more of the day to day than I do. But you know, I know all the rules and regulation because I'm so, you know, in the weeds with this business. But if you make it so complex to run these buildings that a good person trying to be fair to people just, you know, can't keep up with all the different documents you're supposed to give and all the different rules on exactly how many days. It's like the, the reason why you're saying, part of the reason why you're saying is bad for the market is because the mom and pop owners like that are a very important part of the ecosystem of ownership and management of being a housing provider in the neighborhoods. If you want to make it so complex that we can't keep up with everything you have to do and it takes so much bandwidth, then it's going to continue to lead more and more towards very large, you know, corporate, institutional type owners, which I would venture to guess that most residents would prefer not to be their housing provider in every case. Right. So I hope that somebody that should be more of a. [00:38:03] Speaker B: And to put like a cap on. And to put a cap on that. I love that. And to put a cap on that is policy. Performative Policy for performance. Performative policy making doesn't work. Gotcha. Performative policymaking to play gotcha with, with housing providers and owners and of apartment building is not the right way to go. Well, and let's also counterproductive and it's dangerous for neighborhoods. [00:38:31] Speaker A: I agree. Let's also say that we're two guys that have talked before about we're not scared. I'm not, you know, like I'm not scared of. Take your broker license for example. I wish the broker license was five times as hard to get. I want the bar to be raised as hard as it gets. When the market gets competitive and difficult and there's a lot of choppiness, that's when frankly I get ahead. When the market is choppy as it's been, you know, that's when you get ahead as an operator because you have a team that's very sophisticated. So sometimes we benefit from this because it raises the bar to a point where you have to be kind of towards the top of what you do to keep up. But there has to be a balance. There has to be an eye towards being pragmatic, being realistic about, you know, we've gone too far. [00:39:17] Speaker B: And let me add to what you're saying. The site, you, you're. You would take more tests. You. There should be brokers to be on top of their business. You want serious brokers, same thing as you want serious operators. And, and listen, you can go ahead, regulate when it comes to certain things like lease renewals, making sure that there's a more, you know, people, landlords, housing providers can't, you know, just jack up rent without notice. Right. There's some things that, as a. As knowing how important what we do is in the, in the ecosystem. Right. We are. And once again, I'll put this on the table and someone can debate, and I think I'll win it is what we do as an owner of an. As an owner of apart. Owner and operator of apartment buildings is probably the most important thing that the core thing for a neighborhood. Right. Is that housing of that neighborhood. And also when it comes to that relationship that we have with a customer, like any business relationship, business to customer relationship, owner to customer relationship. I would argue that our relationship is the most intense relationship that any relationship, even with your doctor or even with any other our relationship, housing manager, property manager with customer with resident, is the most intense. They're making their biggest monthly payment to you. You are managing their own. You are protecting their home 24 7. Right. It's like there's. It's not like a bad cup of coffee. Oh, I had a bad cup of coffee. I'll go back to the coffee shop. Okay. They just, they didn't do the espresso. Right. Right. [00:41:04] Speaker A: Some people shy away. [00:41:05] Speaker B: Very sensitive. [00:41:06] Speaker A: It's very shy away from that response. They're just like, this is, you know, this is a transaction. I pay for shelter, you pay me rent. No, no, it's way more intimate than that. I agree. It's like as deep of a relationship as you can have with your customer and the community of the buildings. [00:41:20] Speaker B: Yeah. [00:41:21] Speaker A: So how do you, you, you know, anybody just listening could tell the passion and sincerity you have for that. You have a team now of over 50 people. [00:41:31] Speaker B: Yeah. [00:41:32] Speaker A: I'm assuming that this is something that you're harping on so that everybody Kind of carries that same, you know, look, we're stewards of these communities and these homes and that it goes much deeper than they just pay our rent and we, you know, give them a roof over their head and make sure that the building is clean enough. So how do you, how do you instill that into the team? [00:41:51] Speaker B: Why? Well, first is making sure you instill it within yourself and you realize it. And what really helped me kind of get that, that kind of like that like holy cow moment. [00:42:00] Speaker A: Yeah. [00:42:00] Speaker B: Was pandemic. When you have your product and your service being full, use that full capacity. When you are the game in town, the only game in town, you can't go to the diamond, you can't go to a bar, you can't, you can't go to the game, you can't vacation everyone's home. I mean it was like such a, it was such a eye opening moment. And I said to myself, you know what guys, we are the game. This is what we do. If there's. It's hard to find, and I say this on a team you cannot find. If you want a job and we want career minded people, there's hard. You cannot find a more purposeful job and calling than to protect and manage someone's home, protect and manage a property, protect and manage a neighborhood. You cannot, you can't find it anywhere. Any job that's more purposeful. [00:42:53] Speaker A: I agree, man. [00:42:53] Speaker B: So when I say that it's very simple, I don't need to keep saying it to you. You're going to realize it yourself. Especially if you live in a place, you're going to say how important it is that, you know, I trust the person who owns my property and manages my property. [00:43:08] Speaker A: By the way, I want to point out that the, this inflection point of COVID as it related to the purpose of your business was also at the backdrop of a lot of people painting our business as the bad guy because we still expected people to pay rent. You know, like there was. I was so frustrated during that time because people would say, even like politicians and stuff would say, oh, cancel rent and all this. And nobody was petitioning that. You know, somebody filled up their grocery cart and ran out of the grocery store. But as you've expressed, and I totally agree, the relationship is even is just as deep or if not deeper in your home. So it was, it's a crazy like, you know, doubling down at that point shows your conviction for the business. [00:43:53] Speaker B: Yeah. [00:43:53] Speaker A: So how is that? [00:43:54] Speaker B: Okay, we just touched on that real quick. I'm sorry, is okay. [00:44:01] Speaker A: No, no. Okay. Because this is. We're still on the topic because I love. I love the passion for this mission. But, like, so now you're. You are at a significant scale. Your. Your ownership is concentrated in three neighborhoods. Very, very focused in three neighborhoods. Right. And so when I think about how you've approached the business, it's changing neighborhoods too, for the better. You know, one that comes to mind, an area that comes to mind for me is Howard Street. You know, we worked on a building together that, you know, you have one of your offices in now on Howard Street. And the area north of Howard street and Rogers park is, you know, one of the rougher. It was one of the rougher. [00:44:44] Speaker B: It was like, I mean, pandemic time. The north side, if you want to watch the Wire. [00:44:49] Speaker A: So how have you seen it? [00:44:50] Speaker B: Have you seen the Wire on hbo? That was north. That was Howard street during the pandemic. And my 2024 wasn't very good. Very. Too much blatant. I don't want to get into that. Too much blatant, brazen crime taking place. And we continue to push through that and fight through that, and that's where the stomach science goes into play. Right. [00:45:12] Speaker A: So, yeah, okay, but so how is it, you know, use Howard or the North Howard as an example or somewhere else, but, like, as this mentality compounds across your portfolio, how do you feel about that as a, you know, as a steward of the neighborhood in addition to just your properties? Because the way that Bekovic runs their buildings has a lot to do with the vibrancy and community within those neighborhoods. Now, that's no small. I mean, those are probably the three most quintessential northside neighborhoods. In my eyes. I. I love Lincoln. I live in Lincoln park, you know, but it's not. It doesn't have the diversity. So when you talk about Edgewater and you talk about Rogers park and you talk about Uptown, like, show me three more Chicago neighborhoods than those where you have access to transportation, diversity socioeconomically, diversity culturally, restaurants, all these things, and you play a big part in those. [00:46:05] Speaker B: Yeah, and that's that there's. We play the song, serve somebody. It's about keeping humble and making sure that you understand that we are stewards of those properties. Those properties will live beyond us. And the beauty of these properties, a lot of them. Throughout the portfolio, if I would dig in, you got 100 year old courtyard buildings that unfortunately, you got to go behind the wall. You got to be able to do the. You got to be able to do the work you know, trust me, I don't. I wish I didn't have to do the kind of work I had to do on these gut rehab and Value Add. Property called Value Add. Now I have Sal musings by the end of the show. Remember, we're going to go over Sal. [00:46:53] Speaker A: Musings carved out a little time. You've made that clear. [00:46:56] Speaker B: I'm going to say one right now. You know, we talk about value add now. It's value, it's like ellipsis. Value ellipsis, that's the three dots. So what we have to do is when you're fully committed and once Again, this is 50 years in the making. [00:47:19] Speaker A: Right. [00:47:20] Speaker B: When you go into it with a long term thinking in your head. Yeah, you're gonna do the work you do in that property. You're, you get ahead of the curve and you do the work because you're, you don't have any plans on turning, selling that property or speculating. And one thing I want to say for the record, I want to be able to put this out here in my business, in my neighborhoods. I'm not going to say down downtown, Downtown's a different beast. Let's say even some other neighborhoods that are a little bit more speculative. I want owner operators. I, I'm not a fan of, I'm not a fan of the go in, go out kind of idea. I'm not a fan of the speculator, the developing. Fine, you can build and we can go into my angel and devil of what I think about development. But I, what makes a neighborhood vibrant is to know that an owner and that we have a lot of longtime ownership in our, in our markets and as long as they're serious about keeping their properties up to date and keeping them for the next generation. [00:48:25] Speaker A: Yeah, right. [00:48:25] Speaker B: And investing in those properties for the next generation. You can't, there's, there's, it's hard to find something, an actor. So more important than having those kind of people. And that's why the policymakers have to make sure they, they, they see that and they appreciate that. Right. I, I'll have. No, I, I have my alderman on the 49th Ward, a good, decent relationship. If she'd call me and say, you want to buy, you know, there's a certain property bad, you know, unfortunately, someone has just lost control of their property. Can you buy it? I'm like, yeah, can I buy it? Okay, yeah, okay, put the wand on them. But I, I mean there's, Yes, I appreciate that. I appreciate, appreciate when I, yeah, but it's a. [00:49:08] Speaker A: It's a very sincere compliment. [00:49:10] Speaker B: Yeah. And when I have, when I have alderman, an alder woman calling me, saying, hey, look at this problem. Great. I love it. Thank you for thinking about me. Yeah. You know, and, but yes, it, there's this level of, of full commitment and long term investing that all of a sudden it's like, you know what? And, and, and one thing we don't want to do and I want to be able to state this. I'm not sure where you're going with questions here. Keep me on track. Yeah, but this idea of, of making sure. And this is back to the policymaker. Right. And this is. And maybe our resident will resident and obviously our business people listening to this is make sure you're not doing anything. Any policies that make it punitive for a housing provider or owner of property to manage their property. Because one thing, if you're going to put in certain laws that make it hard to not to fight to bring in good neighbors to a property. [00:50:06] Speaker A: Well, let's talk about this. So here. I mean, the next two topics are going to seem at odds with each other, but I think it's going to make sense as to why that I. [00:50:14] Speaker B: Love asking you about it so I could do it. How much we got here? It's like we only got like another two hours here. [00:50:20] Speaker A: We got. So you're not editing none of this stuff? No, we don't. [00:50:24] Speaker B: You better not. Okay. [00:50:25] Speaker A: We kept it, kept it raw every time. Keep it raw. Rent increases and how, and how. There's a portion of, there's a portion of those that are kind of like playing offense and playing defense. But like, you know, maybe, you know, there's an incentive component to it. You know, this ability to, for your work to be able to be rewarded and make money from doing it, you know, I don't think is a bad thing. First of all, the, the incentive. Incentive. The idea of incentive, the idea of making money is like, so I can do it so I don't give it. [00:51:02] Speaker B: Back to the bank. Joe. [00:51:03] Speaker A: Okay, so you don't give it back. But also, I mean like real estate taxes, you know, maintenance, all of your insurance. I mean like the renovation of these buildings that's required every so often. Like, so pretend like you're talking to, you know, our audience of service providers, owners and brokers and stuff, lenders and real estate, you know, they're going to be more talk to us as if you were a pretend there's a tenant listening or policymaker listening on why rent increases are important part of your business. [00:51:37] Speaker B: Okay. Especially in an inflationary environment, especially in any environment, to be able to make sure you can sustainably manage a property where the incentive of that owner of that property is still there for them to keep doing it. Yeah. Like, let me just equate it very simply. You go to your boss, you're gonna knock. You, you're not gonna, you call, have a meeting with your boss, say, boss, my rent's up, my car, my car loans are up, my interest rates. [00:52:12] Speaker A: Everything is rhetorical. Pretend. [00:52:14] Speaker B: Okay, every. Okay, boss, I need a raise. I hope I deserve it. I hope I deserve it. I hope you, you feel like I'm a valuable. You want to make sure you're going to get that raise value. I'll say this to the young bucks out there. So let me, let me say this. Let me just say this to the young bucks out there out there. This is probably just negotiate. This is. I talked the negotiation for your make sure you're going to, you know, you can get that race. [00:52:41] Speaker A: Yeah. [00:52:42] Speaker B: Because you don't want, you don't want to end up not having a job by the end because you were you where your perceived value is. You make sure that your boss thinks the same thing. You got to make sure you know that. [00:52:53] Speaker A: And I know you're tying this to your conversation with your residents. [00:52:57] Speaker B: Yes. But there's a question. Let me just finish, let me finish this. So you go to your boss and you ask for that raise. And hopefully the boss gives you that raise because he feels like you earned it. Guess what? You just had an incentive to keep doing what you're doing and to keep working where you're doing. I mean, I mean anyone that questions the incentive of an owner of a property knowing that this, that property, especially in this very housing constrained period in time, that we need as much good housing as possible. That there's a, that if, if that owner is not able to keep managing that. [00:53:40] Speaker A: Yeah. [00:53:40] Speaker B: Then they're gonna, they're gonna get, they're gonna let it go. [00:53:44] Speaker A: There's this fallacy. There's the idea that there's. That there, that there's. These are high margin buildings. [00:53:49] Speaker B: Yes, it is. Let me just throw an example. Let me just bring an example. Let me just bring an example. Let me just bring an example. There's a property and it's. I'm still kind of like, like taking it back a little bit right off of Jarvis in Ashland. We had some bad metal porches. I, it was a new property. We took it over about 10 years ago. Great property. Beautiful property right off the train tracks down Jarvis and. But we inherited terror. They got really bad after a few years. Metal porches. And unfortunately with that metal, it was, they were, it was very hollow metal. They didn't. They did the job crappy. Can I say shitty? Okay. [00:54:28] Speaker A: Yeah, I think there's probably a shitty number of times we can't say okay. [00:54:31] Speaker B: There's a certain okay, and then we get flagged. Okay, that's fair. [00:54:35] Speaker A: No, no F bombs. [00:54:36] Speaker B: No. Okay, no F bombs. No. No, it's an emergency. That's okay. No, I'm not gonna say no. No. My wife is gonna. She'll ding me on the, on the, on any swear word. So. So when we end up having to do over 120 grand new porches, a year and a half of income on that property. Oh, hold on. A year and a half of income for that property. [00:55:05] Speaker A: We just. [00:55:06] Speaker B: So, so there's this level of people understanding that properties depreciate. And it's not just idea of the depreciation tax. Properties depreciate. And for a serious deteriorator, they depreciate the deteriorate. Call it whatever you want you. They're. They cost a lot to maintain. Now if you throw in high inflation, where you throw in now, which we're going to talk about is how we're going to manage this area at a time, right this moment in time, this podcast, this conversation is a time capsule of this time right now. I hope, I hope we're going to go back at this time and say, oh, wow, you know, that was the worst period. Because my hope is this is not the beginning of stagflation. My hope is not the beginning of high rates and, and low economy. [00:55:53] Speaker A: Yeah. [00:55:53] Speaker B: And recession. [00:55:54] Speaker A: From your lips. So that's an example you gave of capital expenditure wiping a year and a half of profit. [00:56:00] Speaker B: Yes. [00:56:01] Speaker A: In concert with higher real estate taxes, higher assessed valuation, higher insurance, you know, higher labor for your team, you know, so it's not even just that in a vacuum, not even that. [00:56:13] Speaker B: Very simple. Let's do a dig into this. Want to be a detective? Because everyone's a detective online these days. Very simple. You get for renewal. On the renewal question, have a resident go in there and you can find the pin number of your property and do that. Maria Pappas, our Treasury, our, our Cook county, our treasurer has a very nice. The treasury website has a great setup of the last 20 years of taxes for that property. [00:56:39] Speaker A: Yeah. [00:56:39] Speaker B: And you're gonna see they doubled in 20 years. [00:56:43] Speaker A: Yeah. [00:56:44] Speaker B: So. So it's like this. Everyone's got to serve somebody. We're back to everybody got to serve somebody. We got to serve the city. We got to be. And the city wants theirs. So anyway, so you, you have to be able to manage that. And if you don't manage it sustainable. Now you have another question that you have right now outside of your operating costs, outside of your water bills, outside of your gas. Yeah, we've been a little fortunate with gas because gas has been lower than historical over the last 20 years. That's been our saving grace. But everything else when it comes to operating has, has exploded. Now let me say this. What happens now? What happens this debt. So your debt question becomes very, very focal right now. And this is where my parents, back to my parents story is in the early 80s and they took advantage of some of that because they slowly, they were able to buy properties because people were caught off guard because a lot of their loans reset in a high interest rate environment and they had to give the property back to the bank. And there's. And this is something we're going to have to be very mindful of and we can talk about that. [00:57:57] Speaker A: Well, there's an element of survival to it, you know, making sure that the buildings, there's survival. So, so now, you know, the next topic is going to seem like kind of a stark transition, but I just, I think it also gives context to, you know, you just partnered. One of the cooler articles I've seen recently was you partnered with poe, the preservation of affordable housing. And I think I read it, I shot you the noise. So this is, this is a really cool initiative, dude. And so you know, anybody that, you know, after you've, you just heard sales perspective on why rent increases are necessary, but then you also have affordable housing as a core, like a core foundation, core value, core component of your portfolio. [00:58:44] Speaker B: Affordable, better housing. [00:58:45] Speaker A: There you go. Okay, so talk, anyway, talk about, I'm bringing up the topic of the POA partnership. Talk about why that's important to you. Talk about how it's gone and what you're doing. [00:58:55] Speaker B: So we had, that's an example of how we had this group on Wilson. They had a property, an old, old, tired, 100-year-old property that required extensive work. And, and they, they have residents there, they have contracts with residents where. Well, let me backtrack, let me step back a little bit. We. You cannot kumbaya better housing. You can't sing Kumbaya and get better housing. Better housing. You need to commit to it. You have to spend it. You have to invest in it. You can't kumbaya it. So I love. [00:59:41] Speaker A: They had that realization and the idea. [00:59:45] Speaker B: Is what they said, they reached out to us because we have a number of properties in uptown, Edgewater, Rogers Park. Right. That's our, that's the whole of Trinity. And they said, you know what, sal? We have 34 households. We have 34 households. We have. That's actually very pretty. Is that, is that East Lake Terrace? Is that East Lake? That's East Lake Terrace. [01:00:05] Speaker A: We're gonna keep this so nobody thinks we lost our. [01:00:08] Speaker B: That's Mongolia. Okay. [01:00:09] Speaker A: All right, we're back. We're back. We're not adding none of this. [01:00:15] Speaker B: So you cannot kumbaya better housing. You can't kumbayat. You have to spend the money and make the effort and, and make the full commitment to it. Right. So now they reached out to us saying we have, we have our res. Our households, our residents. We want to keep them. They have contracts with, with, with affordable housing providers. [01:00:39] Speaker A: That's right. But they've got a building that's becoming functionally absolute. [01:00:42] Speaker B: Yeah, it's functionally, absolutely. [01:00:43] Speaker A: They can't. [01:00:44] Speaker B: Which I can't because I love that they're doing that because I'm a big believer that these properties, these. I don't want to tear them down. Yeah, these are beautiful relics of the past. [01:00:53] Speaker A: Yeah. [01:00:53] Speaker B: I mean, you'd see a courtyard building, a 100 year old courtyard building built in 1921. You see, you know, that picture, that courtyard. You know how they, why they built it that way? The big front yard, the big open corridors, the big ventilation corridors, every side. Because they built it because they had a pandemic in 1918. And they. And their building codes was, you know what? We need as much ventilation and airflow as possible right now. So you have these beautiful properties that will never get built again. They're just never going to get. Because they didn't have the land and so the land wasn't there. What we're doing is we're going and we're going behind the wall. We're gutting them. And then there's a lot of rooms that, dining rooms are never going to be used. And we make them into nice, gorgeous layouts. [01:01:37] Speaker A: Anyways, what they're doing, go back to Poe's predicament, go back to their po. [01:01:43] Speaker B: These guys, they reached out to us and they said, we need to house our residents for a year. And you know, we want to be able to. Can we, can you help us relocate them amongst your properties? I said, you Know what? No, I think that's not great idea. I love what first, I love what you're doing. You're investing in that property. It's only going to be good for the housing stock. A better, safer housing stock is. Is world. We got to think long term. We can get caught short. Short sighted. [01:02:09] Speaker A: Yeah. [01:02:10] Speaker B: In our neighborhoods. Any policymaker, you can. Same thing. You cannot be thinking short. Anyways, they come to us. [01:02:15] Speaker A: Yeah, well go. Hang on. But go to any dilapidate. You know, any block that has a dilapidated large apartment building. [01:02:21] Speaker B: Yeah. [01:02:21] Speaker A: What does that do to the block? It doesn't matter whether it's, you know, affordable, whether it's market rate, whatever. It's like if there is a tired building that becomes an eyesore, just becomes. It manifests through the rest of the block. It changes the field. So the housing cancer. [01:02:38] Speaker B: Yeah, it's a cancer of the neighborhood. [01:02:40] Speaker A: So you guys. So what we found homes for these. [01:02:42] Speaker B: Residents right now they sign a year lease. They handle all the rent payments at market rent. I. This is not, this is not a charity. [01:02:50] Speaker A: Yeah. [01:02:51] Speaker B: Guys, I have to support these properties. These properties have to support themselves. This is not. We'll find the. [01:02:57] Speaker A: How many residents have you. [01:02:58] Speaker B: 34 different households. And the great thing about it is we got them into three different neighborhoods. Edgewater, Uptown, Rogers Park. And. And if you were to. We have a couple of them just that they, they're living in these apartments that you know, are class A properties. This is, this is the class A down the block that you'd be getting. Right. Because that's what we do. We're so. And then. And, and they're doing a great mission of upgrading their housing. And after a year that's the kind of cooperation example of. [01:03:25] Speaker A: Right, exactly. Cooperation. Collaboration across different organizations. [01:03:29] Speaker B: And also like, let me say this, like programs like section A, the voucher program. [01:03:33] Speaker A: Yeah. [01:03:34] Speaker B: I think they're great as long as they can administer better and manage better and be up to date with what it takes to, to rent apartments. [01:03:42] Speaker A: It's a meaningful portion of your portfolio. [01:03:43] Speaker B: Right. A good chunk of our residents are go through the program. [01:03:48] Speaker A: Yeah. [01:03:49] Speaker B: So. And I love those residents because they also have skin in the game. There's this idea of skin in the game. Incentive. We're talking about incentives. Again, the resident is incentivized to not be a bad neighbor, otherwise they lose their subsidy. Right. And then we're incentivized because we're getting market rent for that property to help sustain that property. Because you don't. What you don't want to have is what happened now we'll talk about it. There's an article somewhere online is we had an organization, Better News Partners, right in north of Howard there on Jonquil. And I had a little, there was a little pushback with. I was in the news about, you know, we had to empty out the building because the building was seriously dilapidated and, and that. [01:04:34] Speaker A: And this question and not cosmetically like real violations. [01:04:39] Speaker B: And let me for the record, our alder woman, Alderman Alder woman Haddon was very helpful with us to help work with us. She understood it, she saw it, she feels, you know, it's unfortunate that. You know, the unfortunate part is this. You have a non for profit owning that property and they want to keep artificially those rents at very low levels. They can't maintain it. And then you have an inflationary environment. Finish this. You have an inflationary environment, then all of a sudden chops people's heads off. You can't. You have no room to do anything because you're stuck at a top line that you can't move. And. And then all of a sudden the property becomes the point where we did go. We got it, you know, how much different, how many rats we found in baseboards. Just the kind of the stuff that you find in these properties. So. Well, anyways, we. And then I would say this. [01:05:31] Speaker A: That's what's. [01:05:32] Speaker B: Hang on, let me say this is sound bite. Let me Sound bite. I got sound bite. We should not. There should not be a choice. The. The false choice. There should not be a fault. Make sure we. No, you're not gonna have this. There should not be a false choice between homelessness. Homelessness and unsafe bad housing. Yeah, that should not be the choice. [01:05:55] Speaker A: It was similar, unfortunately. [01:05:56] Speaker B: That was the choice for that property. [01:05:59] Speaker A: Yeah, similar to what I was going to. [01:06:01] Speaker B: We gave them free rent, months of free rent. We, we. And then they. Everyone moved out and they got. And then the older woman was very helpful to help us do that. But this false choice of, of homelessness and unsafe bad housing. [01:06:19] Speaker A: Yeah, well, that's not. [01:06:21] Speaker B: That shouldn't be the choice. [01:06:22] Speaker A: Those things shouldn't be at odds. I agree. It's just. [01:06:25] Speaker B: That shouldn't be the choice. [01:06:26] Speaker A: Well, it's an example of, you know, I think what oftentimes what's. What's neglected in those articles about the owner coming in and renovating is there's this, there's this talk of displacing residents that need that type of housing. But like if they can't, if it's not safe for them to be there in the first place, then there shouldn't be this. Unfortunately for some period of time it was a bit of a public black eye because you didn't have the opportunity and to your credit you're forward enough about it to explain the other side and to get out ahead of it and to be communicative about your perspective on it. But there are instances where that happens and the owner is not so outspoken or doesn't have the same portfolio that doesn't have the same credibility given all the good that you've done across your other buildings. So I think it's helpful to understand the perspective sometimes why those situations come up. And there's certainly human, you know, this is this neighborly way to handle that and it's delicate, it's, it's challenging. I mean we talked about how serious your home is. So not like I'm not diminishing this like the significance of somebody moving but when it has to happen, it has to happen. And these are hundred year old buildings. So we're going to pivot for a sec. I want, I want you to talk about a couple things that you alluded to earlier in the conversation is your eye towards macroeconomic conditions where the treasuries what are the trends? And you invest as a you know, you invest in real estate as a sophisticated in the know financial investor. But then you also, you talk about you know having animal spirits or you know, how are the animal spirits feeling right now? Or I got this angel and devil on my. So how do you. You're kind of cerebral like that too. So how do you balance the financial times economist, you know checking the. With you know, you also kind of have to go with your gut sometimes, right? [01:08:22] Speaker B: I. I was. Yeah. I think. Well, I think at the end of the day my number one thing that kind of keeps me I'm in the game. I. I'm. I've made a decision just like that Union painter office cleaning lady. Let me just tell a story about the office union painter office cleaning lady real quick and then tell you how in the game I am is there is a situation early 80s once again the neighborhood went to complete crap in Edgewater and Winthrop very bad. And there was a big domestic disturbance. Someone shot a gun inside the car, inside the, inside the apartment. And the police were called. My parents called the police. My mom, the little small lady she never had. She'd go in the front while you hanging out in the front get out the loitering. But he was the more division but, but anyways what happened to my mom? It's a pistol. She's not afraid. And she'd call the police, and we call the police. The police officer came early, 80s, 81, 82, 83. That was five years old. And. And I would play with the kids, their neighbor. I mean, it's like, for me, is. Anyways, I can't. [01:09:27] Speaker A: And the police connects. [01:09:28] Speaker B: Okay, so what. What. Where's the story? Okay, let me say this. It connects. I. I think. I think it's gonna connect. Is. Yeah. And this is where the stomach science comes into play, too, is when you have a police officer say, we want to be able to report this. Police officer says, what. What are you guys doing in this neighborhood? Get out of this neighborhood. My mom. My mom's. And my mom would ever say. My parents would never say, we own the property. We're janitors. We manage the property. [01:09:58] Speaker A: Yeah, yeah, right. [01:09:59] Speaker B: They would never say that. We're just janitors. Yeah, right. Because no. No owner would live here. Right? And then my mom said. My mom was saying, what? No, we. We work here. We work here. We. And we. This is. This. We live here. This is our life. And he said, you get out of this neighborhood. What are you doing in this neighborhood when you have a police officer? And my. And then. Kind of funny. My mom went to medicine recently. She. We have an attorney, another Jewish friend of ours, another one of those people that my parents leaned on. Uneducated. Uneducated, quote, unquote, people looking for support and looking to have their story told. Jerome Feldman, God bless his soul, another Jewish attorney. And. And my parents would tell Jerome, this is like, did you get his badge number? You know, did you. Did you did. No, my parents didn't. You know, the immigrants, they don't. They don't. They don't make. They don't make. They don't make drama. You know, they'll say, you know, okay, that's what he told me. But that's just an example of this idea of when you have. You're living. It's like your survival. You have no choice. You're gonna get through it. So back to my. You asked me, Sal. I'm fully committed. I'm in. This pandemic happened. I'm in it. Recession happens. That's fine. As long as there's not another pandemic. I'm in it. I'm digging in. [01:11:18] Speaker A: So those components that. Trusting your gut is ingrained. [01:11:23] Speaker B: There's. [01:11:23] Speaker A: That. The balance of. [01:11:25] Speaker B: There's the. There's that energy. Joe, let me say there's that energy. [01:11:28] Speaker A: Sometimes you have different appetite for different deals, depending what's going on. [01:11:31] Speaker B: So let me say this now, let me just give you now the macro. We mentioned macro. Let's talk macro. [01:11:36] Speaker A: Yeah. [01:11:37] Speaker B: And let's talk about something we have to be mindful of is on the macro side. We've gone through yin and yang in the last five years. We've lived a century in the last five years, right. We had, we had, I mean, we had the 19th century in five years, right. We had crazy inflation, we had, we had crazy pandemic. We have war in Europe, we have. What else is there am I missing? We have supply chain breakdowns, we have looting on full unrest. Right. We had, we had the Capitol freaking being stormed. [01:12:12] Speaker A: We had freaking political hostility. [01:12:14] Speaker B: We had the last five years was. [01:12:16] Speaker A: Yeah. [01:12:17] Speaker B: Stacked. [01:12:17] Speaker A: Yeah. [01:12:18] Speaker B: Now, so, but that said, in our business, we went through early in 20, 21, 22, we had debt markets throwing money at you, operations getting through somehow. And then all of a sudden now our operations are top, like, excellent. [01:12:35] Speaker A: Yeah. [01:12:35] Speaker B: But now debt markets is like you're, you're flying through, through the Rocky Mountains, lots of turbulence. Right. So. And it's. Something has to give. So now ask me, Sal, what are you doing now to make sure that this ship that you've created, which, you know, in our business, we're not nest egging. [01:12:54] Speaker A: Joe, you're steering a big ship. [01:12:56] Speaker B: Now here's. Let me say this, let me say this, that. Let's talk about debt. Let's talk about the balance sheet, right? The balance sheet, right? You want to make sure it's balanced, you know, make sure it's not here, can you see this? You don't want to make sure it's here. You don't want to make sure it's, you want to make sure it's like. Right. [01:13:12] Speaker A: Yeah. [01:13:12] Speaker B: You know, if you could do 50, 50, 55, 60, 40. You know, if you can have 45, 50, 50 equity. 45 equity. Keep yourself that, you're good. [01:13:22] Speaker A: Yeah. [01:13:22] Speaker B: Okay. Anyways, that's your marker. How do you manage? Yeah. So that, that gives you a sense of things. All right. It depends on whose market values. Right. I could do, I could do 20, I can be 80 equity on, on some people's market valuations like Joe, if you're trying to get a deal. So, so here's a sense of this to be mindful of is first, if you want to make this into a business, Joe. But let me ask you, Joe, as a, as a, as a multifamily operator, not take your broker Hat off. As a multif family operator, that's what you are. You are owner operator of those 30 units. You have debt on your properties. [01:14:01] Speaker A: Yeah. [01:14:01] Speaker B: Okay. You have at least 50% debt on your properties. [01:14:06] Speaker A: 55. [01:14:07] Speaker B: Okay, great. Okay, great. Leave it at that. [01:14:11] Speaker A: Yeah. [01:14:11] Speaker B: So the point is this, you are in this business, right. If you don't have any debt on this property, you are nest egging your apartment building. [01:14:20] Speaker A: Yeah. [01:14:21] Speaker B: Just know that now and that there's. [01:14:23] Speaker A: Nothing wrong with that. For you. It's an expense of your business. It's a way, it's a, it's a. Sometimes it can be to catalyze growth. Sometimes it can be, you know, to be able to reinvest in a property. [01:14:36] Speaker B: Yes. [01:14:36] Speaker A: But it's an expense. It's just, it's part of the whole ball of wax that is owning an apartment. [01:14:42] Speaker B: Yeah. So our, and our model. Our model. And once again I'm not going to, I don't want to be out there. The developers, Developers have to make their money, they have to make their capital. The only problem, I would say the only, the only issue, I want to make sure that doesn't happen to those developers. Have I seen them? I've had them, I've met them. I've met 70 year old guys. Say I own 2,000 units in Rogers park and they're living in my two bedroom on East Lake Terrace. Right. And they're renting an apartment and what happened? Right. You don't want to. One thing with development you have to make sure. And one thing I love what you're doing is you're in the business and you're deploying that, you're earning, you're deploying it in the business. So when you wake up one day when you're 50, 60, you'll have 100, 200, who knows? God, you know, you have your own stuff and then you want to think about syndicating that and having, playing that game. That's another game you can think about while you're still doing this. Right. That, that's some of. [01:15:30] Speaker A: It's just this principle. I mean like, you know, at the end of all this, you hard work, I want to have something to show. [01:15:38] Speaker B: For it, you know, so that it's like here's the problem with development. [01:15:41] Speaker A: There's an idea of consumption smoothing I think is the economic principle. You know, you just. Yes. Like as you get comfortable spending a certain amount consuming and then all of a sudden it's like. I think lifestyle creep is a more common way to refer to it these days. Like if I don't find something constructive to do it, we'll find another reason why they just kind of like inch up the lifestyle. [01:16:01] Speaker B: Yeah. [01:16:01] Speaker A: So. Yeah, there's some. [01:16:03] Speaker B: So. So. But say this. A word of warning to your young buck high, high flyer dealers, the, the, the deal makers and the developers out there making the deals. All I'm going to say is this is don't wake up 60 years old and all you have to show for is your old boat and your house. Seriously, don't do that. You have to. Because here's the problem. It's very, it's very delicious. Potentially in a good market. Because it's a deal. Oh, I made a big deal. I'm a deal. I built a building and it's nice. And then all of a sudden you sell it and you make your big chunk of change and then what? And then here's the problem with the developer. Call it a fallacy. Not a fallacy, but call it the. A trap. [01:16:48] Speaker A: Yeah. [01:16:49] Speaker B: Is what happens is you go bigger. You go bigger. You're successful here, you're successful here, you're successful here. Chopped off your head off. The bigger you get, your head gets chopped off and you got nothing to show for and you go back to. So hey, here's the thing. That's the only thing. I'm gonna say this to the, to the, to the young bucks out there doing the, doing the hard work. Stay in the game, Joe. [01:17:19] Speaker A: Stay in the game. [01:17:20] Speaker B: I didn't expect that to be funny. Joe. I'm being serious. [01:17:23] Speaker A: Is the inflection. I appreciate the enthusiasm. Stay in the game. [01:17:28] Speaker B: Is the point of this also. Stay in the game. So I'm in the game and so. Let me finish this part. I'm sorry. We got three hours here. Right. So. Okay, how many hours we got? We started late. So here, here's the. Here's the one thing. Also part of our model is you've heard the refi the business, which I agree. This idea of. We're in, we don't sell. So we're doing. The idea is you want to refi and keep deploying capital moving forward and then you make sure you don't put too much on the property and too little. [01:18:01] Speaker A: Yeah. [01:18:02] Speaker B: But the point of the loan proceeds is proceeds. That's what allows you to keep doing. [01:18:11] Speaker A: That cash in refi. [01:18:12] Speaker B: Right. It's proceeds. Right. It's like allows you to keep doing what you're doing. Proceed there, Sal and Joe, proceed. So that's the point of loan proceeds because we're not selling we're not. [01:18:25] Speaker A: I don't even know how to smoothly transition out of this one. So let's do it. You have, by my count, about 70 buildings in your portfolio. Oh, my God. Give me your favorite three and why they're your favorite. [01:18:38] Speaker B: Okay. Well, I think there's different. And once again, I think we talked about the union painting office, cleaning lady, how they took the next step in Edgewater, then they took the next step in Uptown. They moved into Uptown and then set up their own office management group. They had 400. So that union. Let me finish that story. As we kind of weave that story throughout. That union. That union. That union painter. [01:19:03] Speaker A: Yeah. [01:19:03] Speaker B: And that office. Clean it. Who ended up quitting her job in 1980. 81, after my younger brother got born. So we had four boys because Harry Tapor, God bless his soul, said, why do you do this? Why. Why are you. Why are you spending. Well, you can go out there and rent these apartments that you have vacant over here. Two or three apartments you rent is your salary. It's because I don't have insurance. I'll figure out the insurance. And then she quit her job. So she was fully focused on it. Yeah. The union painter. Fully focused and just fully focused compounding and just hammering it. So they, they. [01:19:37] Speaker A: So there's a few buildings that made you feel the way that you imagine your parents felt back then. [01:19:43] Speaker B: Well, I'd say how they took the next step. [01:19:45] Speaker A: How they. [01:19:45] Speaker B: For how they. There. There's a few properties at 4520 North Clarendon, where one of our. Our main offices. That was a huge deal in Uptown. That was in 1996. [01:19:55] Speaker A: Mid Rise Building on the lake. [01:19:57] Speaker B: Yeah. Beautiful property around. I love, I love. And one thing I love is, you know, all this stuff. This stuff you got to be Chad GBT with your neighbor with you. That's what makes you Joe and Tara. Joe, Tara. Business right here is you. And that's how you get deals. [01:20:10] Speaker A: I understand that one doesn't surprise me. [01:20:12] Speaker B: So anyways, that was a big step. [01:20:13] Speaker A: What else is. [01:20:14] Speaker B: So. But, but that was for. That's my. That's my parents. That's my parent. That was legacy property. So let me just finish. My parents. They had legacy of 400 apartments. Yeah, that's what they. They ended up until my dad had a major stroke. Thank God he's still here to this day, inspiring us with his motivation and energy. And my mom. Thank God, very solid. My dad just turned 85. My mom 81. Yeah. So they had 400 apartments. And then from that 400 apartments and this is where I never did track and feel. Have you ever did track and field the baton, you know the. What's that tag team with the running around. You got to pass the baton. [01:20:49] Speaker A: Relay. [01:20:50] Speaker B: The relay, that's right. How I see what we're doing and is a relay. I see my parents started this thing. They built a very strong base foundation. My oldest brother Muhammad has been doing it in Indianapolis, in Indiana and Florida. He likes to do class A development now but he still manages. He has a management operation. [01:21:09] Speaker A: Yeah. [01:21:09] Speaker B: Extremely successful. [01:21:11] Speaker A: Yeah. [01:21:11] Speaker B: And then I got my second. My other older brother Issa who's been. Who's basically repositioning Rockford as an now we're, we're working on neighborhoods, he's working on the city. [01:21:20] Speaker A: Yeah. [01:21:21] Speaker B: Rockford, he's. And then also he's coming down downtown here. He bought a big deal here in Gold coast and he's looking downtown. So. And then what I'm doing and my younger brother is we, we took the baton and we're running right now and the hope is. And that's what makes this so hopefully so important and that's why I do this. My hope is I have the baton to pass. I have a young, I have a six year old boy and a three year old girl. Hopefully it's a baton I can pass to them the same way my brothers have what they've been able to do. So unbelievably they have a baton to pass and all of a sudden what happens is you know, you're taking the run and you're, you're doing, you're running and you're doing it because you've, it's a lot of purpose in what we're doing. Once again it's, we're not playing with money. We're. I don't. It's not like I'm at. There's some. My financial firm where we're selling stocks or something hollow looking on screens and doing that or playing with other people's money. We are. This there's. You cannot find when it. And this is the young bucks out there or anyone wants to get in. This is, this is. You cannot find a more purposeful job and a career and calling than managing these properties and hopefully having the incentive to keep managing them and then keep growing and keep taking care of them. So that's where we're in this. I'm in the track, I'm in the running mode right now and hopefully, you know, I, I like to think my, I can sell my kids on the, on the Purpose of our work because you know, kids right now these days, they're less caught up with the money they want. Purpose. [01:22:53] Speaker A: Yeah, I agree. Yeah. [01:22:54] Speaker B: Right. And so you want to be able to say this is, this is so purposeful. So that's kind of. So. Yeah. So my properties. 3. There's three Edgewater Gardens in Uptown Winthrop and Glen Lake was one of the biggest, one of the biggest deals, biggest steps that we made because these were properties that were very, very near and dear. I grew up in that corner, Winter Glen Lake. And it was just beautiful. [01:23:17] Speaker A: Courtyard buildings, 100 year old, middle of the neighborhood. [01:23:20] Speaker B: 100 year old courtyard buildings is gorgeous. And they also required a lot of work. And that was our first big value where I got really. Here's the idea. If you take a project that allows you to kind of stretch your muscles when it comes to building a construction team. [01:23:35] Speaker A: Yeah. [01:23:36] Speaker B: I have, I have eight different contractors now and they have their own groups of like seven, eight guys. [01:23:40] Speaker A: Yeah. [01:23:40] Speaker B: Right. So I mean doing. Going across our own portfolio. So this was the first big step saying we're doing a lot of work here. Well, well, before that we had a weird. We bought a few properties but they didn't require the kind of work. I wasn't doing that. And the good thing about it is I'm glad I didn't. One thing is when you're building this, you don't want to lose. You don't want to get too. You like to be able to make some. Get some deals that make sense just on operating. [01:24:04] Speaker A: Yeah. [01:24:04] Speaker B: You don't want to have to do too much value at. [01:24:05] Speaker A: In the beginning. Balancing the different buckets of the heavy lift versus. [01:24:09] Speaker B: So yeah, with Edgewater I understand that one. Another big one. I think the portfolio on East Lake was a big deal. Right. And that was also another long term owner operator that just couldn't manage in the property anymore. Same thing in Edgewater Gardens. Another long term owner operator. 2030 couldn't manage it anymore. They got old. They got too much. And then the third property I would mention is that duplex deal. [01:24:30] Speaker A: Yeah. [01:24:30] Speaker B: Is our, is our, is our condo deconversion. Which is high rise. It's a high rise. [01:24:35] Speaker A: Direct view. [01:24:35] Speaker B: There's. Yeah, there's. And it's just. So those three, I think stretch you. It's like you. And they force you. Sometimes you have to push yourself. You got to make yourself uncomfortable. [01:24:44] Speaker A: Yeah. Yeah. Those are incredible buildings, man. Well, buildings are portfolios. We are gonna, we're gonna wrap. [01:24:53] Speaker B: How much time we got. [01:24:54] Speaker A: No, no, hang on. First of all okay. You get a chance. This is okay. You get a chance for. You don't have much time. I do want to be. [01:25:00] Speaker B: How much time we got? How much time we got? 10 minutes. How many minutes we got? How long we got right now? [01:25:09] Speaker A: How much that. What are we at right now? [01:25:11] Speaker B: Are we. Are we over an hour. [01:25:12] Speaker A: He's out there. [01:25:14] Speaker B: Hour 27. Oh, yeah. Okay, real quick, real quick. Let me just finish this and then we copy and paste this. Okay. Real quick. [01:25:21] Speaker A: So these for. For context. [01:25:23] Speaker B: Yes. [01:25:23] Speaker A: Sal said you got to give me some time because I got some stuff to get off my chest. So these are the Sal musings. [01:25:29] Speaker B: Yes, my Sal musings. [01:25:31] Speaker A: Selfish. [01:25:31] Speaker B: Yeah. I mean, self ucious. Okay. Higher rates force higher rents. Higher. It's about survival. Higher interest rates. Okay. Very simple. Need a plan for the big resets. Right. A lot of loans resetting in the next year. Be ahead. You got to get ahead of that. Maybe you might be good on cash flow today, but imagine if you had that thing doesn't reset by next year. Be very vigilant. Make sure your operations are ready for that. Right? Take. Make sure you, your top line is ready for that. [01:25:58] Speaker A: Yeah. [01:25:59] Speaker B: Okay, great. This is the animal spirits. Great. Fixed debt allows for some animal spirits. We mentioned that. But sheep spirits can come quick. Sheep spirits can happen. You can start bat. [01:26:14] Speaker A: You've all. You've, you've. You like teased that in deals before. [01:26:18] Speaker B: It's like, ask me, I'm an animal or am I a sheep? You know, and then I have. It's okay. The kumbaya. It's time to get serious. You cannot kumbaya better housing. Okay. It requires all hands on deck. Okay. Gotta have faith. Friedman, the building that you're in right now, I, I went to one of those Lincoln park builders and he was one of the guest speakers. And it stuck with me a little bit. A little older timer. Not as old, but old timer in this neighborhood. River north, where your office is. [01:26:46] Speaker A: This building? Yeah. [01:26:46] Speaker B: Yes. And one thing he did say is you got to have faith. You got to have faith. There's a George Michael song. Gotta have faith. [01:26:54] Speaker A: He transformed the neighbor. [01:26:56] Speaker B: You know, you gotta have faith. Yeah. There's a level of that that you just, you know, is a part of that mix. Hold on. Remember, especially now, it's a long term game. Great purpose. This is not bitcoin. This is not Robin Hood. Now it's like this we heard on LinkedIn, Survive the 25. Now it's like Survive 25. Okay. This is. Get a little philosophical. You can't choose. You're born to. But you can choose who your kids are born to. [01:27:26] Speaker A: Yeah. [01:27:27] Speaker B: Damn, that's powerful. I didn't. I make that up. Put that on video. But I. I need this. So you can split. We need to put these in so we can splice them. We don't. You might cut them off. Okay, okay, okay. I said proceeds. Hold on. Oh, multi family brokers. You're asking. Okay. My pet peeves. Don't the monopoly sell. Okay. Oh, you can own a whole neighborhood. Yeah. And I'm gonna pay 13 times gross for that. The stock broker sell. The stockbroker sell. Oh, you could dollar cost average. I'll go ahead. Pays 13 times. I'm gonna dollar cost by 7 times what? $ cost average. [01:28:11] Speaker A: Me. [01:28:11] Speaker B: Okay. And then the grandpa sell. In 30 years, what's gonna matter? $100 million. The grandpa cell. Okay, next one. [01:28:24] Speaker A: You like that? [01:28:24] Speaker B: I see. These are worth it. These are worth it. Okay, I. Okay, Then we got high interest. We said confused. Okay, how about this? Selfucious. Say no one will blow more smoke up your ass more than yourself. [01:28:39] Speaker A: Yeah. [01:28:40] Speaker B: And then don't underestimate skin in the game. [01:28:42] Speaker A: Yeah. [01:28:43] Speaker B: Incentives. We talked about how important incentives are. Don't overestimate your contributions and underestimate your blessings. There's the idea of blessings. I mean, at the end of the day, there's, you know, there's a level of. I, you know, there is another. A higher power out there. I believe that you. We can lean on. [01:28:58] Speaker A: Yeah. [01:28:59] Speaker B: And then. Yeah, then we have. I said the value. Add value. Add value. Yeah. And that's it. [01:29:10] Speaker A: My last question. [01:29:11] Speaker B: I'm done. [01:29:12] Speaker A: You've been awesome. But you. I cannot let you finish up without asking why you love Chicago as a place to be a steward of your family business, grow your family business, raise your kids, live, provide housing. [01:29:27] Speaker B: You know, tell us my background. I was. If I would have been doing this, I'd probably be in journalism, some kind of journalism. So it allows you to kind of look at things objectively. And it's hard for me to find a place that has the kind of. The kind of intangibles and tangibles and the kind of capital absorption, the kind of capital and. And differentiated economy, culture, location, all the, all the natural beauty of everything. You know, we met. [01:30:00] Speaker A: We. [01:30:00] Speaker B: Which we talked about and beyond getting beyond the fact that. That my parents made the decision to be here. And I say thank God they came here in New York. [01:30:09] Speaker A: Yeah. [01:30:09] Speaker B: Or California. Because this is a place and this is back to the young bucks out there investing. And I went to Pullman. We Mboa shout out to Mike Lasser. Mboa, yeah, for sure. We had a field trip. I felt like I was in, in high school doing a field trip. We went to go see the Pullman, what they did in Pullman, a lot of that investment. And then we went to see all the Alderman Beal and Alderman Chico. We went to the quantum physics of what they're planning to do there at the. What island? What's the name of the con where the island. The land where the steel plants were. The old steel plants. And they. To see Alderman and show. Like sell their neighborhood and show. And there's a lot of these houses that are completely. You can buy for 10, 20 grand. Yeah, it's like opportunities. The point is opportunities here in Chicago because things are very for compared to a lot of these other big cities. You can go in there as a, as someone in our business in real estate. [01:31:07] Speaker A: Yeah. [01:31:08] Speaker B: So many opportunities for us to actually practice our craft and still have the respect. Because one thing is you want to be able to practice your craft in a place that you'll be proud of the practice you crafted. So. So yeah, I just, just so many intangibles outside of everything else, right. Outside of the history, I mean outside of the idea. I think you have kids, you have your 8 year old and 5 year old. My hope is with your kids and same with mine is that there's something very powerful with this idea of your kids experiencing and giving them the kind of structure, foundation for them to be able to see and enjoy your livelihood and especially your properties and to be able to kind of. You're giving them solid, you're giving them solid podium, solid foundation for them. So yeah, I'm so, you know, back to the union painter and office cleaning lady. I'm so grateful they, they made a decision to come to Chicago and it just, I'm carrying the baton. Running. Running. Was it the fourth lap or whatever the relay. [01:32:09] Speaker A: The city is, you know, is lucky to have you and your work and your. And you know, I think the real estate community is lucky to have your energy for the business and your thought leadership and your, your portfolio and the way you run your business as an example of doing it right. So feel very lucky to have the relationship we have and you know, kudos for everything you're doing, man. [01:32:34] Speaker B: Thank you. Joe. Great show. I think it's not that long. We didn't, we didn't do that long. [01:32:38] Speaker A: I mean it was, we set a record. [01:32:41] Speaker B: We packed it pretty good. [01:32:42] Speaker A: Yeah, it was good, man. [01:32:42] Speaker B: Okay, give me some. Give me some. Joe show. That's a cut. [01:32:47] Speaker A: We got ggos it.