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 18, 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:
Hello, 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 you’ll have to bear with me, the sound quality isn’t that good. You could reach us that templarcashforhouses.com or you can call us at (973) 315-7990. And we could answer any questions you may have, if you would like us to discuss it on air. Or you could email us from our website to ask us anything.
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 funding as well. We work with individuals that want to invest with us on single family houses, as well as apartment buildings. We do not speculate. We’re very protective of our money and our investors’ money.
I’m not a real estate agent. There’s another individual that has my same name, but he’s an agent and I’m not. Way back when my father was alive, he said to me, “Joe” he says, “Make sure you always use your middle initial because there’s a lot of Joseph Zoppis out there and you’d be surprised.” And that’s one of the reasons why designate myself with my middle initial, just to make sure who you’re looking into or who we’re talking about.
This show’s going to go over everything to do about real estate and those things that impact real estate. We’ll talk about our rehabs, some of our investments, what went well, what things did not go as well and what we learned from them. We’ll also talk about the economy, interest rates, discuss trends in real estate. Real estate is one of your biggest investments, so it’s important that you know as much as possible about it. As I said, I’m going to provide my opinion. It’s only my opinion. I strongly, strongly suggest that everyone looks into things, double checks, triple checks, because the more knowledge you have the better it is.
And I always say when you look at articles or hear or anything, make sure you understand the point of reference of the author or the person writing it. It might be slanted a particular way, especially with politics and some other things as well. So, you need to balance that out and really get both sides of the story. It’s very important that you do as much research as possible. One example of that is, we had a rehab going on, it was six months ago. It was a small house, and we demoed the bathroom. Traditionally when we’re demoing the house we usually leave the bathtub because usually what we do is reglaze it and we get a five year warranty on it and it’s pretty good so we don’t have to rip that out and cause additional cost to the project.
My contractor removed the toilet and everything else. We put everything back, he tiled, everything did a great job. And then he called me up and he said, “Joe, I think we have a little problem.” I says, “What’s the problem?” He said, “Well, the standard toilet doesn’t have enough room to sit on the toilet between the toilet and the tub.” And he says, “I tossed out the old toilet so we can’t use it.” I did some research, and I was calling up a number of different supply houses and I had my staff do that as well. We’re looking all around and the supply houses said the smallest one was a 27 inch–if I’m not mistaken, it’s been a while–in terms of its depth.
I looked around and then I came up with two options. One is a floor mount, which you traditionally see in a house and then there’s another one, which is a wall mount. Now the wall mounts are smaller, and it would have given enough room, but with the wall mount, I would have had to redo the plumbing and I didn’t want to do that. So, I kept calling supply houses and they all kept saying the same thing, the smallest one is 27 inches so on and so forth. Then again, I didn’t believe it. And I looked around, looked around and I found one that was like 24 inches, so that three inches was just what we needed.
I did find it and these individuals that deal with this every day they’re used to one type of toilet and they were wrong. They handle it every day and they were wrong. So again, you always do your research on any of this. You’d be surprised what’s out there. You just, just have to look hard for it. The costs was a little bit more. Traditionally we get a toilet for about $100, and I think this one was $300. What was really funny is that after the house was completed, we invited the old homeowner to come by and she said, “Wow, you did a great job” and everything else. She went into the bathroom and then she says, “Oh wow, you’ve got a toilet where it could be straight instead of sitting on an angle.” I go, “What do you mean?” She says, “Yeah, previously we couldn’t sit straight either. We had to sit on an angle.” I was laughing because we thought there was just a smaller toilet, but that was not the case. When the house was designed–it was an old house, so those things weren’t thought about, so it was kind of funny.
Also, I want to make sure everybody realizes we’re here for you. Templar Real Estate and our staff is here to help you out. If you have any questions or concerns about losing your house or potentially losing your house, please give us a call. We’re not going to charge you anything. This is just a service we want to provide you to help you out. Especially nowadays with what’s going on, and people losing their jobs, and the uncertainty, which is going to be for a while. Please give us a call on that. That’s very important. Also, obviously, if you’re interested in selling your house for cash and you need money fast, please give us a call.
We have certain new policies based on COVID-19 and in terms of looking at houses to ensure the safety of everyone involved. Traditionally we start off with a phone call and we would interview you over the phone in terms of getting some information about the house. And then if we both decided to go forward with that, we would do some type of virtual tour, which we’re doing a lot of now. And that is basically someone would connect with a FaceTime and we could see your house through like FaceTime or your tablet or your computer. And we could walk virtually around your house, take a look at it and then after that, we would provide you a quote in terms of what we would purchase the house for.
If you agreed to it, we would send over to your attorney, a contract and the attorneys would go back and forth if there were any changes. Traditionally, or our contracts are pretty generic and there’s not really too much, if anything, that needs to be changed. But certain attorneys feel like they need to change things and that’s fine with us. Once that’s done everything can be signed virtually basically through the computer. And then we would send someone to your house, they don’t have to go in, but what we do is do a tank sweep and we do that with all our houses we purchase it’s just a prudent measure. I’ve brought this up before, basically a tank sweep is one where an individual walk around the house with this device which will send radio waves down through the ground and then come back up.
If there’s any buried oil tanks he’ll notify us of and then we could discuss it with the homeowner. That’s because sometimes the old tanks were buried and there’s sometimes environmental issues. So that that’s something that all, for the most part, cash home buyers will do. Those that do not do it, that is just reckless because an environmental issue with oil in the ground could cost 30, 40, $50,000, so that’s just reckless. For the most part, we don’t have to do a walkthrough of the house. Sometimes we might, it depends on the situation. Either way, once that’s done, we would basically just have a closing date.
Again, everything could be done through your home and closing package could be sent to your home, you could sign it and then sent it back. Then we would just close on a given day and then we would wire you the money and in would b in your bank account within hours. So, for the most part, we wouldn’t have to visit your house. Like I said, if, if we did, for certain circumstances, we would schedule it and we would do certain things to ensure the safety of both the individual going there, as well as your family’s safety. So that’s in case you do want to do it during this time.
One of the other things I’m going to talk about briefly is the CARES Act. I brought up the CARES Act last week about different programs that the government is putting out. And I encouraged people that were self-employed, contractors, business owners, to file for that. I’ve gotten a lot of calls on it and I’ve done some additional research and we followed up with a few things. One of the things that was stated in the beginning with this CARES Act is that people could get $10,000 “immediately.” That’s how it was stated and that’s what everyone believed. But now they are changing it and saying it’s really $1000 per employee, or if you’re self-employed is just yourself, so you get $1000 plus an additional loan, if you qualify.
Things are changing very quickly. I spoke to two CPAs this past week, and they were under the same belief that it was $10,000 and that’s the way it was written, but things are changing very quickly and certain banks are changing other requirements. The government puts something out and then after that, the banks will tighten it up in terms of what their requirements are. Case in point, you have a Wells Fargo now with the PPP Program and that’s for self-employed people, individuals, contractors, things like that. You could apply for it if your bank is Wells Fargo we’ll say or even Chase or whatever the case may be.
Now with Wells Fargo, they have a little bit of a different take on it. And their statement is that you have to have a business account. Now certain sole proprietorships and independent contractors don’t have a business account, they just don’t. So, you can’t apply for it through Wells Fargo, even though that’s your bank and there’s no way around it. So there’s a company out there called Kabbage it’s with a K and you can apply through Kabbage and they’ll source the loan through an another entity, another bank or a mortgage institution, it’s Kabbage.com. And again, you know, like I said, things change, and you have to research things and they’re not always what they originally say they were. Things have changed a lot, especially with this CARES Act and things are changing considerably and they’re changing very fast.
One of the other things that’s coming up with that, is that they say they ran out of money and now they’re looking for additional funding. Now, if I was you and you didn’t apply for it, I would still apply for it even if they said they ran out of money. Because there’s supposed to be some additional funding that’s coming right now, it’s stuck in Congress and I wouldn’t be surprised that there might be a third wave of money given as well. But a lot of people jumped on it very quickly because of how attractive it was in terms of the interest rate and how they would forgive certain types of money if it was used for certain things. Again, I would definitely, definitely, look into that.
I have an investor friend of mine, I called them up and told him about it and he didn’t know anything about it. And then a couple of days later, he got an email from his CPA saying the same thing, you should apply for it. I spoke to him the other day and I talked him through a couple of the steps he was having some problems with, but it’s pretty straight forward. There’s also a number of YouTube videos on it, but I would research those and make sure that they’re good and they have good quality on it. Again, do your research, do double check, triple check, so on and so forth. I’m going to close out this segment and I’ll be back in a few minutes. Thank you very much.
Joseph J. Zoppi:
Hello this is Joseph J. Zoppi, welcome back to The Templar Real Estate Talk Show. In this segment, I’d like to go over a few things. The first is some of the work we’ve done this week. Right now, we have a house in Central Jersey, and we had some permits done for a basement, which we’re redoing completely and new bathroom and a number of other things. I’ve talked before and I vented before about some of these townships. Unfortunately, I’m going to vent again. We had three permits: one was for building, which was for all the studs and everything within the basement. We had a plumbing permit because we added a laundry room. Also, in the new bathroom we have a new shower in place and sinks, so on and so forth. Then we have some electrical receptacles for the bathroom, the switches, some high hats and in the basement as well, some high hats and receptacles along the walls.
It took a long time to get the inspections. The township was closed for a while and that’s understandable. We requested inspections and of course, no one called us back. And then we followed up again a couple of weeks later, I should have followed up earlier, but we didn’t. We followed up and we got the schedule for the inspections. We went through, we passed the electrical, which was fine. There was an HVAC one we had passed, the one is fine as well. There are two sets of inspections usually for anything, there’s usually a rough inspection and then there’s a final. The rough is where you, let’s say for plumbing, you put in all the pipes and not everything is connected. Or some of it might be connected, some of it might now, like the faucets won’t be connected. The walls will still be opened. So, the inspector comes in and makes sure that everything is according to code. Same thing with the electrical.
After you pass your rough inspection, then you can start closing up walls and then connecting the outlets and connecting the faucets, so on, so forth. Then you’ll get your final inspection. What we did is we were having our rough inspection. Again, we passed the electrical fine, the plumbing we did not pass and again, some of the stuff they don’t pass on is–my plumber did everything according to code but, again, the inspector has certain interpretations and wants things a certain way so we had to come back out for that. There was a laundry list of things that needed to be done. Everything that they do, they scrutinize it a lot, some of these inspectors and it’s just very time consuming.
So as always, I wanted to reschedule to get a review of the inspection after we made those changes, that the plumbing inspector requested, and I left a message for the township, I emailed the township and then I called them again and then I followed up again with them. And finally they picked up the phone and I said, “Well, we’d like to go back out there, we had to make a couple of modifications to the permit because certain things were not to the inspector’s satisfaction in terms of what was on the permit so we needed to update it. We wanted to fax it in and then while that was happening, schedule a new inspection. The woman had just put roadblock upon roadblock with me. First, we had to send it in or drop it off in their mailbox because we couldn’t drop it off at their desk because it was closed. Because when you do a permit the contractor has a special stamp to stamp that it’s a valid contractor and they needed that.
I said, “Well, can’t we fax it for the time being and we’ll send it in?” I go, “During this time with COVID and stuff” and they were adamant, and it was like, “That’s just not the way it is. We’re not allowed to do it.” And it was just one roadblock after roadblock, after roadblock, I was just extremely frustrated. Sometimes certain townships, we could schedule everything one after another, so we can do plumbing and then electrical and then finally you do building and framing. And if you don’t pass the first two, they cancel that last one for the framing. I wanted to do the framing and she didn’t want to do that either. And I said, “Well, can’t you just cancel it if we found the other ones?” And she was just adamant about it. There is no wiggle room on any of this and it’s just very, very frustrating especially the way things are that there’s a zero flexibility of other companies that are busting their hump to provide services to people. Then you have the township government putting every roadblock just to make things more difficult. So that’s my rant for today on townships and how much they put in front of you to make things hard.
Next thing I’m going to go over is something I brought up a while ago, it was very brief and that has to do with loan modifications. I was talking to a agent once and they put it very accurately and they says, “A loan modification is just one step closer to foreclosure.” If you want a loan mod because you can’t afford your current loan, it could take anywhere from six to nine months to go through the entire process. And during that time, obviously if you’re having problems paying, you’re going to continue to have problems and the fees and the bills for the mortgage are going to continue to mount. Most people obviously would try to take the money from some other places and try to put in towards their mortgage, so they don’t continue to incur all these costs.
What happens is, is that the banks, a lot of times, will take fees and all the back amount owed and they’ll extend, the loan out so instead of having a $200,000 loan and it’s supposed to mature and be finished in 30 years, it might now be a 40 year loan and instead of 200,000, it’s 220,000 or 230,000 or whatever the case may be. That’s one of the things that these banks do, and it really doesn’t protect you. If you do a loan mod, you really have to read the terms and conditions or have someone help you interpret it.
Those documents are very long and after you start reading them, your eyes glaze over and you’re like, “I don’t care” or “I think I got the idea of it.” Please don’t do that because you might not realize what you’re signing and how bad it could be. I say that all the time, I’ve heard so many people with these loan mods and I listened to it afterwards and what the terms are, and it’s just, they’re horrendous. They are horrendous. They got you over a barrel because it’s your home. You want to keep that you have a family, possibly you don’t want to uproot the kids and it’s just, it’s just horrendous. You have to be careful about that.
I was reading an article and it was talking a little bit about back in 2008, 2009 when they were doing a lot of these loan mods. One of the things that I experienced with a friend of mine, they were going through a loan mod and it was with Bank of America and they submitted the paperwork, and they were going to foreclose on them. What happened was he submitted it three different times and they kept saying that I lost the paperwork. I’m thinking myself, “How can they lose the paperwork then many times?” And I’m saying to myself, “They were playing games.”
What they do is then your bills are mounting and that’s what happened with him and all they wanted to do is foreclose on the property, that’s all they wanted to do. So, I’m reading this article and it described that exact situation and there was a whistleblower from Bank of America, and this is the same Bank of America that he was using. And they said that, “Yeah, we used to lose the loan, lose the paperwork or do other trickery things to eventually get as many payments out of it as possible and then foreclose on the property.” This was brought to the attention of, you know, the Justice Department, I think, and nothing was really ever done with it. They were fined a little bit, the banks, but they got away with murder and that’s why I never trust the banks because they’re always going to do something in terms of fees, They’re going to do a lot of different things. It incenses me that they get away with that.
I’m coming to an end on our broadcast, but a couple other quick things. If anyone’s looking for a job, one thing that you could do is, and I heard this from someone and I’m passing this on this information, is that if you don’t have a job or if you need some additional money companies like DoorDash, which basically they go to a restaurant, they pick up the food and then they drop it off at someone’s house. It’s like McDonald’s, it could be a lot of different things. And you know, this one individual that is a college student that was doing it, he was making about $33 an hour because DoorDash doubled their salary during this COVID-19.
You have an app, it tells you where to pick it up and you really don’t even converse with anyone, they just leave it in a slot or leave it out, you pick it up and you drop it off at the door and then you don’t even have to ring the bell. Or maybe you just ring the bell and then that’s it, you don’t have to talk to anyone. And then you put in the app and say it was completed. It’s kind of like an Uber app. These college students and some other people are making thirty something dollars an hour. In these tight times, if you need money it’s sounds like a great opportunity. They’ve got other ones like Grubhub and a few others, but this one was DoorDash. So, I’d highly recommend it to anyone that really needs the extra income. You can pick the town that you want to service or towns and yeah, it’s just kind of like Uber, but at least you don’t have to take any strangers in your car, which I think is a great thing.
Again, I wish everyone the best, be safe and God bless. If you need me, please give us a call. Thank you. Bye.
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