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 October 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, welcome to the Templar Real Estate Talk Show, my name is Joseph J. Zoppi, real estate investor, consumer advocate, author, and managing partner of Templar Real Estate Enterprises. You could reach us at templarcashforhouses.com, that’s T-E-M-P-L-A-Rcashforhouses.com, that’s one word, or you could call us at 973-240-8593. Again, that’s 973-240-8593, and we could answer any questions you may have. You could email us from our website. Also, if you want any questions discussed on this radio show, please submit them as well.
My company is a real estate investment firm, we buy houses for cash, we purchase apartment buildings, we do joint ventures with other real estate investors, we loan money for rehabs and provide transactional and gap funding. We work with individuals that want to invest with us in single-family houses up to apartment buildings. We do not speculate, we’re very protective of our money and our investors’ money. I’m not a real estate agent and we’re not brokerage, but I have individuals on staff that are agents that’ll sell your house through the traditional Multiple Listing Service.
This show will go over everything there is about real estate, those things that impact real estate. We will talk about our rehabs, some of our investments, what went well, what didn’t go as well and how we addressed those. We’ll talk about the economy and interest rates, we’ll discuss trends in the real estate market. Real estate is one of your biggest investments and it’s important you know as much as possible about it.
This show is based on my opinion and my experiences, so I ask everyone to do their due diligence. You could get a lot of information out in the Internet, so that’s a good thing, but as I always say, you gotta understand where the information is coming from and the slant associated with it for a particular article, so a person that writes an article might have a particular slant, you gotta take that into account and try to get the pros and cons on both sides. That’s very, very important because there’s just so much information out there and it’s just, you really don’t know what’s right or wrong, so it is a challenge at times.
Lastly, I was interviewed for Next Advisor, that’s nextadvisor.com, it’s a financial website and the article was why you need an appraisal contingency no matter how hot the market is, so I had spoken to the reporter about appraisals, the appraisal process, and certain things that you have to look at and take into account for an appraisal, and soup to nuts, I was interviewed for about 40 minutes and usually, they take just a couple snippets from it, and the other information I’ll provide or someone else will provide, they will craft it in a different way and put it into the article, but there will be certain quotes that they will say Joseph J. Zoppi stated this or whatever the case may be, so you’ll see that if you look at any of the articles that – [clears throat] excuse me – I was quoted in and that’s how they normally do it at US News & World Report, Fox News, so on and so forth.
So this week was busy as always, crazy as always which is what we like. We love being busy and we love working with individuals that want to either buy real estate, sell real estate, invest in real estate, whatever the case may be. We had an individual that was listening to the show and they called us up and they wanted to sell a 10-unit apartment building, so we did some of our due diligence with that. It was a nice property, we really liked it, but there was a number of challenges with it. They wanted a lot of money with it which is okay, we have no problem with that, but it was on three separate parcels. They were next to each other but there were three separate parcels and there were three separate buildings based on this parcel instead of like a complex which has one parcel and multiple buildings on it, so we started running the numbers and we’ll see where it goes but there’s a lot of challenges with that because everything is tripled, so there’s three appraisals, there’s three of everything, so when we are applying for loans, it triples everything and it just makes it a lot more difficult because of those costs associated with it, but we’ll see where it goes. I’ll keep you updated when we further progress with this, but we like the property a lot, it’s a nice property in Somerset, New Jersey, but there’s a number of things that we need to hopefully address and maybe reduce some of these prices because of just the way it is. It’s just a kludgy clunky transaction, but a lot of transactions are just sometimes that way but you try to work through it. If you have individuals, both sides, that are willing to work together, it just makes things a lot easier as opposed to someone just being a hardnose and drawing a line in the sand saying no, so we will see where this goes.
I had another house that we listed, I spoke about it last week a little bit, it was in Hackensack, so we listed it this week and it was just a pleasure working with them. The seller was realistic in terms of the price that they’ll get for the house; they knew it needed a lot of work and it wasn’t so much work where things were falling apart, for the most part, it was just extremely dated and had wood paneling and things like that. So, sometimes, I get these calls saying the wood paneling is beautiful and so on and so forth, I’m not saying that wood paneling isn’t nice but most people do not want 1970 wood paneling. I’m just telling you right now, so it just adds when someone’s looking at it, they’re going to, “Well, I really don’t feel like changing the paneling now,” and so on and so forth. A lot of times, with the wood paneling, there is nothing behind the wall except the studs, so if you pull off the wood paneling, then you have to put drywall, there’s usually not drywall behind the wood paneling a lot of times, so that adds a lot of cost to any type of rehab. We encounter that all the time, unfortunately. But the house is in Hackensack, like I said, it’s cute, two-bedroom, we have a study and we’re going to change that to a third bedroom and my crew’s in there right now adding the additional closet to make it a third bedroom, and that’s going to raise the value of the house considerably as a result of that. They are going to spend less than $1,000 putting in a closet, painting the bedroom, which is going to be the study at first, painting it to be a bedroom and for the $1,000-plus, it’s perfect, so it’s really going to help them.
The additional thing we did is we priced it higher than what we think we are going to get for it but we are putting some bonuses in there, and I’ve spoken about that last week, so the buyer’s agent will get a bonus of $2,000 if we get list price for it and another $1,000 if it’s put under contract in the first month, so again, we are trying to influence behavior, we are trying to influence the behavior of the agent on this one, so what we do normally is influence behavior of the buyer and the agent when we could, especially on our properties, so that’s the way we do it and it drives the price and it makes things very good for our clients as well as for us when we do this type of scenario.
The other thing I want to talk about is one of our houses we had put up for sale, so this rehab took a considerable amount of time for numerous reasons. First thing is we had so many other properties going on at one time that we pushed this one off a little bit to the other side and we want to make sure it was done right. That was the first reason. The second reason is that COVID hit and we were not doing anything for about a month and we were being a little conservative, and we want to make sure our crews were taken care of as well. Third thing was that we are waiting on inspections and the township was closed, so we couldn’t move any further, and also on top of that, the township, unfortunately, was not doing as many inspections for houses that were under an LLC or under a corporate name. If they were owned by a person, they would do the inspection, but because it was a company, they were foregoing that, so that kind of got me all crazy because again, I have investors that need to make money, I have my crew which needs to get work done so that they could pay their crew and their people, so it’s a trickle effect. So a lot of times, these townships make these decisions and it’s haphazard, and they don’t think about the ramifications and the business behind it, which I get very, very angry about. It’s very shortsighted and that’s why the government is not in my, I’m not fond of government and town government and state, and federal because of that. It’s very shortsighted a lot of times.
I spoke to someone that had a restaurant in one of the towns and they had a parking lot in the back and the town wouldn’t approve putting up a tent in for them to serve outside, which again, it’s just counterproductive, it hurts people, and again, I’m very clueless why they would do something like that. And there might be a valid reason, I’ll say that, but with that being said, still, there should be certain things to help these businesses along and it’s not always done. You see one town where they’re closing down streets, like Summit, they’ve just closed down a number of streets and had so many tents up, it was unbelievable, it was like a party going on with so many tables and everything, and you could see how they value the business, and then you look at other towns and they have nothing closed and they have to, where they locate the tents just impact really the restaurant. I had one in Verona where the tents were so far back in the parking lot, that was like, how does the business, really, with the waiters and waitresses going back-and-forth, it was horrendous, it really was, and it really impacts these businesses.
So, I’ll get off my soapbox about government and the bureaucracy, and the shortsightedness of that. So I’d like to discuss a little bit more about this house but before I do that, I’m going to have to take a commercial break and I’ll be right back. Thanks a lot.
Joseph J. Zoppi:
Hello, welcome back to the Templar Real Estate Investment Show. My name is Joseph J. Zoppi, managing partner of Templar Real Estate Enterprises. You could reach us at 973-240-8593. Again, that’s 973-240-8593, or templarcashforhouses.com, that’s T-E-M-P-L-A-Rcashforhouses.com, that’s one word. Again, we buy houses for cash, we also sell houses through the Multiple Listing Service. We will joint venture with you if you want to invest in apartment buildings passively and if you’ve bought a rehab and you need someone to do a joint venture with, please give us a call as well.
So I’d like to pick up where I stopped before in terms of a house that we had purchased and we’re doing the rehab for it. It’s located in the Longbranch area and it was a nice house, it needed a lot of work, a lot of work, and we were overbudget considerably on it, and things just kept cropping up that just weren’t foreseen. So a lot of times, that happens and we’re not going to cut corners and not provide a good product, and everybody that buys our house, our houses always complement us on the quality of work and that’s very, very important to us, but this house is, like I said, was a cape. They had a sunroom on the side, it was approximately 1,700 ft.², it had four bedrooms and three baths. What we did is one of the baths was kind of located in the sunroom area, so we closed off part of the sunroom and made the bedroom like a master bedroom, and then we built out some additional closets, so it’s a really nice, nice area for a master bedroom. And what we also did is we finished off the basement. The one challenge with the basement was that the ceilings were low on this house for the basement, and you like a lot higher ceilings in the basement, just everywhere, and it detracted from the house a little bit and we were always concerned about the height of the ceilings, definitely, we finished it off and being there and it was fine, just that they were a little low, and on the second floor which just had two bedrooms also, the ceilings were a little lower than we wanted, probably about 7 ½ feet, 7 feet, probably maybe a little bit longer or higher than 7 ½ feet, somewhere around there, about 7 ½ feet. So again, it was fine because upstairs was for the kids, usually, the two bedrooms, so it was fine but it still detracted from the house a little bit. There are certain things that are in an older house that you just gotta live with, even doing a rehab, unless you’re going to put excessive money raising roofs and rooflines, and things like that, so certain things, you just have to accept, and a number of people will. Some won’t and some will say, “I don’t like it like this and I’m not going to buy it,” but the house was really well done, we had quartz countertops, it was on a dead end street which is good but on the flipside, it was next to Fort Monmouth and there was a field there, and the field was overgrown, it wasn’t used anymore, but it was a little bit of an eyesore and that was a concern of ours. We planted some privacy trees to line the driveway so you wouldn’t see the fence and you wouldn’t see the field next door, and then we closed out the backyard with a privacy fence as well, so it really helped a lot, but it’s still there and it was again, a concern of ours but it was a nice piece of property. The backyard was huge and it was a nice area, secluded, so it had a lot of pluses to it. We had put hardwood floors down and spent a considerable amount of money on that. We had to use the architect to close off certain walls and take down certain walls, we had that all laid out and obviously, all the permits associated with it which just added a lot of challenges in terms of that. We had a plumber-inspector come in from the township and we passed the final for the plumbing, but one of the things is that he wanted to know if the stove had the anti-tip installed, so normally, you put this, it’s like a bracket to ensure that for little kids, if the oven is opened up and they stand on it, it doesn’t tip and fall on them, and it’s a safety feature, it’s just a bracket that’s installed in the back. Anyone can install it and it’s usually required for most towns. So we did it and we had no issue with it but the inspector which is a plumbing inspector is looking at something like that, that’s usually a building. So again, my issue is that they’re always looking for an issue and that’s the problem I have with a lot of these inspectors and they are always, “Well, I don’t want to get in trouble,” and so on and so forth which is really not the case, but that’s their party line with that, but we had a lot of challenges with that house between finishing the basement, we used vinyl, it’s called vinyl plank flooring which is waterproof which works out really well. It’s very reasonably priced, you can pick it up at Home Depot or whatever, or how they recommend it for basement works out really well. You could even use it on your main floors which we do sometimes, but it looks nice, comes in a lot of different colors, it’s easy to install, so we installed that and I think it worked out really well. One of the things we did with the shower in the bedroom for the main bedroom is we purchased a massage unit and this thing looks like, it’s like $1,000 and I spoke to someone like, “How much do you think it costs?” He said, “Oh,” one of my contractors said like, “$1000.” I said, “No, we picked it up for less than $300,” so sometimes, you could buy these things and they look very expensive but they’re not, and we picked that up at Wayfair, so if you go to Wayfair.com, it has a lot of nice things for the house and you could get it at a very reasonable price, so I highly recommend it. We purchase a lot of things through Wayfair, from furniture for staging to other add-ons for the house. I highly, highly recommend it.
The other thing that we did is the sunroom, so the sunroom had a lot of challenges and we fixed everything up but you have a sunroom that has all these windows and the next-door neighbor had a boat parked in their side yard, so I was looking at this and we are in the house and it’s all rehabbed, it looks beautiful and I’m looking through the sunroom windows and I’m just seeing this boat, ans it’s an older boat too, but it’s just a boat and it’s on the side yard and it’s within 10 feet of the house, and it just looked ugly, and it was like, we have to do something with this. Normally, when we stage a house, we cannot put up any curtains. We want a lot of natural light to come in and it stages well without it. We take down the screens also because a lot of times, the screens just impact the view looking out, so we take down the screens, we clean the windows really nice but I’m looking at this boat and I’m just saying, this is bad, and we were probably eight hours or it was a day before our first individual is coming in to take a look at the house and thinking about it all night, and it’s kind of short notice and I said, “Okay, let’s go to Home Depot and get some blinds for it,” so I got the fake wood, the faux wood blinds and I’ll tell you, we had to purchase eight of them and I have my contractor which is working on a lot of other things to button up before we had the house, people coming over to see the house and I said, “Change of plans,” which always happens with us, and I said, “You gotta put up these blinds,” and we put up the blinds and it just was a world of difference, and when I had the first individuals walk through the door, they looked at the blinds and the first thing they said is, “Do they come with the house?” And I said, “Yes, definitely, definitely do,” and it just changed the room, I changed everything about the room and it really, really highlighted the entire house. It just made it really just beautiful because I was just looking at them and saying, “We spent all this money and it just did not look good. You had all these windows, they were open and we needed something to just put on those windows and it really, really just changed the entire environment.” It was just really great, and that’s the thing that when you were selling a house, you gotta look at these things. And one of the things that occurs a lot of times when you own your own house, after a while, you get used to certain things. When you first moved in, you might not have liked it, but after a while, you get used to them and you forget about it, and then when you have someone new come into the house, especially when they want to buy it, they look at these things and say, “I don’t like that, I don’t like that,” so you gotta really have an open mind of what your house is and what your house is not, and that’s one of the things that when we sell your house through the traditional Multiple Listing Service, we look at those things and will say, “Let’s make these changes, you’re going to get a lot more money for it as a result of that.” We are always looking to be conscious of spending any money that you may have, but in the end, you might reap $10,000, $20,000 more over a $500 change, and that’s something that you gotta look at and you have to be open to to maximize how much you’re going to get. Even in this hot market, it is the case.
The other thing is we hear about the hot market, the hot market. The market is hot but again, not every house is just flying off the shelf, remember that. So you have to be understanding about the house and you gotta again, list it at the correct price. That’s extremely, extremely important. If you don’t do that, it’s not going to sell. One of the things that I was really happy with is that we have it under contract on the same day that we have the first individuals come through and it’s a really, really nice family. It’s a single mom with four kids and we’re really pleased that they put it under contract. It really seems like a really nice family and I think they’re going to really enjoy the house.
Well, I’m closing on this, I’d like to talk about this, I’ll probably do that next week, so I’d like to close out and say thank you very much. Again, you could reach us at 973-240-8593 or templarcashforhouses.com, okay? Thank you very much, God bless, take care, and 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 W! . As always, it is advisable to consult a professional before making a major decision.
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