0:00

I mean for you you work there to say that we have a property

0:02

tax problem . It's blowing my

0:04

mind .

0:04

Well , because he's also . He's

0:06

also in finance right

0:09

and he teaches economics

0:11

. So for him he just he

0:13

was like this this 2%

0:15

property tax , and then you

0:17

know we went down a rabbit hole of where the property

0:20

taxes go and how you know . That's a whole other

0:22

story , but yeah , it was . It

0:25

was shocking to him .

0:26

When you get your property tax bill . Everyone just

0:28

got right . We just got him like a couple of times . Yes , last week

0:30

, when you get your property tax bill . The top of it has

0:32

your pin number and then it has what your

0:34

property tax is . There's

0:36

it's three sheets . Take

0:39

a look at the middle . That

0:43

tells you where your money is going to and

0:45

it brings down and it also tells you on

0:47

on all the way . On this side it'll

0:49

say percentage of shortfall

0:51

yes , and it there

0:53

is nothing that's underneath 40%

0:56

on that percentage of shortfall , and so

0:58

it's it's another

1:00

pocket . What's

1:05

the five pds ? Do you remember it ? Preparation

1:08

, preventable performance . There

1:10

you go . It doesn't matter how much money we get

1:12

. If we don't close it's no money

1:14

, right ? So no clothes is no money

1:16

. I'm everything that I am because of my dad's

1:18

death , and I wouldn't be

1:20

as successful without

1:23

his death . Hey , welcome

1:25

to Jason Theory . This is

1:27

episode two , season three

1:30

, and we are going to be

1:32

talking to my partner , sophia

1:35

Klopis , and we are going to do a little

1:37

bit of an overview of what happened last

1:39

year some stories from last year where we

1:41

see things going this year the state

1:43

of Chicago , what people are

1:45

looking for and just

1:48

how competitive the market

1:50

is . So if you are thinking about

1:52

the real estate market , selling or buying

1:54

this will be a really interesting one

1:56

for you to see what you may have

1:58

missed last year , what you may have hit on

2:01

. So if you bought and you hit , if you didn't

2:03

buy , you missed , and what you

2:05

can think about for next year . So let's

2:08

get into it , sophia , jason

2:10

, all right .

2:11

Hi . So

2:13

last year , I think was it

2:15

was , I think generally , for most people

2:17

would say , a pretty tough year

2:20

for the real estate market . I think what

2:22

our rates increased higher than they

2:24

ever had in history , yes , so

2:26

I think that that sort of put a

2:28

bit of a pause and I think it's a

2:30

repeat of what we talked about the wrap up

2:32

last year . It was a tale of

2:35

two markets really

2:37

. Yes

2:40

, I think the residential market this year is going

2:42

to be a lot more robust

2:44

. I think it's

2:46

also an election year

2:49

, which can always make things

2:51

real dicey .

2:52

Yeah , I think it's going to be , or . Last

2:54

year was a great first

2:56

five months , six months and

2:58

then the tail in a six months was pretty

3:01

terrible because everyone thought the rates were going

3:03

to go to ever . That was last year's

3:05

dynamic . I agree with you this

3:08

year's dynamic will be a

3:10

crazy first six months and

3:12

then not an interest rate

3:14

slow down , but a oh my God , the world's

3:17

going to die . Slow down . Right , because

3:19

someone I was talking to somebody yesterday

3:21

and they were like like an other agent , john

3:23

, in front of my eyes , like well , why do you think the tail ends ? I'd be like

3:25

man . Don't you remember the commercials that

3:27

start when it was we come in to start with , like in August

3:30

, that the election that the world's going to

3:32

end no matter , like if this person

3:34

party it's , I mean .

3:35

The market always slows down . Yeah , no , no , no

3:37

regardless if it's a Republican

3:39

or a Democrat coming in , it's , it's

3:41

, that's everything .

3:43

Yeah , mudd's slinging stops everything . So then

3:45

, but we , we we've , historically they've had

3:47

our best December's

3:50

, like crazy December's

3:52

in January's , after those days too

3:54

. So that's nice . Yeah , a little bit of opportunity .

3:56

We don't get that post summer

3:58

bump in an election year , right ? So

4:00

all of those people are sort

4:02

of those buyers were not

4:04

necessarily sellers , but more of the buyers are kind of

4:06

just sitting on the sideline waiting , and

4:09

I guess it is the sellers , because the sellers then usually

4:11

turn into buyers . So , yeah

4:13

, I agree , I think that it's

4:16

going to be a not

4:18

typical year this year . What is

4:20

typical , though , is generally 60%

4:23

of the inventory of the year

4:25

is always sold before the end of May , right

4:27

? So I think that we're going to . It's still going to continue

4:29

to be the same story this year

4:31

?

4:31

Absolutely .

4:32

If not even a little bit more , just

4:35

because people do know , now that

4:37

you know , the rates are coming down

4:39

and I think

4:41

a lot of the sellers who were holding off because

4:43

they didn't want to sell they're super low interest

4:45

rates , so to speak . It's a lot easier

4:48

to double your rate than triple your rate .

4:50

Yeah , I think it's easier to go from four to

4:52

six where we're at right now , versus four

4:54

to eight . I agree with you . So you have . Or two

4:56

right , those people are people

4:59

in the twos and threes .

5:00

I mean I have a two on the time mortgage .

5:02

Yeah , yeah , those people , yeah , they're going to rent

5:04

their place . That's the homes I never get in

5:06

the market . But I do agree

5:08

with you . I think that people need to realize that and

5:10

we're seeing it now . I think people

5:12

need to realize that not only

5:14

did you have the slowdown last year because the

5:17

rates it just , like you said , no

5:19

one wanted to sell , no one wanted to buy

5:21

and all of a sudden , through December , december

5:23

was nuts and then all of a sudden , december to

5:25

January to February , it's like okay , we're okay

5:27

at 6% . I've seen some

5:30

30 year jumbos come in under 6%

5:32

on sales that I've done . So you're getting

5:34

those rates and you're just going to have

5:36

which is called switching

5:38

costs . Those switching costs are

5:41

. Now you

5:43

can stomach them , like you said .

5:44

Well , yeah , and it's also people . I think

5:47

it just takes time to get used

5:49

to what is the new normal

5:51

, which is still a historic legal rate

5:53

. Right , a six is not

5:55

a bad rate . I mean , I bought my house in

5:57

the late 90s on a six

6:01

and slowly pedaled back and refinanced

6:03

and then to where I'm at

6:05

now . I don't think we'll ever see those rates again . No

6:08

, I hope you don't . That's profitable , but

6:10

I do think it took buyers a

6:12

while to just understand that this is the way

6:15

it is . So I can either sit

6:17

on the sideline and never buy

6:19

, waiting for that to happen and watching the homes

6:21

appreciate , or I can get

6:23

in now and take

6:25

the five or six .

6:27

And I want to talk about how you're saying that , because you're

6:29

saying I can get in now and take the rate

6:31

. Let's just talk about the people that

6:33

got in towards the beginning

6:35

of last year . I just want to go over some of these numbers . They're

6:38

coming . Your stats people , yes , so this is year

6:40

over year , December 22

6:42

versus December 23 . Those

6:44

are the most current full . We

6:47

do have jans have started to come in , but

6:49

this is legit , it's stamped , it's good

6:51

. So if you bought in January of

6:54

23 , January

6:56

23 , December of 22 , you're

6:58

up 13%

7:01

on your medium

7:03

home sale price . I think Chicago

7:06

alone was set . I saw

7:08

7% from December to

7:10

December . Overall

7:13

it's 5.4% in Illinois

7:15

. I mean there

7:17

are opportunities and those opportunities

7:20

are going to come again . I mean you've got

7:22

not only that , but you've got let's see

7:24

New listings down

7:26

25% . Last year , which we talked

7:29

about , closed down 23%

7:32

.

7:32

So those should go hand in hand

7:34

, right , If the inventory's down the sales are down

7:36

.

7:36

Sales are down and then the price is up 13

7:39

, which means that demand is still continuing

7:41

Right up to me . Yes , it's continuing to outstrip

7:43

the sales . One out

7:46

of four people , I read , still think

7:48

that the market is going to

7:50

crash . And that was the same as last year . People

7:53

, if you are willing , if

7:55

you're mentally wanting the market to crash

7:57

so you can get in , it's not going to happen because everything

8:00

is governed by supply and demand , and people have heard me say

8:02

that for five years now and there's

8:04

only 2.1 months of

8:06

supply .

8:07

So a balanced market hovers at

8:09

around five months , for about

8:12

five to six months of supply is what is

8:14

considered a normalized market

8:17

.

8:17

Yeah , so if no one put a house in the market in

8:19

two months , there'd be no homes for sale

8:21

in the whole city of Chicago . That's

8:24

bananas . So I

8:26

kind of want to tail this into . What you're saying is that

8:28

it's just time to get in and

8:32

you never know exactly what's going to happen . But

8:35

I think another thing to get a little bit into

8:37

the 10-year yield and I will just touch

8:39

on this and I'll make it real easy for people to understand

8:41

is right now , the 10-year is at about

8:44

4% . Let's just say give and take . That's

8:46

the 10-year note . That's what banks

8:48

borrow from right , that's what they kind of call it . So

8:51

the mortgage rates , though , are almost

8:53

at 7% . That's a spread

8:55

of almost 3%

8:58

. So that's what the 10-year is to , where the rates are

9:00

. The normal spread

9:02

historical 40-year

9:04

spread is 1.7%

9:06

. So , sophia , that means , if they

9:08

don't touch rates , if they don't even lower

9:11

rates , that they're like you know , we're good , we're staying

9:13

here . We're staying here , we're good . Just

9:16

on the premium , where it should be

9:18

historically , we drop below

9:20

6% into the 5% . That's without touching

9:22

rates . We have over

9:25

because of the last couple

9:27

of years . We overran where we should

9:29

be People in any dynamic

9:31

. There's going to be a pullback and when there's a pullback

9:34

, all of this supply and this pricing

9:36

is going to explode again . So if you're waiting

9:38

for rates to decrease , it's

9:41

too late , right , and you

9:43

can re- , I see it , I see it .

9:46

Yeah , thank you , glaze

9:48

over , but you can refinance

9:50

and people forget that part

9:53

of the equation . You can't re-get

9:55

your purchase price , but you can refinance

9:57

.

9:57

Yeah , but the price appreciation

9:59

last year happened without

10:02

rates being dropped . This

10:05

just wouldn't no inventory . And

10:07

where is that inventory going to come from ? It's

10:10

not coming .

10:11

Well , we hope , though , with the lower

10:13

rates , that some of these people

10:15

who were sitting on the sideline , like we said , we're

10:18

willing to

10:20

give up their 3% 4% that

10:22

they got during COVID and buy

10:24

. I do think we're going to see more

10:27

inventory . It is also to

10:29

timestamp this it is the Tuesday after

10:31

Super Bowl , and traditionally , super

10:33

Bowl Monday has always

10:36

been the start , officially , of spring

10:38

market in Chicago . So

10:40

I think we're going to see . I mean , I think I noticed

10:42

yesterday there was a massive influx

10:44

of inventory that went on the market , and

10:47

I think we're going to continue to see that over this

10:50

week , just with the new listed

10:52

properties coming on . So I do

10:54

think that inventory will be a little bit better

10:56

. It's my feeling .

10:57

Last year . What was the hardest thing

11:00

when you were dealing with buyers

11:02

for last year , even though

11:04

with the limited amount of inventory

11:07

that was on there , what did you find the

11:09

hardest thing to find

11:11

for your buyers ? And

11:13

did they just get exhausted and say you

11:15

know what ? Almost .

11:16

So I had a great couple

11:18

that were looking to purchase

11:20

a multi-unit because they

11:23

had listened to a lot of your podcasts

11:25

and had done a lot of research . And

11:28

it was a couple looking to buy a multi-unit

11:30

and they were thinking , ok , we'll get a two or a

11:32

three flat and we'll live

11:34

in one , rent the others out and

11:37

try to quote unquote live for close

11:39

to free . Well

11:42

, they kept getting . We were going in

11:44

on a million dollar property , going

11:46

in at 1.1 , 1.1.5

11:48

. We were getting outbid consistently

11:50

and I kept saying how Was

11:52

it cash , or was it ? Well , they were not cash , but they were

11:55

putting no people . You were losing . They

11:57

were putting down 30% . That's

12:00

a lot , which is a lot . We were striking

12:02

the mortgage contingency For

12:05

a first time home buyer . This was very

12:07

scary .

12:08

So striking the mortgage contingency . That is a

12:10

great move in very competitive

12:13

markets .

12:13

When you're not cash .

12:14

What is that so ?

12:16

what that means is you're going to get

12:18

a mortgage but you are

12:20

not going to be able

12:22

to get out of the deal , should you not

12:24

be able to get the mortgage , the mortgage

12:26

content , the mortgage is a non-issue when

12:29

you're competing on this property with

12:31

other people . It's the closest way , the

12:33

closest to cash . You should compete with cash and

12:36

that has to come with a very strong

12:39

approval letter from the

12:41

lender and working with

12:43

, obviously , a lender that people respect and don't . So

12:45

if it doesn't appraise out you have to make up the difference

12:47

. You have to make up the difference , like you would with

12:50

cash , like you would with cash if

12:53

you do an appraisal with cash . But they

12:55

kept losing out and it got

12:57

to the point where it was so frustrating for

12:59

them and I just said , listen , let's refocus

13:02

. And we just went

13:04

into a condo Because

13:06

they couldn't compete with cash . So

13:08

the thing that was very frustrating about

13:11

last year for a non-cash buyer

13:13

was that people with cash

13:15

were coming out of the woodworks because

13:17

they knew they were going to win these offers . So

13:20

I think and it would be interesting

13:22

to look up the data , maybe we can get that later how

13:25

many home , the percentage of homes

13:27

that were sold in cash , I think , were significantly

13:29

over 30% . Yeah , I was going to say significantly over

13:31

. I just saw it . Yeah , I was going to say significantly

13:34

over 30% . I did an IGI . Yeah , so

13:36

traditionally you hover in

13:38

the high 20s low 30s 38% but

13:41

last year it was so high and

13:43

I think it's because the mortgage rates were

13:45

higher than people had been accustomed to for the

13:47

last two years . But they also knew

13:49

that this was their opportunity to get these properties

13:51

and the interesting

13:53

part was I would always the properties

13:55

we lost . I mean these were relationships

13:58

I had with brokers who were like , yeah , I wish

14:00

, but this . I mean

14:02

we were coming in at 1.2 on

14:04

a 1 . And they were closing at 1.4

14:06

. So this spread was too great for somebody

14:09

to take our offer . And

14:11

my thought was always like , how is this going

14:13

to appraise ? Not one property

14:15

did not appraise on those units . It

14:18

was very crazy . On those . I

14:20

think they lost out on four and every

14:22

single one . I checked back with the brokers

14:24

and they're like , no , we

14:27

didn't have a problem Anything . What was happening

14:29

is these brokers are starting to show . Look at

14:31

, we had seven offers . What

14:33

did you say happened today ? You got out

14:35

there were 10 offers on these properties , so

14:37

appraisers did not die .

14:41

But the appraiser will say it Like

14:43

when it's over . The appraiser will call me and go . If you have multiple

14:45

offers , bring them , because then I can create value .

14:47

Well , the brokers were bringing in .

14:49

We have Because there's not many trades .

14:50

Yeah , we have six or seven offers , so

14:52

this is market right now . And

14:55

that used to be something that I felt appraisers

14:57

did not give as much credence to , but

15:00

I think last year it was such

15:02

a big deal because there were as many sales

15:04

like within six months to go back and check . So

15:07

that was something interesting that happened a lot

15:10

last year .

15:10

Five or six years ago , if you brought comps to an

15:12

appraiser like I , got yelled at a couple of times

15:14

Now I can't do my job . I

15:17

bring them now and I'm like do you want these ? Or like

15:19

absolutely , because there's no inventory . So if

15:21

you can help me with my job , they actually

15:23

like it . But they do call and ask

15:25

for that stuff . Yeah , I think that's . On

15:29

the multi units , you're talking

15:31

about historical

15:33

highs in the stock market , people

15:36

sitting on millions of dollars of cash

15:38

at highs , where rates are

15:40

at 8% and they can

15:42

borrow from their stock account

15:45

and get lending in

15:47

the 2s to 3s to 4s

15:49

and so they're buying these

15:51

places that are cap rating at 8%

15:54

and they're only paying 4% . On

15:56

Jews , they're making 4 on that . The

15:59

multi-unit market is tough

16:01

because people have so much

16:03

money in the stock market right now and they're borrowing from

16:05

it . It's tough , that's tough .

16:08

That happened a lot . It even happened not

16:10

just in multi units , but that was a specific

16:12

set of circumstances where I had fabulous

16:15

buyers .

16:16

Yeah , I had one like that last

16:18

year , but it was . They were like no , we want it , we

16:20

want a house hack , we want a house hack and this is what they could

16:22

spend . And I took them to five places

16:24

that were at their price point

16:26

and I mean they were like

16:29

these places could fall at any time

16:31

they needed one and they were like yeah

16:33

, no , no , this is how you make money Like

16:35

, yeah , no , we'll get a car though .

16:36

Yeah , not for us , it is not for

16:38

the week .

16:39

That's like you said . Like they list this stuff online , I

16:41

can make money this , this . And then , when they sit in it and I'm

16:43

like , okay , this is what you need to do , they're like , yeah , no

16:45

, let's just . Can you change that search

16:47

?

16:48

Yeah , exactly yeah . So that was something

16:50

that was real interesting about last year and

16:52

I think , you know , I

16:54

do think that it's going to continue this year .

16:57

I mean , I know for

16:59

a fact that a bunch of developers have

17:01

started to move to specifically

17:04

meet that demand right Like

17:06

one of our developers now building

17:08

homes but has three multi-unit

17:11

projects going on right now that we're about to finish

17:13

and all he's doing is buying these rundown

17:15

three flats in good areas , gutting

17:17

them . We put renters in , we

17:20

turn around , we sell it and those things are

17:22

selling like hotcakes . I see them all over

17:24

. There's developers that build three flats that are

17:26

like our project .

17:27

We were supposed to have a sales project at Montrose

17:29

. Yes , and Kenzie was a new

17:31

construction , new build commercial

17:33

on the first floor , elevator

17:36

building , beautifully done , eight , eight

17:38

flat . And when it

17:40

was all said and done , they said you know

17:42

what ? Sorry , we're going to rent this

17:44

property , yeah , the rents are so high , the rents

17:46

are so high , and

17:48

that was what they decided to do . And they're

17:50

going to hold it for a couple of years to appreciate the

17:52

property and then sell it .

17:54

And then sell it . I mean , like you were

17:56

, we were talking about the someone that I had talked to you about

17:58

this morning and I do think that it's

18:00

really nice that agents are doing this . But

18:02

we've lost out on our fourth

18:05

property , three or four . One

18:08

, I think no one sold

18:10

before we even could put the offer in . And

18:12

then another one they wanted to see that went on the

18:14

market on Friday was calling for best and

18:16

finals today at 12 pm they just marked

18:18

it . Let's see this . I'd go back to best

18:21

and final two by 12 today , but

18:23

the minimum amount

18:25

so this is for $450,000

18:27

in less . The minimum amount

18:30

of offers that we had on a property

18:32

that we were battling was 10 .

18:34

Yeah .

18:34

And I will tell you they gave an

18:36

F . This is very interesting . They gave and

18:38

I told them this too . They gave an FHA approval

18:41

. And they gave me their approval , like

18:43

a month ago on FHA , and I said , listen

18:46

, you got to go conventional 5%

18:48

down . I'm like you've got to figure out how to do that

18:50

Because I'm multiply

18:52

offers . No one

18:54

is going to want to deal with an FHA Approval

18:57

, not the approval , the inspection , yeah

18:59

.

18:59

The approval of the property yeah .

19:00

And I don't think people and they didn't know they're like what I'm

19:03

like yes , there is an inspection that

19:05

FHA does that's separate than your

19:07

home inspection . And I go when there's seven

19:09

or eight offers . Why is it going to want it

19:11

to deal with that ? And you can't give credits

19:13

. It has to be fixed before

19:16

the loan is done . They have to come back and

19:18

fix it . And she called me up yesterday

19:20

during the , she being the buyer

19:23

. No , I'm sorry , the agent called me up

19:25

to you . The agent called me up during the

19:27

negotiations where she's over viewing

19:29

all 10 offers and she said yours

19:32

is FHA , we won't accept

19:34

it because we have conventionals

19:36

. We don't want the second inspection

19:39

. And I said we can go conventional and

19:41

I had them , get a conventional , but you

19:44

have to have all your best cards out . And that's Jefferson

19:48

Park area , which I talked about , I think , a

19:50

little bit ago . Jefferson Park

19:52

, edison Park

19:54

, that whole area by O'Hare , just

19:56

still in the city Following the blue

19:58

line . Yeah , it's crazy right

20:00

now .

20:01

Well , it's because everything central

20:03

has blown up . I mean , somebody

20:06

listed a $2.2 million home

20:08

in Buptown yesterday on

20:10

a 28 by 100 . Granted

20:13

, it's beautiful , but it blows my mind

20:15

. I mean , when we moved

20:17

here , I mean I paid like $500,000

20:20

for my house and now I mean I just it's

20:22

like I was thinking about it like in comparison

20:25

to I never thought .

20:26

When I saw that , I sent it to Nikki and I go man

20:28

, what is this ? What's this ? Put our house .

20:30

Yes , Because it's just

20:32

you have to move

20:34

further out now . I mean we have to , and it's

20:37

cyclical , though , like when we moved to

20:39

Buctown , our mother said to

20:41

me where are you going ?

20:43

You're going west of the Kennedy . You're going west

20:45

of the Kennedy .

20:46

We lived in Gold Coast and she's

20:48

like where are you going ? Oh my God , are

20:50

you going to die there ? Like it

20:52

was crazy . And now it's

20:54

like a great , flourishing , beautiful neighborhood

20:56

with a lot of retail . And that was actually

20:59

what was the draw was we saw the retail

21:01

coming and thought , okay , well , something's got to happen here

21:03

. There's so much retail coming , but that's just

21:05

like the natural progression . Like we look at

21:07

Jefferson Park like , and you know who

21:09

knows what's going to happen there in 20 years , these

21:11

houses you're selling for $450,000

21:14

could hit $2 million .

21:15

It is nuts . What do you think when

21:17

you look when you're going out with a buyer ? What

21:21

do you think like things that you look for

21:23

? If there's three big things you look for

21:25

, to tell a buyer hey , listen , this neighborhood's

21:28

on the up and up and this is why I think you may retail

21:30

, okay .

21:31

So always retail and specifically

21:33

sounds crazy

21:35

, but Whole Foods and Starbucks

21:38

love them , hate them whatever

21:40

. They do so much market research before

21:42

they put anything in a neighborhood

21:44

. So if you see those sorts

21:47

of stores retail opening , you

21:49

know that they've done their due

21:51

diligence . Schools schools

21:54

are a big thing . When you buy

21:57

into a neighborhood that has a good school

21:59

or has a strong parent

22:02

involvement , pta

22:04

, you know that that's gonna and I do

22:06

think that's part of what happened in Bucktown

22:08

with all for sure here

22:11

is there was a lot of parents , a

22:13

lot of parent involvement in the neighborhood

22:15

. So I think the schools , the neighborhood

22:17

, the retail , the schools and then

22:19

lastly , transportation . I know

22:22

people are not necessarily going

22:24

downtown for work , but people

22:26

want to be able to have transportation

22:28

, whether it's not taking 25

22:30

minutes to get to the Kennedy

22:32

, you know I mean that's like the rub in some

22:34

neighborhoods or you know , all

22:37

the time I mean people are like I don't want

22:39

to be more and because of our weather here , I don't want

22:41

to be more than 10 minutes to an L stop . So

22:44

I think those are the top three things

22:46

I look for and the things I ask my

22:48

clients mostly

22:50

. School and transportation are two

22:53

of the things I always ask people , like how important

22:55

are these things and what is your criteria for

22:57

them ? But those are the three things I look for

22:59

when I'm looking into a neighborhood

23:02

that's maybe not quite there

23:05

.

23:05

There and then on the sell-in , what

23:07

are you telling sellers right now in terms

23:09

of like top things

23:12

, like when you go it has to be perfect .

23:14

Literally . I am the most anal

23:16

person . I don't even want to see a cup out

23:18

. I want it to look almost like no one

23:20

lives there . We're

23:23

competing a lot with new construction , resale

23:26

right . There is a lot

23:28

of new construct not a lot of new construction , but there is

23:30

new construction . There's also rehab

23:32

work that's going on , so you

23:34

have to be perfect to get one

23:37

chance . People will

23:39

say , well , can we try it this way ? No , because

23:41

once you've been on the market , it's out there , the internet

23:44

. Your pictures live forever somewhere . Someone's

23:46

going to find them .

23:47

Yeah , people always like can you take down those pictures ?

23:49

I'm like they're yours from like five years ago . Yeah , I

23:52

have no access to those . So the

23:54

one thing I say is it has to look perfect

23:56

Inside and outside

23:58

. People forget about- . The

24:01

first thing people see is the outside , not

24:03

the inside . We're walking up I

24:05

mean I said that too about a property we're listing . The

24:07

property is beautiful . The association

24:09

does not have the outside so pretty . We've

24:11

got to get the outside pretty , because that's actually the first

24:14

thing people see .

24:15

Right , they do , and it also represents how people live

24:17

inside the building , right .

24:18

How well are they taking care of the property ? Yeah , I

24:21

mean , if the outside looks you walk in the door and there's leaves

24:23

and garbage all over the place . Well , that doesn't

24:25

show very well . So I'm

24:28

showing up with a broom to clean up the front

24:30

of the property . So before showing

24:32

, I would

24:34

say those two the inside , the outside

24:37

and the other thing is just the

24:39

photos . The photos have to be

24:41

perfect . I mean , I look sometimes at

24:43

photos of properties and you'll

24:45

see uneven towels and a

24:48

strung cup

24:50

on the counter or things like that . So , having

24:53

your photos and making sure that you have a

24:55

photographer who's looking at all of the details

24:57

and you're looking over their shoulder for

25:00

the photos you know I'm there for the photos

25:02

. People say , oh , you're coming . I'm like , well , yeah , of course

25:04

I'm coming To controlling to not be there

25:07

for the photos . On pricing

25:09

.

25:11

How hard is it to price stuff now when we don't have

25:14

inventory ? I mean , inventory

25:16

is down 25% , sales

25:19

are down 24% , pricing's

25:21

up , so it's not a negative thing . But like , how

25:23

do you figure out ? Like , I have a listing agreement

25:26

, a listing agreement , I have a listing appointment today

25:28

and the last 12 months there's

25:30

four sales and

25:33

it's like Of comfortable properties , of comfortable

25:35

Four in 12 months and I don't like to go 12 months

25:37

back , but I have to Because I only go if I go

25:39

six months back . There's one Right .

25:44

Well , I think I don't always just

25:46

look at the clothes . I look at what's

25:48

competing . There's no actors ? Well

25:50

, you'll find some somewhere . But

25:53

I mean you have to look at clothes . I mean people

25:55

always talk about just the clothes . I always

25:57

look at actors because that's your competition , that's your competition

26:00

. I look also

26:02

in like on

26:04

TAM .

26:06

Yeah , and .

26:07

I see , and it's a lot to go through , there's a lot

26:09

of stuff to do . I

26:11

always try to push the price a little bit and

26:13

I think that working within the PLN

26:16

helps a little bit and getting

26:19

with their opinion .

26:20

Yeah .

26:21

You know , there's always the seller's price , the broker's

26:23

price and then the periphery

26:26

.

26:26

Right , and so the

26:28

PLN is the private listing network for people that are listing

26:30

. You can

26:32

always send something on the private listing network

26:34

to everyone . It doesn't show

26:36

up as pricing but you can test the price

26:39

and you can go real high or push

26:41

the envelope and if you get

26:43

it , kudos to you , you got that price

26:45

and then that creates the new market .

26:50

You can also like what we do is put the stuff in

26:52

a draft , in general less , and

26:54

we can reverse prospect , which means after

26:57

24 hours it kicks back the amount

26:59

of buyer matches at a certain price

27:01

point so you can figure out the amount . You can

27:03

figure out the amount At a million

27:05

, 9.5 , 900

27:07

. I understand that's a large spread . However

27:10

, it will turn back after 24

27:12

hours where the largest buyer demand

27:14

is for this type of product and I

27:16

think that's always a really good way to go about

27:18

it . And you know you go into a listing

27:20

, you know you're going into talk to a seller . If

27:22

you're not listing for a month , talking at

27:24

a price at that point , pinning it

27:26

down it's so far out you can't even really

27:28

pin it at that point , especially this type

27:30

of year , right , I

27:33

mean , who knows what in a month ? You know 50 things

27:35

could go on the market between

27:37

now and then . Maybe not as tight

27:39

as what you're looking for , but I'm just saying there will be more

27:41

information this time of year

27:43

.

27:44

Do you think Chicago will continue to be

27:47

starting to be a more

27:49

? I mean , I know this I

27:51

don't know how I say this the right way but do you think

27:53

Chicago would continue to be what I

27:56

consider turning into a more affluent

27:58

city as it gets more and more expensive and people get

28:00

pushed out of city central areas

28:02

? It seems like Chicago is like

28:04

.

28:05

Chicago when you mean the city , not the city .

28:07

Not Chicago land , but it just seems like when

28:10

you look at where we were five

28:12

, six , seven , maybe 10 years ago versus

28:14

New York and the coasts in Florida

28:17

, it seems like we're starting

28:19

to become expensive

28:22

.

28:25

I think our friends have gone up , though , but I

28:27

think we are still . I

28:30

think we've gone up , but I think it's happened also . It's

28:33

also gone up a lot in these the

28:35

coasts .

28:36

And we're just not there . So we don't know how I know my

28:38

own .

28:39

Well , no . So I have a friend I talked to last night who paid

28:41

$2.1 million for her property

28:43

in Florida five years

28:45

ago . Her neighbor , same

28:48

layout but faces the alley

28:51

versus faces the street , so she has the

28:53

premier tier .

28:54

Yeah , and she's in the other one's alley 4.2

28:57

. Oh Jesus .

28:58

Okay , so that's what I'm saying is that I

29:00

think that the coasts have also gone

29:03

up , but I think back to like . We've

29:06

been selling real estate for 22 , 23

29:08

years . Did I ever think that I would

29:10

see a million dollar one bedroom in

29:12

Chicago ? No , no . Right

29:14

, so you have to pay if

29:16

you want to be in a luxury building I mean , okay , it's

29:18

not a 900 square foot , but it's a

29:20

1400 square foot one bedroom

29:23

condo in a nice building , yeah , so

29:25

that's between $800 and a million dollars . I

29:29

just created it On Michigan Avenue , but

29:31

that same condo in

29:33

Manhattan is two

29:35

to three times yeah , so I do think

29:37

our prices

29:40

are going up , but I think it's

29:42

equally to- . We still have that surprise

29:44

we're still way less expensive . I

29:46

mean , we showed a multi-unit

29:48

on Fullerton Parkway to

29:50

a New York buyer and he could not believe

29:52

the value of the

29:55

property . And

29:57

we were having this conversation and he said it's

30:00

so affordable it blows his mind

30:02

. Not only the purchase price of

30:04

the property but the quality

30:06

of the unit and the finishes and the lot

30:08

size for the reds , like

30:10

he can't believe that someone is getting

30:13

a well to top floor but

30:16

a top floor studio for $1,900

30:19

. Mind you , we just took the rent from $17

30:21

to $19 on one flip on one

30:23

lease .

30:24

But to him he's like this- , but the cap

30:27

rate is much greater than New York too

30:29

. So if you Right .

30:31

But the rent . He said that in Manhattan

30:33

would be like $6,000 .

30:35

Yeah , but the price of the building would be Right .

30:37

But so that was it . The only thing he said that was

30:39

like a flip was that our property

30:41

taxes are high .

30:42

So think if you didn't have the property

30:44

tax issue , because the property tax is what is

30:46

it is an issue . Yeah , well , that's a piece of

30:48

pricing down . Yeah , it is an issue . So

30:50

you think you're getting a good price , but then

30:52

all of a sudden it's like oh , on top of it , I'm paying a million

30:55

dollars in mortgage payments to

30:57

taxes , because that's what you're doing , right ?

30:59

yes , the tax Right , exactly , it's another billion

31:01

. So what Jason's saying is the equivalent of property tax

31:03

would allow you another million

31:05

dollars .

31:06

So if you could spend , a million and a half dollars . If we had normal

31:08

property taxes , you actually could spend 2

31:11

and 1 half 2.2 . So

31:13

when you're going down to Florida and taxes are nothing

31:15

, you're like , OK , that's why

31:17

the- . Well , I can spend- . Well , I'd use as much as I

31:19

could spend . It's much more buying power .

31:21

It's more buying power , right ? So

31:23

yeah , that was so I do think

31:25

our prices have escalated

31:28

, but I also think they've escalated everywhere

31:30

else .

31:30

I mean for you . You're clear to say that we have a property

31:33

tax problem . It's blowing my

31:35

mind right now .

31:36

Well , because he's also

31:38

in finance right and

31:40

he teaches economics . So

31:42

for him he was

31:44

like this 2%

31:46

property tax , and then

31:48

we went down a rabbit hole of where the property taxes

31:51

go and how . That's a whole other story

31:53

, but yeah , it

31:55

was shocking to him .

31:57

When you get your property tax bill . Everyone just

31:59

got right . We just got it in like a couple weeks , yes , last week

32:01

, when you get your property tax bill . The top of it has

32:03

your pin number and then it has what your

32:05

property tax is . There's

32:07

it's three sheets . Take

32:11

a look at the middle .

32:13

That tells you- .

32:14

The middle is the pressing Going to , and it

32:16

brings down and it also tells you on

32:18

all the way , on this side it'll say percentage

32:21

of shortfall yes , and

32:23

there is nothing that's underneath

32:26

40% on that percentage of shortfall . So

32:29

it's it's another

32:31

podcast .

32:32

At any rate . So , yeah , the

32:34

tax thing , I think , is the biggest issue

32:37

that we face . That might be different

32:39

than Florida or New York , I think . The

32:42

taxes in California , I think they're

32:44

close to ours .

32:45

They're close , but they're set . They're so high , but they're

32:47

set Right .

32:48

So in California your property tax is

32:51

what it is at the time of purchase . It doesn't

32:53

readjust annually . People who move

32:55

here from California think it's bananas

32:58

.

32:58

They tried to do that and it was- . No

33:00

, they tried to do like a triennial assessment

33:02

in California and it was like what

33:05

? And there yeah , well , there's people that own homes for

33:07

you know 50 years , that they're paying taxes

33:09

. I can't they're paying here . Yeah , no

33:11

, no , no , but they don't get reassessed .

33:13

I know .

33:14

So it's like- .

33:15

I mean , but that's what happens to elderly

33:18

.

33:18

Yeah .

33:19

People who you know . When you see people

33:21

who are fighting the gentrification

33:23

, the reason is is there I mean unfortunately

33:26

being pushed out of their homes because not

33:28

because they can't afford the home , they can't afford the property

33:31

tax anymore .

33:31

Yeah , but why should and I agree with them why should they be penalized

33:34

with the fact that they've been there for 50 years ? They

33:36

didn't establish that neighborhood , they didn't paint

33:38

that neighborhood .

33:39

They did . And that's

33:41

the rub is that , like you want

33:43

gentrification work , there

33:46

has to be a but they're also

33:48

making- .

33:49

They're making you know 300% yeah .

33:52

But they also stuck

33:54

it out .

33:54

Yeah , no , I agree with you , you know If

33:57

you made it through the 70s , here the 80s , yeah .

33:59

I mean , bucktown is a very

34:01

different neighborhood today . Yeah Than it was

34:03

. When we moved to Bucktown . I mean

34:06

I was the nicest house

34:08

on the block and now I'm the

34:11

least next house on the block and so and this is

34:13

kind of right .

34:13

So look at percentage of home appreciation in 30 years 300%

34:16

. If

34:18

you did your numbers , that's probably dead on . Yeah , I am 10 years 103%

34:22

, Five years 54% and one year

34:24

7% , Because last year we appreciated 7%

34:26

. That is crazy . Well

34:29

, I'm living that yes , no

34:31

, no , that's what I'm saying . That's bananas . And

34:35

then the five years at 50% , that's nice . So you've got to stay

34:37

.

34:39

You know and that's when first time home buyers right . They

34:41

always say , well , I'm just going to

34:43

stay here for two years and leave . And I

34:45

said , well , then don't expect to make much money because you're

34:47

going to have commission fees and you're going to have transfer

34:50

taxes and all of that . 7%

34:53

.

34:53

Yeah , I said you got to stay .

34:56

You got to commit to stay or have a different

34:58

mindset on that ? Yeah , and the other

35:01

thing people , I think , always forget is when they're thinking about

35:03

well , I just broke even . Well

35:06

, no , you didn't , because then you ended up living free , and because

35:08

then you ended up living free for how many years . Yeah

35:11

, no one takes no one takes the cost of living

35:13

into consideration when they sell , and

35:15

that always frustrates me and I'm like no

35:18

, that's money .

35:19

Yeah , that's utility . I mean you would have been renting

35:21

somewhere else . No one takes that .

35:23

They don't take that and they don't take the tax savings

35:25

, the deductions that they get it just Well , I think it's

35:27

really hard because all we hear is how bad our taxes

35:29

are , you know ?

35:31

Yeah , but it's still a deduction . Not the property

35:33

, but the federal . All

35:36

right . Any last words

35:38

about 2024 ? I

35:43

mean , is there going to be buying an opportunity ? Do

35:46

you jump in right now or do

35:48

you wait for the election and

35:51

possibly slow it down then , but maybe

35:53

not to the inventory you need .

35:55

Well , I think that you

35:58

know I always say that the best

36:01

time to buy it is you know I'm

36:03

a real estate agent , but the best time to buy to get the best

36:05

deal is in the winter months here .

36:07

Yeah .

36:07

Right , you

36:10

have to run the risk and you have to decide what's

36:12

important to you . Do you need to get into a house

36:14

immediately or

36:17

are you willing to wait a little bit and maybe

36:19

not get everything you want ? Get

36:22

most of what you want and then turn what you're buying

36:24

into what you wanted . Right

36:26

, doing those upgrades . I have

36:29

a client who bought a property on

36:32

Wood Street in a loft building

36:34

that needed a total rehab and

36:36

we got a screaming deal . Last

36:38

fall I think we paid

36:40

like $7.20

36:42

for a loft . The neighbor

36:44

loft , literally right

36:46

next door , listed yesterday for $1.3

36:50

. I sent him the listing and

36:52

he's like okay , sophia , it's time for you to come

36:54

over and help me get on my rehab . All right

36:56

, so that property , because

36:59

it needed work , did not sell in the

37:01

spring high spring market . It

37:04

was happenstance that he came and we were

37:06

looking in the fall months and

37:09

we got like $100 and something thousand

37:11

dollars off because the seller was like okay , if I don't sell

37:13

it now , I'm going to have to wait till the following spring

37:15

. So I do think sometimes there is

37:17

opportunity if you can wait

37:20

and if you're willing to

37:22

do . I have a client , adriana Sweat

37:24

Equity , if you're willing to put a little bit

37:26

of Sweat Equity into it . My client is

37:28

floored that he could almost make 40%

37:31

on his money .

37:32

And that ugly houses are the best .

37:33

Yeah , so yeah right , there's

37:37

a sign at the exit on our mated webuyuglyhousescom .

37:39

Ugly houses , I'm plugging that , but yeah , just

37:42

to make money .

37:44

So I do think if you got to get in the market , you

37:46

got to get in the market and the most inventory

37:48

is going to be now . But if you have

37:50

some imagination , a

37:52

little bit of money for some rehab

37:54

and some waiting time , I

37:57

do think that fall and

37:59

winter are great months to buy

38:01

for a deal .

38:02

For a deal . All right , Thank you

38:04

so much . Thanks . That

38:06

is our 2023 and kind

38:08

of what we see for 24 . Don't

38:11

forget to subscribe to the podcast . Download

38:14

it . We're on Spotify , Apple

38:16

, basically every live for and

38:20

thank you so much and we will see

38:22

you in a couple of weeks . Thank you

38:24

.