Templar Real Estate Radio Show Transcript 3-28-2020

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 March 28, 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 can reach us at templarcashforhouses.com or call us at 973-240-8593 and we could answer any questions you may have, or you could email us through our website. 

My company is a real estate investment firm and 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 as well. We work with individuals that want to invest with us in single-family up to apartment building. We do not speculate and we’re very protective of our money and our investors’ money. I am not a real estate agent. There’s another individual with my same name, but he is a real estate agent. That’s why I usually go with my middle initial, just to designate the difference. I have individuals on staff that are agents that will sell your house through the traditional Multiple Listing Service, but we’re not a brokerage.

This show will go over everything there is about real estate, those things that impact real estate. We’ll talk about our rehabs, some of our investments, what went well, what did not go as well, especially how we learned from it. We’ll talk about the economy, interest rates, we’ll discuss trends in the real estate market as well as the stock market which always impacts, obviously, real estate. Real estate is your biggest investment or one of the biggest investments anyone has and it’s important you know as much as possible about it.

I’ll provide my opinion, it’s only an opinion. I ask everybody to do research, everything that they look at, whether they’re dealing with an attorney, a CPA, or any other business transaction, you always look at it and double and triple check it. It’s very important that you really research it because if you see something on the Internet, you might see a topic and it’s slanted really towards what the author believes or wants you to believe instead of really what the true reality is, so it’s very important that you do a lot of research, especially nowadays.

One of the things that I’ve been receiving from people is a lot of calls, and what we’ve been doing is they’re all free consultations, and there’s three areas which we are really focused on. One of them is really to talk about anyone that’s worried about their home and the potential of losing their home, so we will talk to individuals on that in terms of different things that possibly could be done to save the home. We are not going to get any business out of it but that’s not why we’re here. We really want to help people. Especially in this time, it’s pretty scary out there. I know a lot of people are worried about what the future lies. Nobody’s going to expect this, so if you have any questions on that or just, you want a sounding board, just give us a call, I really encourage that, and again, we don’t sell anything based on that. We just want to really help. 

The other thing is obviously, if you’re interested in selling your house fast and you need money quick, you could give us a call, or if you are interested in investing with us. So those three options, or if there’s something else that you have on your mind you want to talk about, please give us a call. 

Two weeks ago, I had an interview with a, it’s called TheMortgageReports.com, so I was interviewed there and there was an article, it said, how to pause mortgage payments if you’re laid off due to COVID-19, so we talked about mortgage forbearance and I had talked a little bit about mortgage forbearance, what it is and the different steps involved, so if you pull up that article from TheMortgageReports.com, you’ll see me quoted in there numerous times. 

First, I would like to say I’m really happy with, in my opinion, what the government is doing over all. Not everything is perfect, you have the state government, you have townships, you have the federal government, and relatively speaking, I think based on what’s going on, they’re working really well together. I’m really happy with both Governor Cuomo which is in New York and Murphy, and I was talking to my ex-wife the other day and I said I was very impressed by their work and she said, “Oh, that must’ve been very hard.” Now, I’m not a big fan of either one of them but they are doing a good job and it really isn’t hard for me to say that. I am very balanced with what I look at and they’re doing a really good job, I was very impressed by their work and how quickly they are acting. Governor Cuomo obviously has some issues with some of the bailouts and I can understand why based on the impact to New York, but I think on the state level, it’s working great, I think the President is doing a great job, no matter what some of the media is saying. A classic example is he was touting one of the malaria drugs and saying there’s great promise in it, so I was looking into this, I was researching a little bit and they had a gentleman who took some medicine that he died from and they keep stating that it was the same medicine that the President was touting and it wasn’t, and I had also talked with a doctor friend of mine and he said the same thing. He says what they are saying isn’t true and I’ve read numerous articles on it that said that was what the president was touting and that was not the case, so that’s another example of really doing your homework in terms of when you read something out there or you hear something on the radio, whether it’s really true or not because they spin it and they do a lot of different things, so you really gotta watch it. Unfortunately, it is true fake news.

So where is the real estate market going? That is the question, and nobody knows, we don’t know, we are keeping a close pulse on it but everything is at a standstill right now. In terms of sales of properties, right now, nobody could – we can’t do an open house. Now, we can do virtual open houses and what virtual open houses is, is basically where you take either still photographs and put them together as a video or you do a video walk-through and your agent or possibly you could take that, walking through the house and they will see all the rooms, so it’s a virtual tour, basically. With people on Zillow, you can’t do an open house, they will restrict you. In terms of the MLS, the Multiple Listing Service, you could put out there that you are on a virtual tour but I think they are restricting it as well or they might be saying okay but it’s very loosey-goosey there, but overall, in terms of what the governor is saying, you’re not supposed to do anything in terms of doing any, go to any houses now. Certain agents might go to vacant houses but not houses that currently have someone living in it, so I have heard that and I’ve seen that a few times with agents still continuing to bring individuals to houses but they are really vacant houses, so it really restricts the potential for the passing of the virus.

So again, I have no outlook in terms of where it’s going with the mortgages. Obviously, the mortgages, the interest rate is coming down. One of the things that, they talk about the interest rates going down but you have to also understand that that doesn’t mean they are underwriting requirements, don’t go up, so you read about all these things, about all these loans, all these things going on but you gotta temper that and realize that the banks are going to look at your situation and they might put higher restrictions or underwriting requirements, and so it might not be as easy. I don’t know, so that’s still open. I had an investor friend of ours out of Oklahoma and they were applying for a rehab loan. Rehab loans are more expensive than a regular loan that someone would take out for their mortgage for their house. The reason is that they are not living there and the second reason is that it’s more risky, and that’s the way mortgage companies or banks underwrite them, that it could be more risky, no matter how successful a real estate investor is. Now, we are very lucky we have lots of cash on hand, we have good relationships with our banks for our lines of credit that we do have, but I’m not sure if they will go up a little bit as well, but you really don’t know what’s going to happen in the next three months, four months when you are purchasing the house. The interest rate might be lower but the requirements might be higher. 

We had a house that we put under contract last Sunday and it was a really nice couple, they were just getting married and they were very happy with it, they love the house and we were excited for them, and then we get a call two days later that it’s not going through. We said, “What’s wrong?” The agent called us and the seller, the woman who was our buyer was in tears. She had worked for a hotel, so she was either furloughed or lost her job, she wasn’t sure. They were living with her parents, they were going to get married at the end of the year. So they got hit three times: they lost the house, so basically, they are not buying it, she lost her job, and she’s worried about her wedding, so certain things she doesn’t know yet what’s going to happen in a couple of weeks, so she might be just furloughed, she wasn’t sure, but poor woman or the couple were just in tears for what happened, so you really never know.

So I want to take a break right now and I will be right back. Thank you very much.

Joseph J. Zoppi:

Hello, welcome back to the Templar Real Estate Investment Show. My name is Joseph J. Zoppi, I’m a managing partner of Templar Real Estate Enterprises.

As I was saying before and we had lost a deal in terms of selling one of our houses and the impact to uncertainty, and as a result, our buyer lost her job or at least furloughed for the time being, and that’s one of the things that we are going to be experiencing, everyone, in terms of that, if they are selling their house and even purchasing it, possibly. So the future right now for the next X number of months is going to be definitely uncertain. When things pick up, there are still going to be uncertainty associated with it, so we just have to take one day at a time and it’s just how we have to approach it.

Now, I had another house that we were representing the seller and I had an agent on that and I had spoken a few weeks ago about it. I don’t even know if I said the town, the deal had been consummated, the house had been sold but it was in West Orange. So originally, with the house went up for sale, we had a couple of reductions in price because it was priced a little high and that was the way the seller wanted it, so we finally found someone that was interested in the house and then we applied for a CO, so we did the work for them in terms of applying for the CO, those are some of the services you provide to our sellers, and it was about $100, I think it was $100, and then the inspection report came back from the buyer’s inspector and they wanted a number of changes, and the seller said, “No, we are not doing it,” and we said, “We strongly recommend you do some of these things,” so she did a few things but she said she really wasn’t going to make too many changes, so in the end, the buyer walked away and said, “We’re not going forward.” After that, the seller made all those changes that were originally requested but the deal was lost. With that being said, the CO never occurred, the CO, the Certificate of Occupancy, it’s always required by all townships no matter what, so one was never performed and we talked to the inspector, the inspector said, because we want our money back, the inspector said, “It’s a big problem, it has to go through the town council, it has to be approved and all that, so it’s going to take a long time, why don’t you just hold, we will just hold it on account and next time you have a buyer, we will use it then?” So we said okay. 

Fast forward five months, the seller finally receives another offer and we are looking forward to go forward with it, so we had someone go down to the township and say we are going to have another CO, and everything else went through because the inspection went through by the buyer, so we were very confident. So we had a staff member go down to the township and ask for a CO and they said, “You have to pay for it again,” and then I went down there to talk to them and they said the same thing, they said, “Well, you don’t get your money back, that’s just the way it is,” so I was very perturbed by it but I needed to move this forward, so we paid for it and we told the seller, so she was going to reimburse us and that’s just, we usually do it just to help this along, help the process along, instead of them going down filling out the paperwork. So I wasn’t in a particularly good mood about that because it wasn’t clearly stated and the inspector for the township stated that we’d be able to get the money back. So I started escalating it and because I was not going to give up. It isn’t right, if someone went to Apple and gave money, $100 for something and they never received any service for it, you would expect the money back, and with these townships, they just feel very independent, it doesn’t really matter, and that’s just the way it is and you gotta live with it, and I’m not like that, and so I’m a fighter, I’m not going to get up.

So we went through the process to see it was passed, and as I have stated in another broadcast, you always gotta get a CO, no matter if someone buys a house from you like an investor and says, “You don’t need a CO,” you always need a CO, period. So this was about a week and a half ago and townships are starting to close, we were very concerned about it but we were able to get the inspector out there, passed by, so after that, we were waiting on the final certificate and we needed that for the bank. As that was progressing, the banks were being a little more flexible in terms of the documentation they received because things were closing, the ability to sign documents in person, things like that. We called West Orange and they really weren’t helpful. I followed up with a call and I was asking them as well, and they were very vague about it. Not vague because of everything going on, just that that’s their process and they won’t come into anything. 

So the agent or the seller was getting a lot of pressure from the buyer’s attorney, the buyer’s agent, so on and so forth, to try to push this along. We kept calling, calling, calling. At one point, we were trying to do it without the formal piece of paper even though it has been passed, the CO was passed, we know it was passed but we just did not get the paper, and the agent spoke to the inspector and said, “Well, what can we do this?” It’s been passed but it just hasn’t been stamped, basically, and the inspector said, “If you do do that, I’m going to make sure that both attorneys are fined, I’m going to make sure that the seller is fined, and I’ll make sure the buyer is fined,” so we backed off and we told everyone, but this is a classic example of the townships just being very black and white. They knew it was passed, they just didn’t go through the formal process of getting one of the signatures, so we backed off. We finally went through, we still paid an extra $100, or really, the seller paid an extra $100 for their CO, but we put it through a credit card so now, we are going to find it through Visa and protest it in terms of a dispute. We are not going to give up on this, we could very easily say, “Well, the seller basically incurred an extra $100,” that’s just the way it is, but that’s just not us and the right thing to do is we should only charge once. We never received the CO, nobody went out there, so we are going to find it and we are going to protest it, and these townships just feel like they have [inaudible] with everything and it’s just like, tough luck, so we are not like that and we are going to continue to push forward on it. That’s just the way it is.

Next thing that I’d like to talk about is the markets and the recovery, so as everybody knows by now, I’m not a big fan of the stock market. I view the stock market, maybe it’s a little extreme, but it’s like an abusive spouse. It pounds you and abuses you, the market rebounds, you go along for the ride, you go, oh, this is great, it’s different this time, and then it turns around and pounds you again. Now, I had that done twice to me. First thing in 2000, 2001 and second, around 2008, and I said, I don’t need this abusing spouse no more. So that’s just the way I view the market. It goes up, it pounds you, it goes down and then you’re going to have X amount of years before you recover that money.

They’re talking about commenters and a couple things, so let me backtrack, so if you stay in the market, I suggest a couple things, this is from a trader, so that’s me, I used to trade a lot, is that you should put certain points in terms of your holdings and put alerts associated with them, so at this point, if you want to ride it out, it’s fine, but as the market goes up, eventually, you start putting these alerts in different software, if you have TD Ameritrade or whatever the case may be, you could set certain alerts, and if the price falls below that alert, you’ll be notified via text or email, so on and so forth, and then you could make a rational decision on what you want to do, and you want to plan this ahead of time, so you say, well, if I have a 10% or an 11% correction, I want to sell my holdings. Now, there’s ways within software to execute those trades as well and just, so you have to be careful with it because it might get to a point when you say, I want to sell it when it comes down to $100. Well, depending on how quickly it goes to $100, it might pass that number, it might jump down to, we’ll say $97 and your trade might not be executed, so you have to understand, when you’re doing these stop losses, how they work, and the nuances associated with it. So just be careful, so as the stock increases in price, you want to continue to move up those alerts and those stop losses so you could take the profits that you have. Again, when you are in it for the long-term, those decreases have to be larger, so if you’ve had to rally for X amount of years, four or five years, you might want to have a stop loss of like 12% and then you start entering into some danger territory which you go further down and that’s what happened most recently in the stock market. Now, the other thing is that the stock market has gone up the last couple of days and that could be what’s called a bear trap, and you’re in there and you think because you’re in a bear market and also, okay, everything’s good and basically, the market goes back down, and that’s what you have to watch, is that I personally don’t think it’s the bottom yet. There’s some reaction because of what went on with the stimulus, so on and so forth, but you just need to watch where it is. I think there’s going to be some additional pain in the market once things shake out, and you know, you might have a recovery, who knows? But I would just be wary of that and not start throwing more money, new money, as they say, into the market until you’re really comfortable with it. 

Well, thank you very much, everybody take care. Again, we’re here for you, please give us a call anytime or you could just reach out to us on our website, templarcashforhouses.com, thank you very much, peace.

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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