Know Your Worth! with Kevin Rocio, Commercial Real Estate Broker & Influential Chicagoan

[00:00:00] Speaker A: We're back with coffee is foreclosers. I'm your host, Tim Brigham. And today with me is a legend in the commercial real estate world, Kevin Rocio, K Rock. Pleasure to have you, brother. [00:00:10] Speaker B: Thank you so much for having me. [00:00:12] Speaker A: So, those that don't. I mean, I know you well, I've known you for many years. But those who don't know you, please. [00:00:17] Speaker C: Tell me about Kevin. [00:00:19] Speaker B: Born and raised on the west side of Chicago, moved to the suburbs 1977, graduated, became an investment banker. From there, got bored. Moved back to Chicago in 1991 as a lender. And I affectionately say that I've been a lazy person all my life. So what I mean by that is a lender. While everybody else would go to establish relationships with realtors, I established relationships with the unions. [00:00:48] Speaker C: Oh, wow. [00:00:49] Speaker B: And so, as a result, grew my business to a point where in 1997, was the fourth largest lender in the country behind Wells Fargo. Wow. And then retired when we sold our company to american street. No. American home mortgage, which was publicly traded. I stepped away. And then in 2007, when National City was being purchased by PNC, I retired from lending, took two years off, and decided that I wanted to stay in real estate. But I didn't like the residential route, so I decided to become a commercial broker. [00:01:28] Speaker A: Why did you not like the residential route? Commercial? [00:01:31] Speaker B: I jokingly say, because I don't like people. [00:01:33] Speaker A: Okay, fair enough. [00:01:34] Speaker B: I have very poor interpersonal skills. And what I mean by that is that I'm an analytic person. No emotions. I don't care. And people sometimes get turned off by that, but it's just. That's my personality. So, started commercial real estate and quickly became number one commercial broker for app properties. Now run the number one team for commercial team for app properties. [00:02:00] Speaker A: Well, I'll pause here and I'll say that everybody that meets you either loves or hates you. [00:02:05] Speaker B: I'm a social introvert. [00:02:07] Speaker A: You're amazing, Kevin. You command the room every time you walk into it. And I think that there's some beauty behind what you just said is that you kind of Remove emotion out of things, and you look at the data, right? Something that you say on a regular basis. [00:02:20] Speaker B: What is the facts? [00:02:21] Speaker A: What are the truth? [00:02:22] Speaker C: Right. [00:02:22] Speaker B: So the difference is on the residential versus commercial. For example, let's say where we're at was an apartment. People come in and they make their decisions on superficial things, carpet, walls, colors, appliances, all that. [00:02:36] Speaker C: Commercial. [00:02:36] Speaker B: People walk in and say, how much rent can I get for this? Yeah, different story. [00:02:41] Speaker C: It's about math. [00:02:42] Speaker B: It's all about the math. So I just follow the math. [00:02:44] Speaker A: Who are your mentors in the business? [00:02:47] Speaker B: So growing up, it was Leia Coca. Throughout my career as a lender and even as a realtor, it's Thad wonk. [00:02:56] Speaker C: Wow. [00:02:57] Speaker A: So he took you into the commercial. [00:02:59] Speaker C: Side of it, too. Yeah. [00:03:00] Speaker B: So he approached me in 2007 as I was retiring. However, I didn't know anything about commercial. It was seductive. So I said, let me go work for a national firm for two years, and I'll come back in 2009. In 2009, it came back, and here we are. [00:03:17] Speaker A: What advice did he give you when. [00:03:18] Speaker B: You started stepping into it? It wasn't really any advice. One of the things that he said that he really liked about me was that what did he tell cranes? I was a true marketer if there ever was one? [00:03:32] Speaker C: Yeah. [00:03:32] Speaker B: Okay. [00:03:32] Speaker A: I'd say that, yeah. That's something I take from you every single time, is how to command your brand. [00:03:38] Speaker B: Right? Absolutely. [00:03:39] Speaker A: What is the most important piece? [00:03:40] Speaker B: That's what I tell people now. They say, what do you do? I'm in brand management. [00:03:43] Speaker C: Yeah. [00:03:44] Speaker B: I'm surrounded by great people, but I manage the brand. [00:03:46] Speaker A: I think you're the epitome of what know preaches. They're a marketing company. Right. [00:03:51] Speaker C: Thank you. [00:03:52] Speaker B: Absolutely. That's exactly what it amazing. [00:03:54] Speaker A: So, you know, you're a very successful agent. You've closed quite a bit of business over the years and made quite a bit of name for yourself. Talk to me about COVID Right? Talk about what happened and what we're experiencing now. [00:04:10] Speaker B: So I think Covid was probably one of the best things that ever happened to America. Wow. And I'll say this before COVID we were relaxed and we were handed everything. And I'm going to use a personal. So for me, personally, I freaked out when Covid happened because it was like, oh, my God, how am I going to do my business? What have you? So we adapted quickly, and then we got into this new groove, working smart and hard at the same time. And the growth from 2020 to 2022, I still sit back and go, wow. And it's because I have to change the way I work. For example, I no longer personally handle every transaction that I'm compensated for. So what I decided to do is there are agents. There's 4000 agents within app properties. And so what I did was if someone on the north Shore has an apartment building they want to sell, I have them take the listing. I'm the analyst behind it, so that they take the volume credit. That way I can be in multiple places at one time. Wow. That's what Covid did. Because before I'd be chasing those deals. [00:05:27] Speaker C: Yeah. [00:05:28] Speaker A: I mean, you touched on a couple of things, right. I think the start of it is that tough times make tough men, right, and women. Right. And then tough men and women make soft times, which then soft men and women. [00:05:44] Speaker C: Right. [00:05:45] Speaker A: And it's just the cycle. [00:05:45] Speaker B: Perpetuate the cycle. [00:05:47] Speaker A: I think this Covid brought out what we really need to do, what we need to get back focused on, right. And separation is there. But you talking about how much growth we had and all the things that happened, all the fear that happened overnight, because I think as mortgage lenders, we had the same problem. [00:06:06] Speaker C: Right. [00:06:06] Speaker A: I can't go to the office anymore. I can't command my team. I can't do these things. This is what's so special about you that you figured out, listen, maybe I need to work smarter, not harder. Maybe I need to go and network with more people, more than I already do, share the knowledge and be compensated. [00:06:21] Speaker B: For it that way. And that brings up a good point. So this year, as we were returning back to the office, I said, okay, what should I do? What should I do? Because one of the things I noticed when we were at home, agents would call me to ask, how do I put this deal together? And it could be from compass from exit to across the board. So I said, you know what? I'm going to put together this class, and I'm going to teach one agent a week to how to properly price two to four units and how to properly price smaller apartment buildings. [00:06:55] Speaker C: Why? [00:06:55] Speaker B: Because when they have a client in front of them, they need to understand and not trip up and lose the opportunity. So the goal was, by the end of the year, 52 agents. As of last week. When we finished with Lee Marcus's team, we had 350 at property agents that we taught and about 25 outside agents that paid to be taught. [00:07:17] Speaker C: Wow. [00:07:18] Speaker B: Okay. And so what that does people say, what does that mean? Well, that means now I got 355 agents for bat properties, that when a client says, I'm interested in two to four, they can at least engage the conversation. And then if it's something that makes sense that I work with them, they're out doing the showings, they're out doing the inspections together, we're doing the negotiations, and we just cover more ground quickly. [00:07:39] Speaker C: Yeah. [00:07:40] Speaker A: It's amazing, right? I think in your world, especially through social media and things, you'll see things get posted on. An agent will dabble in the commercial space. [00:07:50] Speaker C: Right. [00:07:51] Speaker A: They jump out from residential and they think well, the client wants to sell this building. What's interesting is you'll see again, social media tags. And I don't necessarily agree with making fun of agents or any of that, but that's what ends up happening is that how did you come up with your purchase price? And the agent will say, well, that's how much the client wanted to sell it for. [00:08:09] Speaker C: Right. [00:08:10] Speaker A: Not understanding cap rate or any of these other things. What advice would you have for any agents that are looking to dabble in commercial? [00:08:17] Speaker B: Don't dabble. Get yourself a mentor. If this is a product type that you want to sell, at least until you understand what you're selling, you should have a mentor, someone in your office. No matter if, like I said, if it's compass, ad, Sotheby's, what have you, someone that knows how to do this business, do it together. Make sure the numbers are there. Because in this class, for example, I teach and I show how many canceled and expired two to fours and apartment building listings there are in MLS. Why? Because a seller says, hey, I want to sell my building for $4 million. You do all the paperwork and put your mls for $4 million. And then a commercial broker comes through and said, that building is only worth 3.2. Why? Because the data doesn't match the numbers. And that's what a mentor will figure out quickly. [00:09:03] Speaker A: That's great advice. I think it really has to do with the income, not the actual that creates the sales price, not the other way around. [00:09:11] Speaker B: The combination of the income and the expenses that are tied to it to produce that income. [00:09:15] Speaker C: Yeah. [00:09:15] Speaker A: That's incredible. So switching gears, right, Covid, we had this reaction. What are you seeing in the market today? Are you seeing demand? Are we seeing this doom and gloom that the media is painting a picture on? [00:09:29] Speaker B: Okay, so I'm going to separate it like this. Your primary residence is a liability on your financial statement unless it's free and clear. Okay, so here's the difference. As the market changes, as the economy changes, you decide you do not want this liability anymore, and you're searching for someone who will take on that liability. [00:10:01] Speaker C: Right? [00:10:01] Speaker B: Okay, commercial. We don't care what's going on in the world because our pricing is an income producing asset. If someone is ready to step out for generational, they're retiring, whatever. There's someone that needs that income producing asset. So I'm as busy now as I was in 2021, which was a record year. [00:10:22] Speaker C: Wow. [00:10:23] Speaker B: Okay. We're running about 40 leads a week. [00:10:26] Speaker C: Wow. [00:10:27] Speaker B: That I have to filter through. And it's mind blowing. But like I tell my team, this is what we strive to build. [00:10:36] Speaker C: Yeah. [00:10:36] Speaker A: I mean, it's amazing. I'm seeing reports come out that are talking about we're starting to see vacancy factors drop, right? Lowest levels we've seen in 15 years. I think it's six one or something like that. [00:10:47] Speaker B: Once again, because the 99% are the biggest consumers. And just think about COVID I can't tell you how many Amazon buildings or trucks I saw at apartment buildings when I would go visit. Where's that money coming from? It was subsidized. But unfortunately, we live in a society that's impressed by superficial things. [00:11:11] Speaker C: Wow. [00:11:13] Speaker B: Reduce vacancy. It's not surprising. And there's another thing that's floating around the air. People are responding to chase, spending a billion dollars for a real estate portfolio. So here's what most people seem to quickly have forgot. In 2008, due to the record number of foreclosures and abandoned houses, the government had to put up $1 trillion in neighborhood stabilization funds. And they went around the United States and they went to certain developers, they said, put these houses back together, put them back on the rent, roll till the market improves and sell them off. So the blackstones and the chase of the world are being proactive this time. And they're creating rental housing because if the economy changes, the last thing you want is someone who could barely afford the house and afford the upkeep. So I think it's one of the smartest move ever. It's a hedge. [00:12:10] Speaker C: Yeah. [00:12:11] Speaker A: That makes a lot more sense. It gives a lot more clarity as to why they're jumping out there. [00:12:14] Speaker B: That's all this. [00:12:15] Speaker C: Right. Wow. [00:12:18] Speaker A: What do you think has happened to the buyers and sellers of COVID It sounds like we just see increased demand. Is there more availability? Is there less inventory? More inventory? [00:12:26] Speaker B: So I'm one of these people that when I hear stuff, I say, don't cry me at river, because the same person that's complaining about housing costs, you go to Oakbrook mall, you go to any of the malls, it's packed. Okay, so if you don't have money for housing, then what are you doing here? You can't park. I mean, you can't get in a parking lot. [00:12:48] Speaker A: So that's interesting. [00:12:48] Speaker C: Right? [00:12:49] Speaker A: So social media with realty, right, and sales professionals, we all image, right? [00:12:54] Speaker B: Sheep are led to slaughter. [00:12:57] Speaker A: What would you give us advice in regards to a realtor's image right now? If maybe they're struggling with sales, I don't know. [00:13:03] Speaker B: So if they're struggling with sales, they just need to reevaluate whether or not this is the best career for them. [00:13:08] Speaker A: Sure, fair enough. I mean, I think a lot of these think that their image has everything and they have to have this Persona and drive this ridiculous car. And what I get from you is that that's great, but really the knowledge basis, right? You actually know your craft, know the real map. [00:13:25] Speaker B: You need to understand why everything goes on around you. Like I was having a conversation earlier, people were complaining about gentrification in South Shore. And I said, listen, my people had 40 years to make a difference. People complain about what happened in Logan Square. The Hispanics had 40 years to make a difference. Some to cry your river. Sorry. [00:13:49] Speaker A: As a token, one guy, I can't have skills. [00:13:52] Speaker C: Fair enough. [00:13:52] Speaker A: Okay, what do you think? If you had to pick one skill set that you mastered that you can attribute to making you a successful agent, what do you think that is? [00:14:01] Speaker B: Not caring what other people think. [00:14:04] Speaker C: Wow. Yeah. [00:14:07] Speaker A: Truly, actually meaning what you just said is an amazing skill. Some people say it, but they don't necessarily mean it. [00:14:12] Speaker B: So listen, I cannot control what you think of me. And it's not my job to change you. I can only be me. And you either like or don't like. But if you don't like, it's okay. There's nothing wrong with that. We don't have to be liked by everyone. [00:14:29] Speaker A: Yeah, that's a great point. I mean, we became this society where we have to like everybody. And unfortunately not everybody gets along. [00:14:36] Speaker C: Right? [00:14:38] Speaker A: What do you think the hardest part about being an agent is? [00:14:42] Speaker B: Being consumed by the other agents around you. [00:14:45] Speaker A: Really? [00:14:47] Speaker B: For example, and I was victim to it too. So everybody post closings, volume sales, all that. And then once I took the National association of Realtors commercial achievement award, I said, you know what, unless I can get a higher award, this stuff doesn't know. I just looked at an agent. This is a true story. I'm not going to say the name. I emailed an agent to give them an update on their client that they referred to me. Right. I swear to God, from here. So he had one statement. Hey Krock, thank you so much for the update. This is how long his signature line was. Okay, dude, are you in real estate? The only thing clients care about is whether or not you are good at your craft. Posting what you achieved in the previous year is not the answer. All right? Transferring value is why should I work with you versus the other person? [00:15:55] Speaker A: I think the only counter I would have, right, is that I find that some clients want to see that who they're working with is successful. [00:16:02] Speaker C: Right. [00:16:02] Speaker A: But the only way you're going to be able to do that is providing value. It has to be so concrete, honest, real value, to then back it up of, like, I'm not just making things up. [00:16:11] Speaker C: Right. [00:16:11] Speaker B: The value gets you in the door. Your accolades qualify you. [00:16:18] Speaker A: Fair enough. [00:16:18] Speaker C: Fair enough. [00:16:19] Speaker A: That's a great way to put that. I like that a lot. [00:16:21] Speaker C: Yeah. [00:16:24] Speaker A: I'll be honest. [00:16:24] Speaker C: Right. [00:16:25] Speaker A: You probably have the busiest social media out of anybody I've ever met. You are everywhere. You know everyone. You're every party. How do you keep up with all this? [00:16:33] Speaker B: So, keep in mind, most real estate brokers are real estate brokers only. So I'm on the board of a publicly traded cannabis company. I own a franchise of chocolate franchises. And then I have real estate, and then that's just me. Then my family has auto dealerships. We have two country clubs. So what I do on social media is, because, of all of us, I'm the most creative when it comes to that. However, it's funny, because I say this all the time. I appear to be everywhere, but I guarantee I'm at home every night by 09:00. [00:17:15] Speaker C: Yeah. [00:17:16] Speaker A: People that are close to you know that. True. But here's the thing, right? You're nice to everybody you meet, right? [00:17:24] Speaker B: I respect everyone. [00:17:25] Speaker C: Yeah. [00:17:26] Speaker A: And you continue to network with everybody and you go out in your presence. Right. [00:17:29] Speaker B: People think of you because the thing is, your life is as important as mine. So I want to take the time to get to know who you are. Can I add value? I don't know. We don't know. My mother's furnace went out this weekend, and after some rogue HVAC guys, I called one of my clients, who's a commercial engineer, and he referred someone to me. They came out within the 24 hours, and from a $6,000 bill, it was actually $150. [00:18:03] Speaker C: Wow. [00:18:03] Speaker B: Now, I've only met him twice at a nicar meeting, but we had lunch a couple of times, and that was it. And I felt comfortable to reach out to him. [00:18:11] Speaker C: Wow. [00:18:12] Speaker B: That's what it's about. [00:18:13] Speaker A: Listen, I'm from Arizona, right? And something I had to learn was how Chicago does business. I love the west coast. I love how friendly everybody is. And you come to these big cities sometimes it seems aggressive. It's probably the best word to use. It's not aggressive. It's that. The qualifications, right? Everybody's got a guy. You got to earn somebody's respect enough to be their guy. [00:18:36] Speaker C: Right. [00:18:37] Speaker A: And once you're their guy. You share that with everybody because you want to support them and help them. [00:18:42] Speaker B: Absolutely. [00:18:42] Speaker A: Network out there. And if anybody I'd find that was a master at their craft of networking out there and becoming the guy, it's you. [00:18:49] Speaker B: This is the only time I'm going to quote Kanye. All right. So you never know who needs who, right? So if your friends can't use you for your contacts, you are useless. [00:19:06] Speaker C: Wow. [00:19:09] Speaker A: That's a Chicago way of putting things. [00:19:11] Speaker C: Fantastic. [00:19:12] Speaker A: So you run a team, you coach, you mentor, you. Most recently held. I think you held the biggest class. [00:19:16] Speaker B: You'Ve held so far. How many agents did you coach? It was 40 in one class. 355 total for the year. [00:19:23] Speaker C: Wow. [00:19:24] Speaker A: That's incredible. And I'm sure you changed some lives and you continued to do that. I have to ask you, who is your hero? [00:19:31] Speaker B: My mother. [00:19:32] Speaker C: Wow. [00:19:32] Speaker A: Tell me about your mother. [00:19:34] Speaker B: Single black woman in the 60s raising two kids on the west side of Chicago at a $30,000 a year salary. Somehow she put both of us through college, and to this day, she goes to church every week. Choir. My dad had a heart attack and a stroke at the age of ten years ago. They were divorced for 15 years prior, but she stayed with him every day up until he passed away this past October. [00:20:01] Speaker A: Condolences. [00:20:02] Speaker C: I'm sorry. [00:20:02] Speaker B: I didn't know that it was his time. [00:20:03] Speaker C: Yeah. [00:20:04] Speaker A: That's beautiful, though. She sounds like an amazing woman. [00:20:06] Speaker B: Everybody knows Mama Rocio. [00:20:08] Speaker C: That's awesome. [00:20:08] Speaker B: Tough lady. [00:20:09] Speaker C: That's awesome. [00:20:09] Speaker A: I bet you it's where you get it from. [00:20:12] Speaker B: I'm just so proud of her. [00:20:14] Speaker A: I have to ask you, this exercise, right? I think it's cool. Tim Ferriss does this and I think it's awesome. So if you had to pick a quote, anything doesn't have to be from somebody else. Your own quote. And you put it on a billboard for everybody to see. What would it be? [00:20:28] Speaker B: Believe in yourself. [00:20:29] Speaker A: Believe in yourself. Tell me why. [00:20:31] Speaker B: That's it. [00:20:31] Speaker C: That's it. That's it. [00:20:32] Speaker B: Just believe in yourself. Know your worth. [00:20:34] Speaker A: Simple, to the point. Believe in who you are and what you're about. [00:20:38] Speaker C: And that's it. That's it. Just keep moving. [00:20:40] Speaker A: That does it for. This edition for coffee is for closers. But honestly, Kevin, I can't thank you enough. You're an incredible human being. You're humble, and I think you've inspired those that have just listened to your story today. [00:20:49] Speaker C: Thank. [00:20:50] Speaker B: Thank you. Thank you for having me. [00:20:51] Speaker A: Thank you for your time. And I appreciate you always.