Templar Real Estate Radio Show Transcript 10-24-2020

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 24, 2020


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, a 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 973-315-7990. Again, that’s 973-240-8593 and we could answer any questions you may have or you could email us from our website. 

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. Those individuals consist of teachers, attorneys, doctors, police officers. It runs the gamut in terms of individuals that invest with us, so it doesn’t matter what position you have or what type of job you have. I am not a real estate agent and I’m not a brokerage, but  I have individuals on staff that are agents that could sell your house through the traditional Multiple Listing Service.

This show will go through everything that is about real estate, those things that impact real estate. We’ll talk about our rehabs and some of our investments, what went well, what did not go well, especially how we adjusted accordingly and fixed it. 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, so it’s important that you know as much as possible about it. 

This show is based on my opinion and my experiences. I always tell everyone to do lots of research, whether it’s for real estate, any type of investment, or anything else that you’re doing, knowledge, they say, is power and it is as long as you execute with that knowledge, and I always say, there’s a lot of conflicting information out there, so please be wary of that, please understand it. It’s sometimes difficult, like I said, I sometimes bring up the example of I want to purchase something on Amazon and you have a lot of positive reviews, but then you start seeing some other negative reviews and you’re not sure which way to go, so it’s difficult, there’s so much information out there right now that it’s very difficult sometimes to make an educated decision, so we go through the same thing, so it’s nothing that one person has over another. We all have these challenges. 

So I’d like to have a shout out to some of my favorite listeners. John T., Cindy G., and Paulette. I’ll also recommend you look at money.com, money.com is a really rock-solid website, it’s for personal finance, it’s got some very, very good articles on there and I highly recommend you look at that. It’s an excellent resource for you. 

We’ve been having private discussions, as we always do, everything is very discretional in terms of what we do and very discreet, and we want to make sure that anybody we speak to, they know that it’s a private discussion, and that’s important. We have calls constantly on challenges people have and we want to make sure that these are private discussions. We don’t discuss it outside of the office and sometimes, we don’t even discuss it inside the office with one another, so that’s very, very important to us in terms of the privacy of individuals and the challenges they go through. So that’s very, very important to us.

Again, if you’re interested in selling your house for cash and you give us a call and say, “Please buy my house for cash,” we will be more than happy to look into it, we will come to your house, and then we could give you an offer. That offer sometimes is right on the spot, sometimes we’ll have to do some additional research, it depends on a number of factors.

Also, if you want to list through the traditional Multiple Listing Service, please give us a call, I have a great team of individuals that are rocksolid and we work very, very hard for our client, and we look at things a lot differently. It’s not only just listing the house. That’s part of it, but it’s really after that listing and if you have an offer, it’s like, how do you handle that? And a number of agents that we’ve encountered do not handle it the way it should be handled. It’s very black-and-white and very procedural, and that’s not the case. There’s a lot of factors that you have to look into and hopefully, if I have enough time, today, I’ll talk about some of those again, but it’s very, very important that you understand and the agent understands the dynamics in how to close the deal, and deals are closed all the time but the issue is how much pain someone might have to go through or not go through, and that’s very important, and also to maximize how much you’re receiving, and that’s what the name of the game is.

So I’d like to go over a house that we are selling, I have ported at Forbes and Hackensack, and the woman called us up and she said, “We want to sell the house,” for her mother-in-law and as I said, it was in Hackensack, it was a two-bedroom and it had an extra room, so what we did is we brought our crew in, built out a closet, and as a result of that, we changed it from a two-bedroom, one-bath to a three-bedroom, one-bath. Again, that’s going to increase the market value of it. It costs approximately $1,300 to build out that closet, approximately $400 was just material, $450, and the rest was just labor, so relatively speaking, that’s really not a lot of money. Again, we talk about this and I’ve said it before, that material costs are right now very, very high, and they just keep going up, unfortunately, so to build out a simple closet is about $450, just the materials, that was all the wood, drywall, and it wasn’t a big closet either, but by the time you add everything, it just adds up, and that’s the unfortunate thing about right now, is not just labor costs are high but material costs are high. So we built that out, we had multiple offers on it within the first week, we priced it correctly, and one of the biggest things that I have to applaud for the individuals that wanted to sell the house is they were realistic. They said, “Joe, this needs work and we just want to sell it,” and after looking at it, we priced it, I think it was accurate. It was very accurate in terms of where we priced the house, and some individuals or some agents might’ve come in and said, “No, you can get more for it,” so on and so forth, no, what we did is we priced it, I think it was maybe $335,000, somewhere around there, $340,000, I think it was $340,000, and we had multiple offers. One came in at $10,000 over and another one came in at $15,000 over. The one for $10,000 over was going to put 20% down, it was going to be a conventional mortgage. The other one was FHA and they were going to put 3.5% down, so we instructed our client to take the one that was $5,000 less or $10,000 above asking, and the reason for that is that the amount of money they were putting down was conventional and that’s very, very important. So when we went back to the other agent, they said they had raised it another $5,000, and we told them it didn’t matter, the money; it was the ability to close, and we asked them, instead of increasing it by another $5,000, can they put more money down? They said no, they don’t have it. And that’s the key point, they don’t have the money, so they put a nominal amount down. 

So when we are concerned about that is that what happens is the appraisal doesn’t come out correctly or come out in terms of the number that they put in, and nobody talks about that. Everybody talks about oh, we have multiple offers and it bid it up, and so on and so forth, that doesn’t mean anything in the end. I mean, the end means what can you truly sell it for? And the appraisal really dictates that to some extent. Obviously, the individuals that are going to buy it, they want to maybe put more money down to get that house but it varies a little bit but not by $10,000, $15,000, $20,000 sometimes, especially on a house that’s $340,000. So when you hear all the stories about all these multiple bidding offers, so on and so forth, that’s not the thing. It’s at the end, what does the house sell for in the end? And that’s the biggest thing, and people don’t talk about that at all, but that’s the reality. So the ability to close the deal is the most important thing, and that’s very, very important for anybody that wants to sell.

So as a result, they accepted the offer of $10,000 over asking, we told them that we wanted the appraisal and the inspection done at the same time or at least ordered at the same time the appraisal went in. It was pretty quick, they came in and it was followed by the inspection, and as a result, what came back is that, like I said, the offer was, I think $350,000 and the appraisal came back to $340,000, exactly where we said it was supposed to be in terms of pricing the house, so right now, we are in negotiation with that and I’m not going to discuss that any further in terms of what’s going to come out of it, we are just about done with negotiation on it and I’ll update you next week on it, but again, it’s the appraisal that really dictates a lot of it, and that’s very, very important, so when you hear all the stories and you read all these articles, again, it doesn’t mean anything. It’s really what you can sell it for at in the end, and unless you have a full cash offer or very close to it, you’re going to have to make some adjustments accordingly. 

The other thing is that the buyer will then say, “Well, it’s only, appraised at $340,000, I’m not going to pay more than that,” or they might, if they’re very anxious and they really want it, they might come up a little bit, but then, they’re going to leverage the other way, and what are you going to say, you’re going to say no because it’s appraised at that, it’s probably going to always appraise at that or pretty close to it. Now, if you have an FHA, then you’re not going to be able to get another appraisal done that’s going to change it really for, I forget how many months, maybe six months or something like that, but especially for an FHA, once you’re locked in at that appraisal number, you are locked in if you’re going to go through FHA. So, that’s very, very important.

So I’m winding down for this segment, I’m going to continue with this shortly. Again, if you need to get in touch with us, you could call us at 973-240-8593 or templarcashforhouses.com. Thank you very much. 

Joseph J. Zoppi:

Hello, welcome back to the Templar Real Estate Talk Show. My name is Joseph J. Zoppi, managing partner of Templar Real Estate Enterprises. You could reach us at 973-240-8593 or templarcashforhouses.com.

Before I get back to where I left off with the house that we are selling for this individual and her mom, her mother-in-law, I wanted to also tell you that I was just accepted into the Forbes Real Estate Council, so it’s invitation-only and I was really happy with the nomination, so someone nominated me and it’s based on my work in the industry, and again, I’m very thankful for the recognition, so we will be sending out a press release on that, so it’s important to me and Templar that we are recognized for the work that we do. We’re here for all the work we put in and help our clients, that’s really, really who we are, and the transaction I’m talking about for the house in Hackensack is exactly that, and after we went under contract with this house and we got a favorable offer which we liked and it was quick, and that’s partially based on really the market, where it’s at right now, and that, you can’t change. One of the important things though is pricing it correctly because you’re not going to get offers if you don’t. We have one such property like that where we told the individual what the price should be and then someone else said, “No, you are $50,000 under.” Really, I think it was like, about $50,000 under. Now, you have to put it up another $50,000because you’re going to get it because the market is hot. I said, okay, and it’s been on the market for, I don’t know, six months, and there was one offer put in and the offer was put in where we were originally going to price the house, so when a so-called expert or someone that’s in the industry recommends just be wary of it. Again, you need to price the house correctly, even in this market and if you don’t, you’re not going to get what you need for it. It’s going to sit on the market and sit and sit, and sit, and that you’re going to start making changes and people aren’t going to see that, and again, in the end, you might show up a lot of time and get not get the price you need or get the price where it originally should’ve been, so please be cognizant of that.

But the Hackensack house, the woman that was selling the house for her mother-in-law said, called me up and my agent and said, “My mom really wants to meet you, she’s been really happy with everything that you guys are doing,” and let me backtrack a minute. The other thing that needed to be done with the house is there’s a lot of stuff that’s in there that we tried to get rid of, and the house was very neat and clean, that’s a big thing, and that’s another reason why it sold quickly, and as a result of that, there was a lot of old furniture and everything was neat but they didn’t even furniture anymore and unfortunately, some of these nonprofit organizations aren’t picking up furniture anymore or are very limited.

So there’s a lot of old stuff that was just in boxes and they needed to get rid of it, so we are arranged to have one of our companies that’s a dumpster company that has great prices, we said, “Okay, we got it delivered there,” and they started cleaning up the house. The mother was very happy with the price and what she was getting for the house, and how streamlined the process was, and how quickly we got it on the market, and she wanted to meet us, and she said, “No, Joe, I want your team to come by.” So we tried to figure a day out, it was just this past Sunday, so we have my agent there and I had my son, because I pick up my son on Sunday, and we shot out to church real quick and then from there, we picked up bagels and all the different spreads as they were cleaning out the house, and we went over there, of course, there is an Italian family, so of course, I had to bring my homemade wine and we went there and it was just, again, it was just great because it was just based on relationship and that’s what we are, is a relationship company. So we sat down and we were just eating, and we were just trading stories. I was talking to the woman’s mother-in-law and she’s 89, and she’s just really with it, and it doesn’t look like old age has really slowed her down at all. We were talking about the old days and she was telling us about, because she’s Italian and a lot of Italian celebrate the feast of St. Joseph and there’s usually certain things sold or prepared for on that day for families, and my family did the same thing and we were trading different recipes in terms of how we made things. They were from Sicily, so the recipes were a little different from ours which we are from Naples, outside Naples, so it was just really just a great time and she says, “I’m going to be making stuff this year, I want you to come.” That wasn’t just like a hollow offer, that was definitely the case because the woman that’s originally engaged with us, she said, “Guys, once this closes, we’re going to have dinner and everything else,” and it was just a very homey experience and we were trading all the stories from the past. It was just a great, great experience and my son said to me afterwards, he goes, “Dad, I love this,” and he’s just in high school now. He says, “I love the warmth of Italians and how they are so accepting of us,” and we were basically strangers for the most part, we’ve been working with them for a couple of weeks now, maybe a month, and it’s basically like we are family and that’s how my family is, and we would come a long time ago when my grandmother was around, people would come over and they would be like, already family, and it was like we always knew them, and everything was around the kitchen table and talking and sharing stories, and that’s what we were doing this past Sunday and it was just a great experience, and we’re there, and then an additional family was coming in and we were talking and it was just like, we belong right there, it was really a great experience and it made my week just that, and my staff that was there also, they were just like, “This is great and we love this,” and that’s, I think, what really separates us from other companies and other groups, and it just, that’s how we work, and it’s always great when you have that connection. Unfortunately, we don’t always have that connection, I have to be honest with you, but I think it’s how you go into a transaction also with openness and flexibility, and when you do that, I think the dialogue opens up, the connections open up as opposed to these hard-line approaches and no, we have to get this, and it’s just a different connection. We do have a lot of these connections with individuals but sometimes, they are very procedural and just business like and that’s fine, we didn’t have problems with that but really, what separates us is relationships and those connections.

So as I was saying before, when you receive an offer, you have to really or the agent needs to really understand that offer really well and what the drawbacks are. I had an individual that contacted us a couple weeks ago and she accepted an offer and it was FHA, so every time you hear FHA, it’s usually low down payment, and FHA inspections are horrendous, and a lot of times, you have to fix a lot of those things on the inspection report, whereas other inspection reports, you can negotiate it. This individual fixed everything on the inspection report which was about $6,000 worth of work. It tied up the house because it was under contract for three months, as a result of that, the buyers came back and said they wanted a mold test which is like, why do you want a mold test? And that’s what they wanted. The mold test came out fine but they still said there was still slight mold and it was like, I forget what it, it wasn’t really anything bad and they wanted additional remediation as a result of that. She finally pushed back and said, I looked into it, then they just decided to cancel the contract. As a result of that, she was off the market for three months and she spent $6,000, and that’s a problem, and now, she’s frantic because she needs to sell the house quickly and she needs a really high price for it because of some, I don’t know, if legal issues or whatever the case may be but now, she’s running frantic because of this, and that’s the thing. Sometimes, you get an offer, just because you get an offer, be very wary of that offer, even if you’re anxious about it because now, she chewed up three months of time. Individuals, again, they’re going to go on Zillow and they’re going to see that it was off market or pending for three months, then they’re going to think there’s a problem with the inspection report or something. That’s the first thing they’re going to do, and you could talk otherwise and say no, it’s not this, but if they see something, they might make a supposed decision based on what they see instead of asking the question, and that is always a problem, and that’s why sometimes, we come into houses and we’re going to say, “Well, this is going to be an issue and this is going to be an issue,” and a homeowner will say, “Well, no, it’s because of this,” and the issue, that might be the case but they might look at pictures and then already make a decision, “I’m not looking at this house because of this,” and that’s really the issue. 

We have one house where there was a stream in the back and one of my agents said, “That’s going to be a challenge,” and he said, “But it’s never overflowed,” a couple other things, “It’s not in a flood zone,” so on and so forth. That might be the case but when individuals look at it on Zillow and they sometimes look at the aerial view of it, they’re going to see a river or a little creek going through the back. The first thing they’re going to say is a couple things: What happens when it rains and it’s going to overflow? Or I have a small kid and I’m afraid they’re going to go into the creek and drown if I don’t keep an eye on them. So, you got to factor all those things in. You just have to be cognizant of it and that’s where we will come in and we’ll make those recommendations in terms of where to price it, how to price it, how to put things together, to package it in the best scenario, whether it’s just we are selling through the multiple listing service or cash offer. Either way, it’s going to be in your benefit and we are looking out for you as a client.

So I’m going to be closing up in a minute because I’m getting to the end of the broadcast but I just want to thank everyone as always, if you’re interested in passive investing in real estate, so you get consistent returns, please give us a call. Again, it doesn’t really matter, if you think you don’t have money, if you have an IRA or a 401(k), depending on the 401(k), but definitely on the IRA, you’ll be able to invest on real estate, so you could talk to us about that. So again, I’d like to thank everyone for listening and have a nice weekend and God bless. Thank you. remember 

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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