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 April 11, 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. I’m a real estate investor, consumer advocate, author, and managing partner of Templar Real Estate Enterprises. I’m recording this from my home, so please excuse the acoustics on this. I don’t have a regular raw recording studio, so please bear with me. I don’t know if I’ve said this in some of my other broadcasts, but I was recording from home as well for those, so again, please, excuse the acoustics. You could reach us on Temblor cash for houses.com or call us at 973-240-8593 and we can answer any questions you may have or email us from our website. If you want a certain topic discuss, we’ll be more than happy to address it, please just drop us a line or send us an email on that.
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 or gap funding. We work with individuals that want to invest with us in single family homes, all the way up to apartment buildings and complexes. We do not speculate. We’re very protective of our money and our investor’s money. I’m not a real estate agent. I have individuals on staff that are agents. If you want to sell your house through the traditional method, we can list it on the Multiple Listing Service, but again, we’re not a brokerage.
In this show we’ll go over everything there is about real estate and those things that impact real estate. We’ll talk about our rehabs, some of our investments, what we went through, what we did not do especially well, and how we learned from it. We talk about the economy, interest rates. We’ll talk about trends in real estate market. Real estate is one of your biggest investments, so it’s important that you know as much as possible about that. I’m going to provide my opinion, it’s only my opinion. I ask everyone to do research. I always say no matter who providing the information to you, whether it’s an attorney, a CPA or any other individual, please look very carefully at research in it. If you read certain articles, those articles are those opinions of that person. It’s not necessarily the truth, you don’t know. You need to look at different avenues in terms of researching these things to really get the full picture.
We are also having discussions on real estate terms of individuals that want to call us. If you’re worried about keeping your house, please give us a call. These are all free of charge, so we’re not paying you don’t have to pay us for any of this. If you’re concerned about losing your house now, or in the future, please give us a call, we might be able to help you or just provide some certain suggestions on how to approach this. Right now, obviously there are no evictions, there are no foreclosures and a number of governors including Murphy, Cuomo and a few others have enforced that for FHA. That as well throughout the country, so that’s how to stand still. So everybody has some breathing room, but obviously things can come up pretty quickly, once things come back to normal or semi-normal.
I was interviewed last week for Fox Business. The article is The Best Time to Sell Your Second Home. You can read it there and you could see that on the internet and it’ll eventually be posted on our website. Today I’m going to talk about a few things. I’m going to talk about the market a little bit and the second is the CARES Act, which is really super important. As I’ve stated previously, I’m not a big fan of the market but I think it’s, it’s very important that I talk about the market in terms of what’s going on and where it’s going. But again, these are my opinions, look out, there are certain individuals saying it’s the best time to buy, and there’s other ones saying, just ease up a little bit we have to wait until things shake out. I’m more towards the let’s wait and see what shakes out.
Today, which is Friday, which is this recording, the stock market is up right now. But I think we’re going to be in for some rough times. Once people go back to work and businesses come back online. My suggestion is, and it’s only my opinion, is that the market will come down again.
I would not be greedy and I would pick a point at which you’re happy if this market is going up, which it is and possibly sell. I don’t have a crystal ball, I could be wrong, but personally, you know what they say, “a bird in the hand is worth two in a bush.” If you say you’re going to be a long-term investor and you want to keep it in, that’s great, excellent. Each person really needs to look at their own risk tolerance and what they’re looking at for the future.
I’m not one that likes the market, so you need to understand where I’m coming from. Also, you could put what I strongly, strongly recommend, if you can stay in the market you can put certain alerts on your holdings. There are a lot of free apps out there, as well as if you’re using TD Ameritrade or things like that where you could put a alert on when a particular stock or mutual fund goes above or below a particular number. It will alert you; it will send you a text message, email or a combination thereof. I think that’s really important.
Sometimes in talking to a lot of other individuals is that all of a sudden the market comes down and either they’re not paying attention to it, or they realize like, “Holy mackerel, it’s gone down this much already.” And you know, if you do a few things that are proactive at least you could say, “Okay, if it reaches to this point I’m going to call my broker up or I’m going to call my financial up and say let’s liquidate my holdings” or “Let’s keep it in. Now financial advisors, a lot of times like to keep things in, they don’t watch in really a cash position a lot of times, but sometimes that’s the best thing to do.
Another thing is you could have these discussions with your financial advisor. You could say, “If it falls below a certain percentage I want to sell.” Then you’re in control of it instead of it just going down like 20, 30% and then biting your tongue and waiting for it to go back up. I’m not into that approach at all. A lot of financial advisors are, and they’ll say, “Well, just ride it out over the long-term.” I just never thought about it like that. Maybe in the past I did, I got brutalized a few times on the market because of that. But after looking at things I questioned that approach and I think it’s for the best. If you have an understanding of where you’d want to sell at least you you’re in control. And I think that’s the biggest thing is to be in control, that’s just the way it is.
With the market and where it’s going to rebound, there’s a lot of questions about that. And they’re talking about the market is going to rebound and the pro church is, or the scenarios are, it’s going to be either a V-shaped recovery, a U-shaped recovery or a L-shaped recovery. So, if we look at each letter, so if you can picture a V you see it goes straight down and then go straight up. So, they’re saying possibly the economy will go that way, come straight down and then shoot right up. Now the other one is that U-shaped economy, so it will go down, it’ll stay down for a while and then come back up. Just like a shape of a U. The last one is an L-shaped recovery where basically it goes down and then goes flat or it’s low for a considerable period of time.
The question really becomes, nobody really knows. One of the things that is in places the bailouts to help the economy through what the Congress has put through. And I think that is really, really important. Back in 2008, the feds and Obama wanted to in terms of the recovery is basically based on monetary, which was the fed reducing interest rates and also the government given certain bailouts or certain loans and bailouts to large companies and that was it. And I think what’s going on now is with the Trump Administration and Congress together, they have put a package together that says that they’re not only doing monetary, but fiscal also. So, it’s not only large companies that are getting bailed out and being helped and not only are interest rates being reduced, but all these different programs are being implemented so the regular mom and pop business and person as well could be helped. They’re tackling it from two approaches, and I think that’s great. When it did come out and they were talking about the numbers and just like $2 trillion and it was good that they were reacting quickly.
The one question I had is that, is that enough? It was very early, they made an estimate, now they’re looking at it again saying, “Well, maybe it wasn’t enough” and I think that’s something that’s important to look at. They might have to have maybe a second and a third. I would not be surprised at that, but they are working very hard to push the economy and make sure that it gets jumped started very quickly. Now, obviously the way the environment is now from an economic perspective was a lot different than back in 2008, granted. But I think in 2008, if they had put more money into the people’s pockets to accelerate the growth it would have been for the positive like they’re doing now. The second half of this segment, I’m going to be talking about the stimulus package and what’s involved in it. And I think it’s an extremely powerful package. I think you can help a lot of people and there’s a lot of upside to it. So, I’m going to take a break right now and I’ll be right back.
Joseph J. Zoppi:
Hello, welcome back to The Templar Real Estate Talk Show. My name is Joseph J. Zoppi, and I’m managing partner for Templar Real Estate Enterprises. So, first thing I’d like to do is talk about first responders and restaurants. So, my son, I’m very proud of him, he’s a third-year nursing student and on the first aid squad. He’s really picking up a number of the coronavirus victims, they’re transporting them to the hospitals. I’m very proud of him and what he’s doing and in June, he’s going to be starting at a hospital doing an internships, so he’s going to be really in the lion’s den with that. He’s 19 years old or 20 years old, I keep thinking he’s younger than he is, but he’s still pretty young.
The other thing I wanted to say in relationship to the first responders in restaurants is that, you know, a number of these restaurants are just getting clobbered. There’s really hardly any business, even with the takeout, it’s only so much. If you really understand business and overhead and the businesses not used to doing massive amounts of takeout, it’s a big wear on them. But with that being said, even though a number of these restaurants were really getting hit financially, very hard, a number of them are giving it everything they’ve got. My son’s first aid squad gets donations constantly from different restaurants and businesses. They bring over food for them and that’s unbelievable, it’s just so giving of these people and their business to help the first responders out. It’s really just unbelievable to see that.
If you think about a restaurant, most restaurants they don’t get rich owning a restaurant for the most part. They do it because they love food and I think they do it also because they like to give that food to people and see their joy when they’re eating. That’s the type of people who are in restaurants and that own restaurants and those chefs, it’s a big part of who they are. So, I’ve got to take my hat off to them. Even though they’re down on their knees, they’re still giving. If you could go to a restaurant just for takeout, or they can drop it off, as long as it’s safe, I truly encourage that. One place I go they reduced their fee on their sandwiches for to go. I was like, “Why are you doing that?” I’d say, “No, I want to pay full price” and obviously I gave a great tip. But these people always want to give and it’s just really a testament to who these people are, these restauranteurs, as well as the first responders in terms of what they have to do now these days, put their lives on the line against this virus.
What I’d like to talk about now, which is really important, I think everybody should be researching this because it’s really, really important. I’ve been telling a lot of people about it, a lot of individuals that I know about this and that’s the CARES Act. So that was implemented by Congress, put into place and obviously with the president working on it. It stands for the Coronavirus Aid, Relief, Economic Security Act. It’s something that you should really, really look into if you’re any type of business, if you’re a contractor, a sole proprietor, any of those, this can help you out. It’s very, very, fairly generous in terms of a lot of different features within these packages.
The first one is–and you can get all this information online, just look for CARES or SBA. SBA is Small Business Administration; I think it is. It’s really important that you look into this because it can really help you out personally and for your business, it goes either way, for your business or personally. The first one is the Paycheck Protection Program, there are four programs. The first on is the Paycheck Protection Program, it’s an SBA loan that helps businesses keep their workforce employed during the Coronavirus crisis. What it entails is the SBA, so that’s a small business authority, will provide loans. They provide loans usually through different banks. We’ve never really applied for those, sometimes they were just a pain in the neck, but they’ve loosened up a lot of the standards. The Congress has really done a really good job with that. It’s extremely, extremely easy to quality.
The SBA will forgive loans to employers if you keep employees on the payroll for eight weeks during this time. These loans are going to be used for a couple of things, they can be used for payroll, rent, mortgage, mortgage interest or utilities. You can apply through existing SBA 7A lenders, those are a lot of the different banks and things like that. Or through federally insured depository institutions, federally insured credit union, farm credit systems, there are a number of different means and where you can get these. Other regulated lenders as well will be available to make these loans once they are approved and you’re enrolled in the program.
Then you should consult with your local lender as to whether you could participate, but it’s fairly lenient. Lenders will be processed as soon as possible. I’ve heard some people have already received these loans. Larger banks are taking considerably longer, but if you have a small institution you’re working with, it can go fairly quickly. It’s for any small business concern that meets SBA size standards and usually that’s 500 employees or less. It’s any business 501c3, which is a nonprofit, 501c19 which is a veteran organization or some tribal businesses. And again, this is for sole proprietors, independent contractors and self-employed persons.
If you have a mortgage and it’s going to be used when you’re you have a business and you want to keep staff on, you could use this to ensure that your staff has paid. Eventually depending on the situation, it can be forgiven and that’s a big thing. So, the loan will be fully forgiven if the funds are used for payroll costs, interest on mortgage, rents and utilities. But 75% of that will be used for payroll, 75% needs to be used for payroll. The other 25% could be for mortgage interest, so on and so forth. The loans will be deferred for six months, which is good. So, give you time to, uh, get out of this crazy time. There are no collateral or personal guarantees required, but it will be forgiven if you follow those things. Now, if you don’t follow them to the letter, then the maturity is two years and the interest rate is 1%, which is like, as they say, free money basically. That’s really, really important.
Next one is the Economic Injury Disaster Loan Emergency Advance. So, it’s an advancement. This loan advances will provide up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties. Again, if you apply for this, you could get $10,000 as long as you qualify for it and there’s not much for a qualification. As I said it’s called the Economic Injury Disaster Loan Emergency Advance which will advance you up to $10,000. It’s a relief to businesses that are currently experiencing a temporary loss of revenue and the funds will be made available upon the successful application. The initial application can take literally 10 minutes, we’ve filled out once ourselves for all our different businesses.
So, we have a lot of options in terms of what we’re doing in terms of our rentals in terms of our core business and in terms of our property management company, so on and so forth. I would strongly recommend you look at this. And this program is for any small business, with less than 500 employees, including sole proprietorships, independent contractors, and self-employed persons. The one that had to do with, as I said before, keep staff on, they would give you money for that and this one is for impact to your business. So that’s for other stuff that impacts business. So, one is to keep your staff on and the other one is just to help your business. So, it helps in two ways. Again, it’s for, like I said, independent contractors, self-employed persons, nonprofit organizations and veteran organizations. And again, it’s going to take a little bit of time in terms of large institutions implementing some of this, but they’re trying to race through this and get everyone funded and loaned as soon as possible.
The next one is an SBA Express Bridge Loan that enables small businesses who are currently having a business relationship with the SBA lender to access up to $25,000 quickly. So that’s extremely important. And then there’s another one in SBA Debt Relief one. This is providing financial reprieve to small businesses during the COVID-19 pandemic. Again, it’s going to give you some relief if you have an SBA loan, so you won’t have to pay it for a certain period of time. But with any of these, I would strongly, strongly–I can’t say it enough–look into it, no matter what it is. If you’re a small business, if you’re a sole proprietorship, if you’re a contractor, even a contractor, you can do it, so it’s very, very important that you to look into this and there’s a lot of information on the internet for it, so you can research it.
You could also talk to your accountants, uh, about this. But it’s something that’s really could be beneficial and really not only tide you over during this tough time, but maybe accelerate growth. So that’s one of the things that we’re looking at is even growing even faster in terms of our company, just based on certain programs and what we could do to even push our company faster and harder and make it grow bigger as a result of this. One of the things that some people do is when there’s tough times, they shrink, but I strongly encourage people to push through and there’s opportunity. Just, you have to look at it, see what’s going on and see where you can make the biggest impact. Because there’s an impact you can do. For restaurants, it’s going to be challenging, but again, if you create a niche and you create something that you need, people who go to it.
I’d like to thank you very much for your time. And I wish everyone the best, uh, God bless take care and I’ll see you next week. Bye.
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