Templar Real Estate Radio Show Transcript 6-13-2020

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 June 13, 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 Zoppi:

Hello, 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. I’m still recording this from my home and I’m getting more comfortable by the week recording it from home, so I might continue indefinitely instead of going into the studio. We’ll see where it goes, and we’ll take it from there on that. You could also reach us templarcashforhouses.com that’s T-E-M-P-L-A-R cash for houses.com. Or you could call us at 973-240-8593. Again, that’s 973-240-8593 and we can answer any questions. Any queries you have on selling a house fast for cash, anything that you want to talk about, we’re here to help you and provide a service for you. 

We buy houses for cash. We buy apartment buildings. We do joint ventures with other real estate investors. We loan money for rehabs and also provide some transactional or gap funding as well. We work with individuals that want to invest with us in single family houses, up to apartment buildings. We do not speculate, and we’re very protective of our money and our investors’ money. 

I’m not a real estate agent and we’re not a brokerage, but I have individuals on staff that are agents and that could sell through the multiple listing service. If that’s what you would like to show, we’ll go over everything there is about real estate and those things that impact real estate. They’ll talk about our rehabs, some of our investments, what went well with our rehabs, what did not go well, some of our challenges, and how we corrected those, we’ll talk about the economy and interest rates. 

We’ll discuss trends in real estate market. Real estate is one of your biggest investments so the more you know about real estate, the better it is for you. Again, this is only my opinion, what I’m providing to you is based on my experiences and opinion. But you have to remember that you need to do your due diligence with anything you do. If you have to research something, you work with a CPA or an attorney, you still need to do some research on your side and challenge that person, ask them questions. In the end, I think it’s the best thing to do. 

As I’ve said before, you have to understand if you read an article where that person’s perspective is, is it pro an idea or con an idea against it? So, you need to look at all the different scenarios, terms of other balancing opinions to get something that you’re comfortable with. Do not just go with reading one article or just finding some information on one thing. That’s very, very important. 

When we do our due diligence for anything, we look a lot of different scenarios. When we’re looking at risk for our investments, we look at different scenarios, what could go right, what could go wrong, so on and so forth. And I highly, highly recommend you do the same thing. Whether you have a financial advisor or someone else doing your money or anything else, contractor, whatever the case may be. 

Speaking about financial advisors, again, you have to understand financial advisors usually make money when they invest their money in the stock market or mutual fund, whatever the case may be. So, as I’ve said on numerous occasions, and I think a lot of people know I’m very anti-market for the most part. But I try to give a positive and in a contracting argument for it sometimes. My view is a little bit of Russian Roulette and you can put your money in and eventually will grow, but there’s a lot of downs and ups, I just don’t see the consistency.

You might have a long, consistent run of five years, seven years, eight years. But when the market comes down, like I’ve said before, it’s going to come down and stay down for a while. And then it has to go back up and the funds have to be replenished and built up again. So, that’s the reason why I’m not too big on it. I used to train a lot as I’ve said before, and I’ve been on both sides of it. And it just is just not for me anymore. 

What we drive on at Templar is consistent returns.  And I think in the end, consistent returns, beats out any of these scenarios where it’s going up 20% and then afterwards it might go down 30% and then back up 20% or whatever the case may be. Right now there’s a lot of speculation in the stock market. The stock market’s gone crazy. Jim Cramer, who is on CNBC, he’s always talking about different stocks and he says, it’s just unbelievable right now, the speculation. And what happens is, is that right now, the fed has put a lot of money into the economy, into people’s pockets. And what’s happening is people have this extra money and they’re speculating and putting it into the stock market and it’s going up. 

And a lot of well-known investors are just scratching their heads saying it’s unbelievable because they weren’t expecting that. And again, you can’t time the market. You could never ever time the market say, it’s going to definitely go down now, or it’s definitely going to go up. There’s certain indications sometimes, but you could be off by six months up to a year for it to either go down or go up. But there’s a lot of speculation going on.

Now Hertz, Hertz is one of the companies that’s going bankrupt. It hit its low I forget–about a month ago, if I’m not mistaken, maybe two months ago. And it was down to like 56 cents, something like that and it shot up to shut up over 800% they said, with the speculation even though they were saying that they were going into bankruptcy. And then it came down again. So, it’s good if you had a 800% return that that’s great. But again, a lot of times it’s hard, the stock is riding up and you’re going, wow, this is great. I don’t want to miss it. And anytime you say that that’s the worst thing you could do, is say, I don’t want to miss something. Again, I’ve been on that side. I did the same thing numerous times, numerous times through the year. And you might catch it, but there’s a lot of times eventually it’s going to catch up to you. It’s kind of like a casino, it’s eventually going to catch up to you.

One of the things that I wanted to talk about today is also passive investing and we’ve talked about this before. That if you’re interested in investing in apartment buildings, we could do that as a joint venture. And I could talk to you more about it if you’re interested. One of the other things that I’m looking for is any apartment buildings, complexes above a hundred units. I’ll do smaller, but, you know, I really would like anything over a hundred plus units. So, if you know of anyone, please tell me about it. You’ll get a finder’s fee; you’ll get a thousand dollars for just notifying me. And if I buy that apartment building, I will give you that, as well as any house as well. So, that’s always out there. So, anybody tells me about it, and I closed the deal, they will get their money.

The other thing I want to talk about this week is a few things about inspections. We had some of our rehabs, how that’s going. Water in basements. Unfortunately, painfully near and dear to my heart. So, I’m going to go over some of that at a couple of houses where just getting lots of water coming in, it’s very frustrating and I’ll talk about that. I’m going to talk our lines of credit and process for rehabs and reimbursement for you to understand that. I’m going to talk about attorneys and some of the issues sometimes I have with them, one scenario that happened this week. I’ll also talk to you about a condo I saw this week, a one bedroom, it was pretty interesting. It’s a short story that everybody might be interested in also where the market’s going with one bedrooms. I’m going to also talk about some market trends, employees with a high-priced pace and where that might go. As well as again, I’m going to talk a little bit more about the stock market as well, and commercial real estate and where we think that’s going. 

So, the first thing I’m going to talk about is inspections. So, we had multiple inspections go on for multiple rehabs and they seem to all go, well. I’ve talked about this one town where they are very good, they’re willing to work with you. Like I’ve said before, some towns are not as willing to work with you and it’s more of an adversarial type relationship. And as a result of that, I think a lot of times individuals, contractors, investors cut corners because of that. And when you make things harder, people go around it. I think a lot of people, if they could work jointly with a township official, it’s going to be a lot easier. I’m not going to say that it’s always going to be the case where people aren’t going to cut corners. But if someone knows that there’s a partnership in terms of getting something completed, it works a lot smoother. And just, it’s just human nature. 

We, no matter what, if it’s difficult or not, we will still pull the necessary permits and go the proper way. It’s just, that’s the way we do things, but not everyone does it that way. And I sometimes understand why it’s just such a challenge and it takes so long, and as a result of that, time is money basically. So, you’ll, you’ll see a lot of investors that might cut corners a little bit. Some will pull the permits like they should, but it doesn’t always happen. And sometimes you get some shoddy work, things like that. Then we’ll come out also when you sell the property and you have an inspection and they might say, well, what permits did you pull? And, when you buy a property, you should always be asking for that and you should always check it out, what permits. 

You could use it, an OPRA report, Open Public Records Access, I think it is. And I’ll tell you all the permits that were pulled for the house from the beginning, or when they started recording it, as well as any violations that occurred, they didn’t cut the grass and they got fined for that, or any other type of violations given from the township to the person that owns the house. So, when we buy the house, we apply for permits. So, when you run an OPRA, you will see those permits. Sometimes they request that you send it to the attorney, and they won’t even pull an OPRA. But when we purchase any house, we always pull an OPRA and we see for ourselves the entire history. And I always recommend doing that. And I think that’s  very, very important. Well, this segment is closing up. I will continue shortly. Thank you very much, bye.

Joseph J. Zoppi:

This is Joseph J. Zoppi, and welcome back to The Templar Real Estate Talk Show. So before I begin where I left off on the list segment, again, if you’re interested in selling your house fast for cash please give us a call or you’re interested in investing in real estate passively, please give us a call as well. Remember, passively is where you’ll work with us, but you will not be active in the day to day operations of real estate and the transaction associated with it and the management of it. But you’ll receive consistent returns as well as a result of that. If you find a deal that you want to joint venture with us, we’d be more than happy to look at it. So, you could always give us a call on that as well. So, let me get back to where I left off in the last segment about township officials and working together.

So, as I said before if you get a township official that works with you, it’s just a pure pleasure. I’m doing a rehab right now, and the township official knows me, and we’ve done other work there  and he’s just a straight up great guy to work with. I do have a relationship with them, but even if you did not, it would be just the pleasure working with them. And that’s the difference with certain townships as compared to others. One thing that I brought up to him is that right now the property is  moving along pretty quickly with the rehab, but the back yard and side yards, they don’t look that nice. There are different fences that surround the property and I want to get top dollar for it. And so, when you look out the backyard just doesn’t look good. It’s a little bit of an eye sore. One person has a vinyl fence, another one has a wood fence. 

So, what we plan on doing is to put a vinyl fence around it. It’ll encase the yard and I’ll make it very attractive as well as the landscaping that we’re going to do so on, so forth. So, with that being said, is that traditionally, you need to get a survey to understand where the property lines are and to ensure that you’re not going in someone else’s property. A lot of times, for the most part, if you encroach a little bit, you’re not going to have an issue with, but if you need to possibly get alone and the mortgage company asked for a survey and they see something’s on the other side, well, then you’re going to have to address it. So, with that being said is I have a pretty good idea where our property lines are. And even with that being said, I probably put up the fence even a little bit closer in, towards our property anyway. 

I spoke to the township official for the Department of Public Works, which handles all the outside work. And I said to him, “I really don’t want to get a survey because it’s going to cost another, I forget how much, $1,500, something like that. And it’s going to take time and we want to put this house on the market as quick as possible.” And he said, “Joe, this is what we’ll do, is that you take pictures of the property and where you’re going to plan on putting the fence so I could take a look at it and see.” He says, “But just so you know, if the person you sell it to and the mortgage company wants a survey and they see that it’s encroaching on someone else’s property, you’re going to have to move the fence. And I said, “Yeah, that’s fine.” 

I have no issues with that. I have to do that. That’s fine, but I don’t expect that to happen. Again, I’ll be moving the fence line in a little bit, just to be on the conservative side. And if I lose a little bit, six inches or whatever it is even a foot, about a foot, foot and a half, it really doesn’t matter. It’s going to make everything look nicer and it’s going to push things through a little quicker. So, I’m willing to take that risk. And even if I have to push it in a little bit, the cost to redo, it’s relatively inexpensive. So, that’s great. 

And again, the township official was great with me. He was provided an alternative and said, “Okay, if something happens, this is going to be the, the risk you’re going to take.” And I’m fine with that. But it was really just, it was just a good discussion. He wants the town to be improved and he likes our product when we put it out. And, uh, that’s the way it always should be. It’s good to work with government instead of government working against you. And I’m a big fan of working with the government instead of against it. But unfortunately, that doesn’t always happen. 

Another thing that’s occurred these past couple weeks is that we have a couple of houses that we had some water previously, just a little bit. It was coming in the seams in the basement, nothing major, but it was more of an annoyance. And both times I had some work done on the foundation on the outside and everything seemed good and all of a sudden this past couple weeks, it’s just like, there’s two puddles, we’re finishing one of the basements and two of the corners there’s some puddles in it. So, all of a sudden this happens. 

So, if I finish the basement, which I’m going to do, and I’m going to put some flooring down, that’s going to be a problem. So now I got to install, unfortunately, probably two sump pumps, one in each corner, just to make sure to relieve any of the potential water that’s under the slab. Get it out of there and ensure that there’s no additional groundwater coming in from the slab. But it’s kind of frustrating. And the other property I had  there was a little bit localized in one corner and then all of a sudden within the last couple of weeks, it’s been like around like three quarters of the perimeter or the basement. So, we had to excavate around the property and seal it, and there was some holes in the foundation,  some of it deteriorated, so we had, they had to fix that. It was just, it was very frustrating. 

We thought we only had to go so low and then the water was still coming in so they had to dig it again and go further down. And we’re still having some challenges. It’s just, it’s been very, very frustrating. That’s one of the biggest issues, as we all know, is water in a basement. Water just finds its own level and if there’s a hole, it’s going to find a way into that hole. And it is just this mystery that it’s just very frustrating. Anything to do at water is very, very, very frustrating and seems like the past few years, I’ve had more houses with water issues than ever before and I just can’t figure it out. I just really can’t figure it out. 

One of the things that we have used before, we use individual’s money, private investors to invest in our homes, but we also use lines of credit. Because we have so many houses going on at one time. So, we use lines of credit for the acquisition of the house and also for the rehab. So once we do a certain amount of work, we’ll send that over to the mortgage company or the lending institution, and then they’ll come out and look at the work and if certain percentage was done and we’ll get reimbursed for that. And that’s standard type of like construction type loan for that. But there’s always that frustration because they’ll come out and say, well, this wasn’t done or this wasn’t done and we’ll be going back and forth with the bank saying, well, that wasn’t part of what we agreed upon in terms of the scope of work. So that’s always a challenge that we have.

We just had one the other day where an inspector came out and he was saying, well, this isn’t on and this isn’t done. And we’re saying, basically that you already signed off on that last time some of the outside work. And he says, well, it’s not completed. And I, we said, yeah, because we said it was only going to be 75% complete and that’s what we want to get paid for. But that’s always the challenge when you’re dealing with banks and construction loans and trying to substantiate the work that needed to be done. And there’s always that fight. Sometimes I don’t have an issue, but there’s always, probably 40% of the time, there’s always the challenge with that. 

The other thing I want to talk about briefly before we close out this last segment is attorneys. So, attorneys are great in terms of ensuring they protect you. That’s one thing that’s very, very important. But also, is that sometimes you need to challenge them because they don’t know everything. And I was told this a very long time ago is that attorneys aren’t good businesspeople. They might know the legalities of a contract and enforcing a contract, but that doesn’t mean they are good in terms of, and if you’re relying on them for a business decision, and I was told that a long time ago, and I took that to heart probably 20 years ago.

So, when I have an issue, I do challenge my attorney. And if I want something a certain way, it’s not, well, it can’t be done, I want to know how it can be done. So, I had this case in point where one of my contractors had an extra condenser for an AC unit. So, we have a house under contract, and we offered that condenser plus installation to the homeowner. And they said, great we were thinking of getting an AC unit anyway. So that would be good. It was priced very competitively, extremely competitively, and they were very happy about that. But then they spoke to the attorney and the attorney was concerned about two things. The money was requested for the mortgage was certain amount of money. And then we said, well, you have to add that additional compressor and, and the work associated with it. So, he was worried about the, uh, appraisal, which I can understand to some extent.

He was also worried about how he would word it in the contract because we wanted to do it after we sold the house, I wasn’t going to install the unit before and then something happens and then I’m stuck with a unit installed that I don’t want to install the, now I got to pay for it. So, we wanted to keep the money in escrow, close on the deal and then after that install the compressor. So, the attorney pushed back on the individuals that were buying the property and said, well, I’m not sure how to word it and stuff. And when I hear things like that just kind of gets me kind of crazy because I don’t look at things that way, I look at how can we do it, or how can it be done?

You know, I don’t want to hear from my attorney or some other way or contractor, can’t be done. Tell me how I can or how to work it so it can. Maybe this scenario has to be worked a little differently, but just by saying, you can’t do it, that’s just kind of gets me crazy. Now you have individuals in New York city purchasing billion-dollar properties. How do they purchase a billion-dollar property you know how complex that is, and  we can’t figure out how to put something in there for a compressor that’s $7,500. So, that kind of stuff just gets me a little crazy.

So, I got a close up today and close out on this radio show for today. Thank you very much for listening. If you have any questions, please give us a call at 973-240-8593. That’s Templar Real Estate Enterprises. You could Google us and give us a call, please. And again, if you want to sell your house fast, or you want to sell an apartment complex, please give us a call. Thank you very much. And God bless.

The preceding program was paid for by Templar Real estate. The views and options expressed 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.

END OF RECORDING 

Listen to Us on the Templar Real Estate Show on WMTR 1250AM on Saturday at 10:00 AM

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