Learn about Real Estate by one of the premier Real Estate Investors in New Jersey. Each week Joseph J. Zoppi will be talking about investing in real estate including buying and selling houses and apartments. Understand how the economy, the Fed and world events impact real estate and how to adjust to these dynamics.
Templar Real Estate Radio Show for January 4, 2020
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The following program was paid for by Templar Real Estate. The views and opinions expressed on this program are not necessarily those of the staff and management of WMTR. As always it is advisable to consult a professional before making a major decision. It’s time now for the Templar Real Estate Talk Show. Here’s your host for the program; Joseph J. Zoppi.
Joseph J. Zoppi:
Hi, my name is Joseph J. Zoppi; real estate investor, consumer advocate, author, and managing partner of Templar Real Estate Enterprises and soon to be president of Templar Giving Hands, a nonprofit group that helps people in need including inner city youth, the elderly and their financial needs especially around housing and food, single moms, and those individuals that were formerly in the sex trade. This is probably one of the most important things to Templar, our nonprofit organization that we’re building out.
We’re going to be donating 10% of all profits to this company. We see so much need for this, especially in the area between the demographics of 55 on up. There are individuals that you don’t realize what they’re going through, but we do because we come into these situations, we’re going to buy their house and we can see the financial distress they’re under. We had one situation that just occurred where a woman called in and said that she was going to lose her house within three days. So, we jumped right on it. She had a tax bill due of approximately $109,000. Now, we had that money for her, but of course we had to do our due diligence. We picked her up. She staying at a boarding house, a one-room boarding house where she was living. She had previously been sick for two years and she left her residence, and she’s staying at this boarding house now. So, we went over to the boarding house, it was broken into two other times before that, so we had contacted the police to take a look at it and make sure that there were no squatters in there.
They came, but they said they couldn’t enter the property and that was because they were concerned about the structure and whether it was sound. So, they did a walk around and then we went in anyway. We looked around and the place was falling apart over two years of no heat, no electricity, but we had a good sense of what needed to be done. We get these types of situations all the time. One of the sad things was that in talking to her, she said she gets Meals on Wheels and it’s two meals a day she gets. A lot of times she’s hungry. I said okay, I drove her there, I said let’s go, we’re going to stop off at the ShopRite and let’s pick up some food for you. She was ecstatic. She goes, “Joe, you don’t need to do that.” I said, “No, this is kind of important to us.” We see this all the time, these situations that you wouldn’t believe. You don’t think it happens as often as it does. I went shopping for her. We got some hot meals, but unfortunately I couldn’t do too much shopping because she said she had a small refrigerator and the group refrigerator everybody takes her food. So, we did the best we could. She was ecstatic and we’re working through the situation right now to hopefully buy her house. She has not only the tax lien, but she had another $100,000 of other liens from the State of New Jersey as well as some other things. We’re working with her. We’re going to try to chew down those liens and then be able to purchase her house and then she can have some money. We encounter this a lot and I’m very grateful that Templar can help individuals like this out. The entire staff, that’s our goal, to help people out.
We also sell houses directly through the MLS. We have agents that do that. We’re very good at that, but one of the things that we’re really strong at is helping these situations that are very tricky and most people can’t do that. Another thing that we do is we take individuals’ money and we’ll invest it in different properties and they’ll get a good rate of return, which his good in these days because right now we have the stock market hitting all-time highs again and eventually it’s going to pull back. As you get older the unfortunate thing is, is that there’s not too many places to invest your money except in the stock market the way it is. We have low interest rates so CDs or anything like that is hardly getting any rate of return. That’s a bad situation. We have a number of individuals that are in their 50s, 60s, 70s that have invested with us and they’re in semiconservative type investments that are backed by real estate and they get a guaranteed rate of return.
We had one situation where a woman, she was 65, she invested $60,000, gave it to a financial advisor. In three months she had lost 20% of her investment because it was invested in an aggressive real estate stock fund. At that time, you’re not seemed to be investing an individual’s funds in something aggressive when you’re 65 years old, it needs to be conservative. We took the money over and now she’s getting a good rate of return. Unfortunately, she had to lose that 20%. We see that all the time and it just incenses me that these types of things happen. It happens more often than you realize. That’s why we’re here, to educate people and give them real life experiences of what we go through and the things that you should be looking for. What I’d like to do in the next segment is talk about buying houses for cash as we do, selling houses, and investing in real estate. Thank you.
Joseph J. Zoppi:
Hi, welcome back. Again, this is Joseph J. Zoppi, managing partner at Templar Real Estate Enterprises. I want to go over a couple of things first. We’re currently listing a property, it’s 59 Crestmont Road in West Orange. It’s a beautiful split level, four bedroom, two bath. Jump right onto Zillow, you can pull it up and that’s 59 Crestmont Road in West Orange, four bedroom, two bath going for $455,000. There’s a lot of upgrades. I think if you look at, you’re interested in that area, I think that’s a house to really look at and consider. Like I said before, we do list properties, we do sell properties the traditional way.
What I’d like to go over right now is the different means of selling your house. One is, obviously, the traditional way. There’s pros and cons to that. There’s also means of selling your house for cash. That’s what we do. I’m going to tell you a little bit about how we do it and some of the pitfalls you have to watch out for. Normally we’ll receive a call. We’ll talk to the individuals that’s interested in selling the house and get some general information; size of the house, number of bedrooms, number of baths, where it’s located. That’s about it. Then, we’ll come out, look at the house and then we’ll present an offer. It’s pretty easy. One of the positive things about this is that you don’t have to worry about anything that’s currently broken, anything that’s not cleaned up. All of this is taken care of by us. That’s a good thing because there’s so much angst in selling a house and all this is taken away. You don’t have to worry about if there is a lien on the house. You don’t have to worry if there’s water in the basement or anything. We’ll look at it and we look at it with open eyes.
One of the things that we are very careful with is being discreet. A number of individuals that sell their house this way, they really don’t want to be publicized and hit. They don’t want the neighbors to know. We’re very sensitive to that. We’re very sensitive to a lot of these situations because a lot of them, again, are sometimes financial distress situations. Not all, but a lot of times. There’s situations where we get calls from the siblings and they’ll say my parents’ house is a hoarders house, there’s tons of junk in it. They feel very ashamed. For us, we don’t judge. We really don’t. There’s a reason why this is happening. We’re very sensitive to that. A lot of times we’ve seen that individuals that have so called hoarders houses have had a loved one that was lost, and because of that, they react this way. So, there’s usually a reason. No one grows up and says I want to be a hoarder. It happens over time. Sometimes it is mental illness. Sometimes it’s other things, but we’re very, very sensitive to that. I see the people that are always apologetic about it. That’s not something that needs to occur with us. We will work through the situation, even with a hoarder’s house, just leave the stuff as it.
A lot of times there’s also some potential health problems that could occur as a result with a situation like that with mold and things like that. We take care of all of that. We have one situation right now where the woman’s a widower. She said, “Joe, I’ve got to get rid of this house. I put $50,000, gave it to a contractor. He did maybe a quarter of the work, didn’t file for permits, and he took the rest of the money.” She says, “I’ve got to get out of this. I have a special needs son and we just need to get out.” I came over there, I was walking around. I tried to get into the basement and then I realized there was two-and-a-half feet of water in the basement so I couldn’t walk around too much down there. As a result of that, the furnace wasn’t working, sump pumps weren’t working, the water heater wasn’t working. We talked it over and now we’re in the process of her moving out and now we have the task to fix it. No job is too small or too big for us when it comes to things like that, foreclosures, it really doesn’t matter. The more time we have obviously the better it is. Unfortunately, sometimes we have situations where it’s just too tight. There might be one day or two days. Sometimes we can work our magic, but sometimes we can’t get the information together quick enough.
Another thing that we do is we, as I said before, take individuals’ money from a 401K, IRA, or cash they have on hand and then we’ll purchase real estate with that and then they’ll get a monthly rate of return on that. Usually what we do is we, based on the loan, will keep the principal as is and we’ll just pay the interest and they’ll get a nice return every month. That works really well. We have a lot of clients that really like that model. One of the things that we’re going to go over on this show on future programs is pros and cons of all these different scenarios. One of the things that I also want to tell you is about cash buyers. I’m a very passionate individual. I’m Italian at heart. I’m very passionate and I’m very passionate when I see people getting hurt and misled. That’s one of our foundations; we’re very up front with everyone. If we can’t work with them, we can’t work with them and we’ll tell them, whatever the situation may be.
Sometimes, I’ve seen recently and I’d see it before this, there’s individuals that put out contracts to buy their house and there’s no clause in there for attorney review. So, we had one situation where someone had signed the agreement and they can’t get out of it. We’re looking into it and we’re seeing a few ways that we can get out of it. It’s going to be a little costly, but I haven’t seen that in the past and now I’m seeing that the past couple of times. That’s really jamming these individuals up in terms of what they can do and what they can’t do. This specific individual doesn’t have much money. He’s worried about his oil, not having enough oil in his tank to heat the house as well as electricity. We’re working closely with him and we’re going to see what we can do to get him out of this bad situation. Like I said, I haven’t seen it before and it blows my mind that someone with any type of conscience would do something like that. When we’re helping all these individuals out we look at it as this is their life and we can impact their life negatively or positively. That’s a big responsibility on our side, a very big responsibility. You’re dealing with someone’s life and the money for them to survive. I can sleep at night because I know I’m doing the right thing. I’ve said before, other individuals that sometimes do the things they shouldn’t do, unfortunately they sleep just as well. For us, it’s very important. Thank you very much.
Joseph J. Zoppi:
Welcome back. Again, this is Joseph J. Zoppi, managing partner at Templar Real Estate Enterprises. Our number is 973-240-8593. Our website is Templar Buys Houses for Cash. You can get us there any time. You can leave an email for us, any questions you have and either I’ll answer them on the air or I’ll send you an email in response. A couple of other things that we’re going to be going through in future broadcasts deal with different individuals that I work with; attorneys, title agencies, inspectors. I’ll be interviewing them. Hopefully you’ll get some information out of that to help you either sell a house, buy a house, or invest in real estate. Also, I’d like to cover some news that’s directly impacting real estate. The Federal Open Market Committee approved a quarter percent cut from 1.5% to 1.7% for the fed rate fund. Obviously this will impact mortgage rates. It’s a quarter of a point, it’s still going to impact it. Fed Chief Jerome Powell said during a press conference said that the job market remains strong, inflation remains subdued, the economy continues to grow at a moderate pace, although manufacturing has been slowing down.
One of the things that I’m seeing is and the concern I have as it’s approaching, these interest rates are going lower and lower. So, as a result of that, eventually if we do hit a recession we could eventually go into negative interest rates. Yes, negative interest rates. When you were in school I think if you put a negative interest rate on something you probably got minus five points for it, but those individuals that are wiser than me have been doing that in Europe. Right now, they have negative interest rates. So, when you’re putting money in the basically have to pay them to keep the money in the bank. The reason for this is that everybody will invest in the stock market. That’s how it’s done. When we had the downturn in 2009 this was one of the reasons why they kept decreasing the interest rate, to really push the money into stocks to try to push the economy and start the economy up. The unfortunate thing about this is that again, when you’re 55 and over-you want to be in conservative type assets and this just exasperates the situation that could really hurt people because they want a rate of return. They can’t put their money in the stock market. If they do, who knows where it’s going to go.
There was one situation where a gentleman we’re buying a house form, he said exactly that. He said yeah, my 401K is up $2,000 down thousands, it’s all over the place, but he has nowhere else to put it, which is very concerning. There’s probably no end in sight in terms of this approach, it’s been going on for a lot of years in Europe and even over here. Right now we’re topping out from the economy perspective. We still have maybe another few years where it could still be good, nobody knows, but where the stock market is, where interest rates are, it’s a precarious situation. There’s also another commission, which looked at broker’s rates for real estate. They had a survey and it said that out of 263 brokerages 99% that were surveyed do not publically list their commissions. We don’t list our commissions, but we tell you straight up. We usually do, almost always, 5%. That’s the way it is. In certain situations it is 6%, but that’s not too many situations. We’re very up front with that. This survey said that the rates were not stated on the phone, but once the individual came to the house, looked over the house, then the rates were stated. We don’t believe in that. I don’t like do that. We don’t do that. It’s that simple.
One of the things that’s very important to me is safety from an investment perspective. I’ll be going over with you different safe type assets in real estate so you understand what it is. You’ll understand how to overall evaluate if someone’s coming to you and says I have a deal here, you’re going to get a rate of return. I’m hoping that through this radio show you’ll be able to learn some of these things and invest wisely. The other thing is that a good attorney, sometimes good attorneys are hard to find as well as financial advisors. We’re here to help and give some advice, which will hopefully help everyone involved. If you have any questions you could always call us. If you don’t get anyone one of our staff members will take a message and we will get back to you. We expect to go over a lot of different things on this show; everything from the news going on for a given week in terms of interest rates and market trends, and where things are going.
Right now I belong to what’s called a mastermind. It’s a group of individuals throughout the country, 150 real estate investors, that get together on a quarterly basis and we talk about different trends; what’s happening in Las Vegas as opposed to New York and opposed to Jersey. We pull this information together to see where things are going. It’s very enlightening because when something will happen in San Francisco might eventually happen over here. There was a pull back for New York City of about 0.4% increase in housing sales in terms of their price over the last quarter. Las Vegas also had a flattening. Phoenix had a small increase. What we’re seeing is that the market is topping out right now and certain communities are seeing that. In Jersey, one is Maplewood. There’s a lot of houses for sale in Maplewood and also in Springfield.
I had a woman call me last week and said she’s interested in selling her house. I spoke to her about it. I said you have a lot of houses on the market right now. She said yeah, right now, you’re absolutely right. She says I have a six-month contract with a broker so I’ve got to finish that out, but I want to sell my house for cash, but I know there’s a lot of houses on the market. As a result of that we have to look at it and see where it is in another four or five months. I can’t buy everything. We don’t buy everything. There are certain areas where we’re concerned, where the market is. We might see a pullback of 5%. It’s not going to be like in the past, but still we have to be cognizant of what’s going on. I’d like to thank everyone. I hope you got some information out of here and you’re going to listen to us next week. Thank you very much. Again, for more information you can call us at 973-240-8593. That’s Templar Buys Houses for Cash. You can call us six days a week and usually even on Sundays we pick up, so we work long hours because these types of situations are not an 8 to 4 or 9 to 5 type thing. There’s situations going on and individuals can’t always talk, so we’re always available. Thank you very much, again. Bye.
The preceding program was paid for by Templar Real Estate. The views and opinions expressed are not necessarily those of the staff and management of WMTR. As always, it is advisable to consult a professional before making a major decision.
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