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 July 4, 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:
Hi, this is Joseph J. Zoppi and welcome to Templar Real Estate Radio Show. I’m a real estate investor, consumer advocate, author, and managing partner of Templar Real Estate Enterprises. I’m recording this from home like I have been for the last few months and as I said before, I’m getting more and more used to this and more comfortable with it and enjoying it a lot more. So, it becomes apparent that there are a lot of things that can be done from home, this being one of them. You know, a lot of white-collar jobs working on computers, things like that, you could obviously work from home. I think there’s a big shift as a result of that and I’m going to talk about that a little bit later in the show. Hopefully, I’ll be able to get to it. But yes, there’s just a big shift with this and it’s one of the good things that I guess came out of COVID, is the realization of certain things can be done at home.
You can reach us at templarcashforhouses.com that T-e-m-p-l-a-r cashforhouses.com or you could call us at 973-240-8593. Again, that’s 973-240-8593. We can answer any questions you may have, anything you’d like to have answered on the radio show. If you’re interested in selling your house, you want us to buy your house, anything, just please give us a call. My company is a real estate investment firm. We buy houses for cash. We close quickly. We purchase apartment buildings. We do joint ventures with 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 and we’re very protective of our money and our investors’ money.
I’m not a real estate agent, but I have individuals on staff that are agents and they can obviously list your property through the multiple listing service. When you’re selling your property through the traditional way, it’s best, especially now, if you put it on the Multiple Listing Service because you’re just going to get a lot more exposure. You could always list it just on Zillow, which is fine, but I would definitely be pushing to list it with the Multiple Listing Service with a realtor. That’s the way you’re going to get the most exposure and other agents are going to come and see your property on the Multiple Listing Service and then bring their clients, so I strongly recommend that.
This show will go over everything that is about real estate and those things that impact real estate. We’ll talk about rehabs, some of our investments, what went well with our rehabs and what did not go as well and what we learned from them. We will discuss trends in the economy, interest rates and where the real estate market is going. Real estate is one or your biggest investments, so it’s important that you know as much as possible about real estate. I’m going to provide you with my opinion, it’s only my opinion. I say every week, make sure you do your research and get a balanced view of what things are.
One of the challenges, I was thinking about this when I was reading a couple of articles the other day or the radio show and talking about having a balanced approach. And certain things it’s a lot easier to have a balanced view and you can make a decision. There are other ones that aren’t as easy, and maybe that’s all right with those types of things. Case in point, we have COVID-19, so there’s more stuff out there saying it’s one thing or it’s another thing. You have the World Health Organization saying one thing, you have Sweden saying that the World Health Organization is not interpreting the information correctly. So, it’s a challenge to know really what’s right and what’s wrong with that, that’s the biggest challenge.
But on other things it’s a little clearer and you know, that has to do with real estate being one of them. One of the things that I highly recommend is to again, understand where the individual that’s writing the article, where he’s leaning towards so you could, you could dissect it and determine if that’s really just something to sell a story. Case in point with the market, I thought it was going down. A lot of the big players and hedge fund individuals thought it was going down, it did not go down, it’s going up. One of the things is that some of these publications are saying that the amateur investors beaten out the pros and they’re touting all this stuff, but the pros of the pros for a reason. I always say that on any given day one hole I could play as good as Tiger Woods, but the 17 other holes, I cannot because I’m not a professional golfer. And that’s the difference between a professional and an amateur is consistency.
Anyone can play one hole or two holes as good as Tiger Woods. But the issue is, is the longevity and the consistency. That’s the deciding factor. Especially when the market is going up, whether it’s the stock market or real estate, what’s important to understand is when things are going up, everyone’s say expert, but that’s not a true expert. It’s when you have to understand the risk associated and if it’s going to go down and what you do, and how do you mitigate those risks. I work with an association with a number of investors throughout the country, there’s like 150 plus investors and we get together on a quarterly basis. I haven’t gotten together with them probably in six months now, but we stay in touch.
A number of them, you know, said basically that way back when before 2007, that they felt like they were the experts, nothing could go wrong. And then all of a sudden, the market crashed and they everything they had. They rebuilt it back up, but that’s the thing you don’t want to be there where you have to build it back up from scratch. You always have to look at risk. That’s one of the biggest things we look at when we do anything is risk. We’ll tell a prospective seller that these are the risks we’re seeing. They might not believe us sometimes, but we’re looking at it from a different perspective. That’s something that I encourage everyone to do, whatever they’re investing in.
One of the things I want to do is talk about anybody have any questions on saving their house, please give us a call. I really, really want to do that. Please give us a call. We could help you out.
Maybe you some creative ideas to keep your home. I want to discuss some of that also later on, but it’s really important. A home is to me is just so important for family and for kids and everything else. If you’re going to lose your house, it’s just very devastating. We also will purchase our home for cash quickly in the event that you do need to sell your house. Or you have a house that needs a lot of work, and you’re not going to be able to sell a traditionally, please give us a call.
The other thing is that we’re constantly looking for additional investors for a lot of our investments. If you’re interested in investing passively, please give me a call and we can talk about it in more detail. I’m going to be opening up a fund probably another month, month and a half in terms of loaning money to real estate investors. Right now, we do it, but this is going to be a more formal fund that we’re going to basically loan to different investors when they want to do rehabs and fix and flips things like that. So, if you’re interested in investing in that, please give me a call and we could talk about it.
The other thing I’m looking for is not only houses to buy, but also apartment buildings. I’m looking at 50 plus preferably 100 to 200 plus units, but I’ll definitely look at 50 plus units and anything associated with that. I’ll provide a finder’s fee with it for either single family houses or apartment buildings. So please give us a call and if we do purchase it, I’ll make sure you have your finder’s fee and you’ll be paid it.
So, I’d like to talk about a few things today. One of them has to do with some of the stuff we encountered this week in the process of installing a French drain. Because we’ve had problems with this one house in terms of water coming in, which I talked about last week, a little bit. Radon tests that have failed. Some remodeling if you’re interested in some of the things of where to buy certain things to make your rehab a little more economical. And some listings that we’ve had this week as well. Also, about some hoarder houses, I want to talk a little bit about that. Second homes, purchasing second homes, and then economy commercial real estate and the mortgage rates.
The first thing is we’ve been having this issue with this one house, we’ve done a lot of stuff on the outside for the foundation to try to stop the water from coming in, but it just continuing to leak into the basement. We have the house currently under contract, but we saw a little bit of water and the right thing to do is to put a French drain in, put a sump pump in. We told the buyers about that and they were very pleased that we’re forthright with them. That’s one of the things that we always want to be as forthright with any problem that we know of in a house. When we take over a house and purchase it, we look at all the issues with it and we try to correct it accordingly.
Sometimes we miss certain things and sometimes other things crop up during the rehab or even after the rehab, this being one of them is that all of a sudden this water just started coming in and it’s just all on the base of the foundation inside in the basement. It’s just been very frustrating, very frustrating. With that being said, we’re investing in putting in French drains probably two sump pumps Then coupled with this house, everything has been going wrong, we did a radon test when we purchased it or right before we purchased it. The rating was like 2.5 somewhere around there.
Then the buyers wanted radon test, which was good that they did that, and it was like 17, which is extremely high. And we’re like, where is the disparity? How did that happen? So, we’re requesting another, we’re not sure how within eight months’ time, something like that could change, we’re not sure which one is accurate, so we’re asking for another test to be done. We’re expect that we’re going to have to probably install a radon system and they cost the 1500 to maybe $2,000. It needs to be done from safety perspective we have to do it. It’s just a little frustrating because I would have addressed it earlier when we were doing the rehab instead of afterwards. And it’s a little frustrating that it was 2.5 and now it’s 17. So, I’m scratching my head, trying to figure out what the deal is.
Next thing is remodeling. If you’re remodeling your house, right now’s a good time, I guess, if you feel comfortable with your job and everything. Some of the things where we go is we shop a lot on Amazon. If you’re interested in just sprucing up the house, like with new faucets and lighting, things like that, new handles on cabinets, things like that, I would definitely, definitely look on Amazon or Wayfair. It’s wayfair.com, they have some really nice things there and they’re very reasonably priced. Now, a couple of things, we sometimes get faucets on Amazon and some of them are very, very reasonably priced. One thing you need to understand is if you talk to a plumber, they’re going to say those are lousy faucets. Some of them are, definitely are because they don’t have the brass fittings and those things that are inside the faucet.
The same thing with Home Depot, a lot of the Home Depot products are really truly lower end products. So if a plumber, they might install it, but there’s a caveat associated with it is that they might go a lot quicker than purchasing a higher end faucet that has all the brass fittings and it’ll lasts a lot longer, but you’re paying considerably more. So, you have to balance it out in terms of whether you’re going to do it, whether the plumper is going to do it. Maybe you don’t want to come back in four years or five years, that’s something to look at. But as a whole there’s a number of products where you could get them definitely online, you could save considerable money and they come quickly. Just again, make sure that you look at the return policy on any of those things, because you don’t want to get stuck with some of these things and you can’t return them.
The other thing that we had this week, we had a number of listings through the Multiple Listing Service, so a number of my agents have listed a number of houses. We had a nice, cute little house in Palisades Park. They called us up and we’re going to list it. It’s just, it’s a really cute house, it’s cozy, which means it’s small, but it’s really a nice-looking house. It’s two bedroom, one bath, so it’s a little small, but it’s got a beautiful backyard. It was good just talking to those individuals or those people. Sometimes you meet people and you just hit it off and you feel like I’d like to have them as friends. They to move down South to South Carolina and just get out of Dodge. They’ve been thinking about it for a while and now they’ve made the decision, especially with COVID. There’s a lot of people flocking from New York and New Jersey down to Florida, South Carolina and North Carolina, it’s, it’s going to continue. I’d like to close out this segment and I’ll be right back. 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. Well, my last segment, I didn’t realize went over as long as it did so this one’s going to have to be considerably shorter, so I apologize. One of the things that came up this week is that an individual reached out to me that’s a film producer. He was looking at working with me because I deal with a lot of different scenarios with individuals that are in trouble selling their house. He heard about me and he asked if I have any houses that are hoarder houses and he talked to me about him doing–I don’t know if it’s going to be a documentary or what, I’m not sure yet. And it has to do with individuals that are experiencing this and what it’s going to take to fix their home up and the human side of the challenges with a family member that’s going through this and to try to understand the challenges.
I’ve said before you never wake up one day and say, I want to be a hoarder and things like that. Or whatever the case may be, or you become a drug addict or dependent on drugs, you never wake up that way. But it happens, things happen like that all the time. It’s that human side of what people are going through. One of the things I find that’s very rewarding for my business is working with people to help them out. That’s probably the biggest thing that I enjoy just to help them and to service them. When individuals are going through this, where they’re letting their house pile up with trash or whatever the case may be, they’re going through a lot of pain and everyone, you have to be sensitive to that. I find it very rewarding to help these individuals out of these situations.
So, I’m asking if anyone is experiencing it personally, or they know of someone or a family member, and you’d like to work with me on this project, I’d love to talk to you. Please give us a call on that. Again, this human side is so important to me and this individual coming by and asking about this and talking about it, I think is really important for other people to understand what people are going through. And I think that’s really, really important. So, definitely please give us a call at 973-240-8593. If you know of anyone that’s going through this or family member or yourself, please give us a call again that’s 973-240-8593.
Next thing I like to talk a little bit about is second homes, vacation homes, and where’s the market with that. So right now, the primary single family residence is just very, very hot. And I’ve been saying that for the last few weeks and it continues. There’s hardly any inventory that’s on the market right now. That’s what dictates price, scarcity drives up price. Even though there’s a recession or we’re coming out of a recession, whatever the case may be, it really did not impact the real estate market like everyone thought it was. You had big banks really tightening up on underwriting requirements because they know where the housing market was going to go. And also, whether an individual was going to have a job a month from now, so there were multiple reasons for that. That hasn’t been the case, the real estate market has been very resilient in Jersey and all throughout the country for the most part.
One area that’s been hit a little more though, is vacation rentals or vacation houses or second houses. That’s where there’s some challenges. So down South there’s challenges because you have a number of individuals from the Northeast, they traveled down for their vacation homes or try to rent them out and they’re having challenges and it’s that simple. They might be putting them on the market now as result of that. So there might be a glut of that in the near future, maybe six months from now to a year from now, depending on what’s happening with this COVID and the second wave, or some people say we’re already in the second wave I read something about that, so who knows? The glut of second houses might hit the market, we’re not sure yet and no one knows.
One area which has really spiked is luxury housing for anything over a million plus there’s been a major uptick in terms of individuals that want it. So, you have high net worth individuals, individuals in tech or finance that are looking for second homes and they want something that’s drivable, but not too close to their house. Anything out in the Hamptons right now, there is nothing out there. So, a lot of individuals that would always go to the Hamptons, they buy out there, they rent out there and it’s not happening. So now people are moving more towards the North shore of Long Island, what they call the Gold Coast, that’s near the Sound and up there, the North coast of Long Island and they’re building and they’re buying their like a frenzy and it’s going to continue.
You have individuals from Manhattan, go in there. You have individuals flock into Greenwich, Connecticut for their second homes as well. Then you have other individuals throughout the country, in California they’re going to Palm Springs. But again, these are all very, very expensive homes. So they want to live where they’re living, but in the event of another pandemic or another something else that’s going to occur, they want their second house to be drivable, pretty close that they could get there, but not too close. There are a couple other areas that are growing, you have individuals in Wyoming or houses that were being built. Now that was a little further out and some people say, well, I’ll take a plane out there so on and so forth. But most of the time it’s fairly close to, uh, where they’re living right now.
A couple things with the second home market is that right now underwriting requirements are high. For second mortgages are for second houses the requirements are even higher. It’s always been that way, but now it’s even more challenging. So that’s one of the things that, if you’re interested in buying a second house, it’s going to be harder to qualify, so, cash is king all the time. Maybe you want to stay on the sidelines and see where the market goes with a second homes. Individuals that have these Airbnb homes that they’re renting out or having challenges as well because they have to go through all these sanitizing, that’s costing additional money and that’s costing additional time where they can’t just rent it out the next day. They might have to wait two or three days to clean the house so that that’s a burden and a challenge. So again, you might see all these houses coming on the market a lot quicker.
One of the questions, I had a magazine request some information on the secondary homes and it’s for builders, so we’ll see if I get it published. They interviewed me and these are some of the questions they had asked that I’m talking about right now. Some of the other things that you have to look out for is from an investment perspective. Right now, I would not be investing in a second home to rent it out or anything like that. And even for builders, if you’re going to build a house to build and then sell, again, it’s going to be in that million dollars plus area. So, the challenges with that is that you have to buy the land or knock down the house, whatever the case may be, you’re going to have to go through the permit process. Then you have to really track very closely material costs, labor costs. Labor right now is at a premium as well as there’s not a lot out there for construction.
That’s a challenge for any builder as well as rehabber like I am. It’s just hard to find labor right now and this is just such a challenge and the labor costs are so high. And even when you get someone they’re just not working as well as you’d want them to as hard as they should be working for the money. So, there’s a lot of headwinds and factors with building regularly, but now with everything going on, it’s still even more of a challenge. This has just exasperated at this COVID-19. So, if you’re a builder, just be wary of where are you going to be building, you’ve got to know the market really well. And if you don’t know the market that you’re comfortable with, then you have to go outside the market that’s going to add additional burden and challenges. So that that’s a caveat and something to really think about risk reward.
Again, when we talked about before risk analysis and what the impact will be. So, you really, really got to watch that. So, I have to close up on this segment, like I said, it was considerably shorter than the other ones. So, I’d like to thank everyone for listening to me. If you’re interested in selling your house, please give us a call. If you’re interested in investing with us, give us a call. If you just want to talk to us, give us a call. We’re here and myself or one of my staff will be talking to you again. Thank you very much. God bless and have a nice
Be sure to listen to the Podcast of the Templar Real Estate Talk Show. Find it now at templarbuyshouses.com.
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