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 20, 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, real estate investor, consumer advocate, author and managing partner of Templar Real Estate Enterprises. I’m recording this from my home and as I’ve said numerous weeks, I’m getting kind of comfortable with this, so I don’t know if I’m going to be recording back in the studio any time soon except probably under certain circumstances when I start bringing on more guests, but even that I’m not quite sure. I could probably fiddle with something, work it on through some technology, so home I stay. That’s pretty good. I’m really happy about that. Saves some time traveling to the radio station and back, and I never have enough time for anything, so I think that’ll be good.
You can reach us at templarcashforhouses.com or you can call us at 973-240-8593
and we can answer any questions you have or if we could address anything on the air that you may have, that you would like to be brought up on the radio show, we’d be more than happy to if we can fit it in. 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, as well. We work with individuals that want to invest with us in 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 and we’re not a brokerage, but I do have individuals on staff that could sell your house through the traditional MLS as a realtor. Some of them are very, very good at it, so I encourage it if you want to go through the additional was a, as well.
This show is going to go over everything there is about real estate, those things that impact real estate. We’ll talk about unremarkable rehabs, things that went well with our rehabs, the challenges we have. Real estate is a tough business and we’re always running into issues no matter how well things are planned. There’s always something new that comes up. That’s just the way it is. We will be talking about everything to do, which impacts real estate. Real estate is one of your biggest investments, so it’s important that you know as much as possible about real estate and how different factors affect real estate from the economy to anything going on through the world. There’s always the ripple effect. One of the things that I continue to say and I continue to push on is that this is only my opinion and you need to do your research in anything you do. If it’s a CPA, if it’s an attorney, if it’s a contractor, if it’s us, we encourage it and we highly recommend that you definitely research everything before you make any type of decisions. That’s very important. As I’ve said before, when you’re looking up information on the internet you have to understand where the author is coming from. The author might have a certain slant towards a particular way they want to portray the information, so you need to understand that.
These writers are going to their editors and they’re looking for trendy type things to write and because of that they might write it in a certain way. So, you have to beware of that. I was going to bring up something later on in the broadcast, but I think this is a good example of what’s going on right now. So, right now in the market, stocks are going up and up, an up, and up. I was very clear, I did not see that as the case. No one can predict when the market’s going to go down or how. There is no timing of the market. So, one of the things that’s happened is the Fed has injected a lot of money into everyone’s pockets, into businesses to prop up the economy, which isn’t a bad thing. With that being said, the stock market has gone up. Now, a lot of individuals, especially younger ones, are on this trading platform to invest in stocks call Robin Hood. One of the big things about Robinhood is it’s basically free trading. There’s certain clause associated with it, but they’re considerably less than any of the other discount brokers?
So, you have this cheap money coming into people’s pockets. They saw the stock market go down and they put this money in. Now, a lot of the big players and billionaires have been and continue to this day, to be very concerned about where the market is in terms of the valuation. There’s numerous articles on it. One of the things I’ve spoken about is Warren Buffet. Warren Buffet is sitting on a lot of cash. Why is he sitting on cash? Because he knows the value’s not there. There’s no value there in terms of him getting a company at a good price right now. He’s not getting calls right now, so he knows it’s not the right time. You have Mark Cuban, which said probably a month and a half ago, that he was trying to be an all cash position. These guys, they know what they’re talking about. You have some hedge fund individuals as well that are even saying the same thing, but with that being said you have certain articles that are being written saying that the amateur investor is beating out Wall Street and they’re showing them that the market’s good and there’s egg on the face of all these very influential people. Again, that’s just an article that’s written. Do not always go by what that is because it captivates you and then you go I have to jump in and I have to do this. That’s with anything whether it’s real estate or anything else. When things are going up everybody looks like a pro. Back in 2000 I was investing before the dot com disaster, I was like wow this is great, I know what I’m doing and tens of thousands of individuals thought the same thing and then the market crashed because it was just an inflated bubble.
Then, the same thing happened in 2008. I know a lot of investors through my mastermind, it’s an affiliate of 150 of the top rehabbers and real estate investors for single-family and some apartment buildings throughout the country, these are the best of the best, and there’s many stories that they have of when real estate was going up back in 2007, 2008, before everything was crashing that they said they couldn’t do no wrong. They had the answer. The same thing is now with the stock market, it’s going up so everybody’s a winner and it’s not the case because there will be a day of reckoning. As things go up people become more and more risk tolerant, so they continue to push further on risk and they get into riskier and riskier assets and positions. For a while they’re going to be making money and then they’ll continue to do it.
I’m speaking from experience. The same thing happened with me when I was trading. I was able to get out of a lot of things without too much heartache. I knew options really well, so I was able to play it, but a lot of individuals they’re self-taught. I was taught by an individual that was unbelievable in options trading, so I was fortunate. I paid a lot of money for it, but I was very fortunate. I always did well for the most part, but there were times I was on the wrong side. Then, you have to take your lumps with your bruises and all those things. With that being said, you’ve really got to watch in terms of where the risk is, whether it’s the market going up in stocks or real estate.
Right now we’re in a pretty good position on the real estate side. Things are pretty close to all-time highs. There’s not a lot of inventory, so that’s good. So, as a result, the prices are staying solid. Again, I would not be banking the house or the farm, or whatever the case may be that it’s always going to be that way. That’s why you’ve always got to be looking at that. Through all the years of doing trading and things like that, it’s really helped me on the real estate side because I’m more cautious on certain things. I’m always waiting for the next turnaround to go down, so we work that way, we put our risks associated when we purchase properties, apartment buildings, so on, so forth. When we purchase apartment buildings we’re not purchasing these high-end apartment buildings that only a few people can afford. It’s more blue-collar, pretty standard apartment buildings that a lot of individuals could afford. Some people like the glamor and glitz of these high-end apartment buildings, but that’s not us. When things go bad the first thing that goes bad is those types of assets. Then, it keeps going down further and further. Usually in the area of blue collar type neighborhoods with apartment buildings they can absorb a lot and they don’t get hit as bad. That’s why we like them.
I had a real estate investor that he invested in Livingston, a beautiful house, he made really good money, but he had a couple of bad deals. He lost 300,000 in one house and 150 on another.
That’s the problem when you’re dealing with really high end properties whether it’s apartment buildings or houses. When I looked at that one house that he lost 300, 00 on it was flawless. It was just a beautiful, beautiful house. It happens and that’s why I learned from that. I said I’m not doing anything like that, I’m just doing basic houses that everyone could afford, not a $1.4M house. I’m not doing it. We’re very happy for that. We’re financially super stable and growing, and that’s just ensuring what the risk is and protecting your assets. That’s one of the biggest things you do, asset protection. We want to make sure that we don’t lose money and we don’t lose money for our investors.
Right now we’re looking for apartment buildings, so if anyone has an apartment building they want to sell, preferably over 100, 200 units, but we’ll do smaller ones. If you are, please contact us. If you know anyone that has an apartment building or a house, I will provide a finder’s fee, $1,000 on houses. I’ll even, if it’s an apartment building and it’s a large apartment building, I’ll even go well above that. For houses, I’ll give you $1,000 if you give us a lead and everything’s always private and confidential. If that’s the case we’ll be more than happy to compensate you and thank you for that. I’m closing out on my one segment. I will be back shortly. Thank you very much.
Joseph J. Zoppi:
Welcome back to the Templar Real Estate talk show. My name is Joseph J. Zoppi, managing partner of Templar Real Estate Enterprises. In my last segment I was talking about individuals’ opinions, especially when you look at it online or in news print and that individuals have a storyline that they want to perpetuate or state, so the story’s going to be slanted in that direction. I’m just, again, warning people to understand the pros and cons of everything. Same thing I said with the market going up, just to be wary of it. One of the things about real estate I like is it’s a hard asset. It’s a lot, it’s tangible, it’s something you can touch. Since investigator in real estate there’s just so much more comfort in knowing you can see something, you can touch it, it’s a lot more tangible. You don’t know what’s going on with some of these companies.
There was a company in Germany, they just found out they’re short $2B and they’re not sure where it went, so they weren’t able to make certain payments. Either loans are going to be called or basically they’re going to be bankrupt. Those individuals that own the stock, they’re going to lose the money. Same thing with Hertz. Hertz, about a month and a half ago, month ago, was trading at $0.56 and then individuals were speculating, they were jumping in on it and it went up to, I don’t know, it was close to $4 or something like that. Then, it’s come down, it was down to $1.56, a buck and change. You have a company that’s basically bankrupt, they can’t make their payments and what they did is they wanted to issue more stock and then, the SEC looked at their plan and said no, we don’t like it. As a result of it they were going to ask people to put more money into a bankrupt company. A lot of people might have said you know what maybe I can take the risk, I’m up from $0.56 and maybe I’ll put more money into it, it’s going to go up. I really, really frown upon that.
Way back when, I was going to do the same thing, so long time ago I was looking at K-Mart. They had a lot of problems and then they were going to issue new stock. I was like well, this sounds pretty good. I didn’t execute the trades I wanted to and then I find out later that if I did I would have been just throwing money away because again the stock holder, especially the common stock, is the last one. You have your creditors and everything else like that. Some of these individuals that craft these different financial scenarios, they make the money and no one else does. Please be wary of that and any of these things that went on.
There’s a thing in the market they’re calling what’s called zombie companies in the zombie market. What’s a Zombie? So, zombie is something that’s dead like a person that’s dead, but it’s still living even though it’s dead or it comes back to life even though it’s technically dead. What they’re saying is that some of these companies have extremely high debt. The government is helping prop up these companies, which make them basically zombie companies. They’re basically insolvent or close to that and there’s money continually being pumped into these companies to prop them up and keep them alive. People are no wiser and they purchase stock in it and they can really get hurt. Same thing as with the market. As I said the market continues to go up. The valuation of the market is near where it was in February when everything was doing great.
You have to think about it. You have an economy that was shut down, a number of businesses that were just completely shut down like the auto industry for the most part, just a lot of companies. The valuations overall are at and above where they were in February. Just some common sense there. They’re saying basically and some of these high net worth individuals are saying this is basically a zombie market because The Fed is pushing so much money into people’s pockets and into the market that it continues to rise even though it shouldn’t be. That’s more than my two cents. I’ve spent a lot of time on this, but I thought it was very, very important for everyone to understand it and realize that’s what you’re dealing with, with the market. I’m not saying that you shouldn’t invest in the market. I personally am very bullish on real estate but diversify and to be in the market’s fine. If you have some large companies like Amazon and Google, things like that, those are solid companies. Again, it depends where you buy in and there’s going to be a downturn on that, as well, especially if the market comes down hard whenever that will be. You’re going to take a big bath. Just something to be wary of. I prefer the hard, tangible assets like real estate. Some people like gold, I’m into real estate.
Another thing I’d like to talk about, I saw this week a single one-bedroom condo in an affluent area in Burgeon County. The individual’s selling it and he wanted super top dollar for it. He didn’t want to pay real estate commission. He just did not want to do anything. He just wanted top, top, top dollar. His mom passed away, but he said that he thinks he can sell it. I spoke to him about a couple of different scenarios as a cash offer or for us to list it as an agent and he didn’t want that. I told him there was a couple of drawbacks with it. I’m honest with him. First of all it’s a single bedroom condo. Normally single bedrooms are very hard to market, they just are. A lot of people want a second bedroom for a study or something like that, or if they have a kid, especially nowadays.
With the pandemic more individuals are starting to work from home. As a result of that a two-bedroom apartment or condo, townhome, whatever the case may be is in more demand, especially now than a single bedroom whether it’s an apartment or condo. Now, in certain areas you could still get away with a single bedroom. Blue collar neighborhoods definitely the case, but if you’re talking about a high priced area where there’s an individual that’s going to spend a lot of money and they’re a professional, their job lends itself, for the most part, a professional to working from home as opposed to maybe a blue collar plumber, a police officer, construction worker, so on so forth. Again, it’s not as marketable. That’s what you’ve got to look at. You can’t force the issue of real estate to be something it’s not. You have to understand it and you have to market it and sell it based on that price. You can’t just will it to be more expensive. It just won’t sell. Also, the carrying costs with it.
So, this individual’s going to be paying high taxes plus for the condo it was $400. By the time it was over he was spending over $1,000 a month just holding the townhome. His mom passed away last year in November, so he’s already spent $8,000 or whatever the case may be on that and he’s going to continue to rack up expenses until he sells it, but he wants to sell it top dollar and he says he’ll put it on Craigslist. Okay. The traction he’s going to get on that, it’s not that much and that’s why listing it with an agent is always good because you’re going to get the ML, traction from the MLS, an individual’s going to look at it and see it on Zillow, and agents are going to see it on the MLS, which is great. Another thing that we did this week is I’m right now in the process of selling one of our houses that we were going to rehab, but we decided not to. I have an investor that wants it. I was going out there, so he had to get a tank sweep done, which is where someone goes throughout the property and walks to make sure there’s no hidden underground oil tanks, which could be an environmental issue if they’re old and abandoned, and not decommissioned correctly.
I was there and there was some bushes and kind of trees maybe that were cut down. They were a few inches think. It wasn’t huge trees, but they were piled up. The gentleman had to scan that area and he says well, I can’t scan it. I said there’s no big deal, I’ll just move them. I was moving them. I was having problems with the one specifically and I pick up on certain things. He goes oh you’re not going to be able to do it. I says no, I’ll do it. When I hear immediately you can’t do it or – that just hits my nerve because I’m never into the can’t do something, it’s always how to do it. So, when I was pulling on it he says you’re not going to be able to move it. I just moved a little bit and moved in a different direction and I was able to pull it. That’s the thing, individuals are always saying what you can’t do and in our organization it’s not what we can’t do, it’s like how to do it. If you’re in the mindset of can’t doing something, you’re already not going to be able to do it. I don’t know why, I’ve just always been in the mindset how to do it, just how to do it, not how you can’t do something. As a result of that your mind thinks differently and you try to problem solve. It’s always worked for us and I still instill that upon our entire staff. If I have someone that’s in that mindset where you can’t do something, that’s really a challenge. When I hire, I hire the can-do attitude, not the can’t do. So, that’s very important.
The other thing that we’re going to see a trend towards a lot of people are moving out of Jersey and out of New York. I’ve said this before, into Florida. As a result of the pandemic more and more people are flying and traveling as fast as they could to Florida. Florida’s seen an extremely large increase in the number of sales this past month. That’s because everything’s opening back up, but also individuals wanting leave from New York City, the want to leave New Jersey. I have an individual that called me the other day, she’s down in Florida. She has a house in Toms River. She said I don’t want the house anymore, I want to stay down here. I’m seeing it and hearing it more and more. It’s going to impact New Jersey and New York City a lot. In New York City commercial real estate is going to get hit hard in the coming year. Businesses don’t want to be in New York City anymore. They could work from home and it’s going to cost less money. I think we’re going to, there’s going to be big changes, especially in New York City with commercial real estate and real estate in general. I’ve got to go. Thank you very much for everything. If you need anything, please give me a call. If you know of any apartment buildings I’d love to buy them, houses we’d love to buy, we’d love to help you out in any way possible even if we’re not going to provide a service, just to help you out, we’d love to do it. Again, my name is Joseph J. Zoppi. Thank you very much.
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.
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