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 25, 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.
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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, a real estate investor, consumer advocate, author and managing partner of Templar Real Estate Enterprises. You can reach us at TemplarCashForHouses.com. That’s TemplarCashForHouses.com or you could call us at 973-240-8593. Again, that’s 973-240-8593. We could answer questions you may have, you can email us from our website as well. We could go for any type of questions you have that deal with real estate and real estate investing, so I strongly encourage it. We don’t charge for it, it’s just a service that we like to provide, and it’s important to us that everybody knows as much as possible about real estate, so it’s very, very near and dear to our heart.
My company is a real estate investment term. 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 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, very protective of our money and our investors’ money. I’m not a real estate agent, but I have individuals on staff that are real estate agents, so if you want to list a house through the Multiple Listing Service and follow the traditional way, we do that as well. We’re not a brokerage but again, we have agents on staff that could sell your house.
The show will go over everything there is about real estate and those things that impact real estate. We’ll talk about our rehabs, we’ll talk about our investments, we’ll talk about things that went well and those that did not go well, and what we learned from it, we’ll talk about the economy interest rates, we’ll discuss trends in the real estate market. Real estate is your biggest investment, 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 an opinion. I ask everyone to do their own research for whatever they need to do especially from a financial perspective. You really need to look at the information from a balanced perspective. Even if you’re in the stock market and you have a financial advisor, those things as well, you really need to own part of it and understand it. I know sometimes it’s very difficult, especially with all the information out there, I continually preach on knowing the author that wrote the article and what their slant is in terms of if they want to provide a certain point of view, they’re going to put that story towards that slant. That doesn’t mean it’s accurate, it just means that’s what they’re selling and that’s what the editor wants, so on and so forth, so it is somewhat difficult and especially if you don’t know something or you know it a little bit and you’re not sure which way to go with it, even financial advisors, so if you look at and you think about a standard bell shaped curve and you have, whatever the case may be, you have between A students to D students, the majority with the bell shape is going to be in the average area and that’s just the way it is with anything. Also with financial advisors, so you’re going to have a lot of average financial advisors and then you’re going to have some that are very, very good, and then some on the other side that are really bad, so that’s difficult to try to figure out who’s a good financial advisor, who’s a good CPA, so on and so forth. So it is very, very difficult. Recommendations really help and I always encourage that, and we do the same thing but even with recommendations, they only go so far, so it is a difficult point and it is difficult to figure who you have on the team that’s a winner and who you don’t, and we experience the same thing when we’re dealing with contractors and we need additional contractors. We get a lot of lemons as well and there’s just a lot of lemons out there, so it doesn’t really matter if it’s a contractor, a financial advisor, CPA, attorney, so on and so forth, you got to do your homework and then a little bit of praying that you will get an individual that is good.
Also, we’ve been having, as always, private discussions with individuals that are potentially going to lose their house. We’ve made some recommendations, we continue to do that. Sometimes, we’re able to help, sometimes, they’re right on point in terms of everything they’ve looked at and where they’re at. We’ve also been continuing to buy houses for cash for those individuals that need to sell immediately or just tired of the house because of bills or some other situation.
And lastly, we’ve been talking to a lot of individuals that want to invest in real estate passively. Remember, passively is one where you’re not in the day-to-day work of the real estate. It’s more of loaning out the money and then getting a certain rate of return based on an agreed upon percentage.
One of the things that we continue to look for and please give me a call on is apartment buildings, we’re always looking for apartment buildings for investments. Preferably, 100-plus units but we do go down from there to smaller ones, but we do like anything 100-plus units, that’s really where we favor it. Doesn’t matter if it’s in Jersey or in Ohio, or wherever the case may be, we just look nationally for that. In terms of buying and selling houses, it’s really limited to New Jersey for now. We’re eventually going to be expanding, probably into Pennsylvania, but right now, it’s just New Jersey.
So a couple things that we’re going to talk about today are the MLS service and selling houses through the MLS service that we do. So contractor problems I had last week, because I did not record last week, we had a number of challenges and being managing partner, usually all the problems eventually pick up or follow up to me, so that’s usually my job, is to handle problems and I provide guidance and strategy but a lot of times, the problems do bubble up to me eventually for suggestions and things like that in terms of what approach to take, but yeah, last week was a really rough week for me. We’ll talk also a little bit about my son and how he’s jumped into my business and he’s done that for a while, so we’re going to talk a little bit about that. And lastly, I’m going to talk a little bit about the economy and something that I don’t like to talk about and that is politics. I hate politics but I just, I have a couple of opinions, oh, it seems that everyone has an opinion on politics and they push it into everything, so I don’t want to be like that but I’m just concerned about a few things and just bringing that to your attention as well.
So another thing is, is that I had put out an article back in March – probably April, April timeframe and it was finally published. Unfortunately, it’s a little dated, so I was a little miffed at that because it has some predictions in there and at the time, it was accurate but as the spring purchasing progressed, things picked up considerably, so for the short term, some of the predictions were accurate at that time. Long-term predictions that I have in the article are, I think, spot on. It was written by a company or I submitted it to dailyproperties.com and it’s called the Housing Market Short and Long-Term Predictions, so the short-term are accurate at that particular time. The long-term, I think, are definitely accurate. We are seeing a lot of houses flying off the shelf, as they might say, they’re closing very quickly. That’s a good thing and I encourage people, if you’re going to sell, please sell now. We’re pushing hard on all our properties to sell as quickly as possible because the market is still hot and it continues to be hot, but with that being said is we do not know towards the end of the year how things will progress with the economy, we just don’t know. In addition to once the election is over, where that’s going to go, so that’s something that I would encourage people, that if you’re really on the fence, just get off the fence and sell and be in a cash position, or whatever the case may be, move to your next house because I think there’s a lot of headwinds in terms of the economy, in terms of everything going on with COVID, everybody says, well, once COVID, a vaccine is found, things are going to be all better and so on and so forth, and I don’t know if that’s necessarily the case. Some of these companies have been hit really, really hard, so I have an individual, very close friend of mine in IT, and that was my former background, so I know him really well, he’s a very close friend of mine, he’s a senior vice president in a company and when this hit, they estimated their business would drop about 20% and that was over, because they’re international, they’re in France and a number of other countries, and they said it’s going to be about 20% hit and when their quarter came in, it was first quarter, I say first or second quarter, the second quarter and they estimated 20% and they hit it right on the market. They were down 20%. Since that time, they’ve been up hitting the numbers they expect but they are expecting by the end of the year again, they’ll be down 20%, and 20% is a lot, and that’s just one industry and they handle everything from medical, hospitals, the gamut – telcom, just the gamut of different companies from retail, and holistically, they see it down 20%, so some are up and some are down even further, so their average now, comes to 20%, so you got to think about that in terms of the overall economy and how that’s going to affect going forward. There’s a lot of money in the economy through the government and a lot of stimulus but even with that, we continue to pump money in, but at some point, it’s going to catch up no matter what and I think we’re going to be in a recession and that’s something we’re looking at and we’re concerned about, so that’s something that everybody should be thinking about from their financial ability and saving money, and that’s very, very important just to have enough in case a storm comes which I think it will. We’ve been in a strong bull market for a long time and we’ve had to dip because of COVID but I think it’s going to continue that way.
So I’d like to close out this segment and I’ll be back shortly. Thank you very much, bye.
Joseph:
Hello, welcome back to the Templar Real Estate Talkshow. My name is Joseph J. Zoppi, managing partner of Templar Real Estate Enterprises. You could reach us at TemplarCashForHouses.com, that’s TemplarCashForHouses.com, it’s one word, or you could call us at 973-240-8593.
So I was talking a little bit about how we’re nearing recession. I firmly believe that. The number of individuals that have had challenges paying their mortgage and with everything going on is just compounding it. I continue to look at some of the storefronts and there’s not that much business going on. I think it’s going to be really bad, I really do. It might not be, it depends how much money, again, they keep pumping into the economy and then to people’s pockets but in the end, it’s going to catch up and it could be scary, it could be really bad, so I’d always err on the side of caution and be conservative with certain things like that and make sure you save as much as possible, drop your credit card debt as quickly as possible and just hoard your money, and then just, we’ll see where it goes. That’s the thing, it’s just such an unknown, but I just can’t see it not affecting everyone, I just can’t.
So one of the things I like to talk about is selling your house. We talk always about I’ll buy your house for cash but there’s the other option and that’s for us to sell your house through the Multiple Listing Service with one of my realtors, and I’ve had numerous people always call me and say, “Joe, you know, I like the option where we could possibly sell the house through the Multiple Listing Service, just list it regularly or you’ll buy it from us,” and that’s the thing, so there’s a lot of different options that we could do. Because we are an investment firm, we do a lot with houses, with rehabs, and we are very good at that and we know the cost associated with certain things and we have really good pricing, so that does translate into us helping to sell your house, so there’s a few things we do. We have a great team that could list your house and show your house, so on and so forth, that’s the first part. The second part is that like a lot of agents, we’ll come in, take a look at certain things, make certain recommendations, but we do this every day in terms of marketing our own houses and we really know what it takes to market a house and what needs to be done for selling the house, and to maximize the amount of money you’re going to receive. Sometimes, you might need to fix up a couple things and then you might say, “Joe, I don’t know anyone that could fix it up,” or “It’s going to cost too much,” so on and so forth, so we have individuals either on staff or that we work with very, very closely that work in our houses. Some are handymen, some are just regular contractors, and they’re very good, and what we do is we come in, we can make some recommendations, you could use the individuals that we work with and there’s a couple things with that, is that I guarantee, you’re pretty close to guarantee that they’re going to deliver for you, because I work with them all the time, so I know what their strengths are and it’s not like something you have to go onto the Internet and find a plumber or you got to find electricians, so on and so forth. I already have these individuals, so we make some recommendation. We’ll say maybe paint this, do this, maybe a few minor things. Again, it depends on you willing to spend the money but to maximize your return, sometimes, it’s best that you do a couple things, and if you don’t, then that’s okay too but we’ll make those recommendations and in the end, you’re going to always benefit the most, so that’s one of the things that we bring to the table. The other thing is that after a certain period of time, if we can’t sell the house just because there are certain things that the public does not want or the buyers don’t want, then we could always buy the house out right, so you got those options and in the end, it works out really well and it’s very powerful. There’s really no one on the market that does that, they really don’t. Either they’ll sell your house or they’ll just buy your house. We do both, and we always try to maximize how much you’re going to get, so we always give you a couple of different options and I think that’s really important and you could feel comfortable about it. We have some individuals that they’re going to be moving so they need to sell, so we might list it on the MLS and if it gets to a certain point, then we’ll buy the house, and that’s a big burden off your shoulders, knowing that you will have the house sold no matter what, so that’s just something that we bring to the table and I think it’s extremely powerful.
Next thing I’d like to talk about is contractor problems, so we too have contractor problems and a lot of times, I go over some of the challenges we have and some of the problems we encounter. So because we do so many houses, we’ll always have some problems. No matter how tight we are in terms of the way we run, just statistically, we’ll have some problems. Sometimes, we’ll have problems with inspections or we might miss something. We had something where we always do a tank sweep to make sure there’s no buried oil tanks, we do one every single time. Well, the one time we did not do one and I’m not sure why, we just missed it, and just, we’re being honest here, and because of that, it was for us, when we sold the house and we were looking around and we said, we didn’t do a tank sweep on this, and as a result of that, we weren’t that concerned, we knew the property really well, but still, things like that sometimes happen. You just cannot not have problems and no matter how tight your operation is, it sometimes happens. And same thing is with contractors, so we have contractors we use all the time, I have one of my main contractors that does a lot of houses for us, just tons of houses, and over the last few weeks, he’s doing a number of houses for us and he also is trying to expand and he’s doing some properties for other individuals, and he was promising that certain things will get completed and I patiently, and my project manager patiently waited, and then one week turned into two weeks and then it was going into three weeks, and the house was like, 99% complete, there was a few things that needed to be done and I wanted to put it on the market. Like I said in the previous segment, try to push to have your property sold as quickly as possible. So right now, he was not working on a few of our properties and it was a little less than $2 million worth of properties that he’s not working on, so with that, I have carrying costs and those costs are insurance, property tax and paying my private investors, and all those things. And also again, I want them on the market, to sell them and get the cash coming in, and then when I went there to do a walk-through, there was a couple of things that he had missed and he missed a few things, it didn’t really matter, but in the back of my mind, it was, they’re not doing anything on my properties, I had put some new toilets in. I put new toilets in all our properties, and the toilet was a little bigger than it should’ve been for the bathroom size and it just proportionally wasn’t correct, so even though they were new toilets, I wanted them removed and put different toilets in, and originally at the time, he said, “Joe, where do you want these toilets?” And I said, “Oh, let’s put them in the basement.” He said, “You really want it there with the water?” He says, “You want to put it in the garage?” I said, “That’s a good idea,” and I get to the property with my property manager, and the toilets are on the floor. We have covered the floor, it’s done, we did the hardwood floors, they really looked beautiful, and there was paper on the floors to protect it as the contractors were walking on it and I come in and there’s two toilets, one upstairs, one downstairs and they’re just on the paper and the paper is wet and it was there for a couple days, and I was like, just shaking my head. And then, I looked at a few other things with the cabinets, and the shelves were not put up and some of the drawers were not put in correctly, and there was garbage outside that – he had taken a lot of bushes out because we’re putting up some fencing, and that was there for about three weeks and it was just one thing after another, and I just, I lost it, and I have millions of dollars of property that nothing has been worked on, there was things that were shortcuts taking and I just, I went crazy, and then he got upset and it just wasn’t good, it really was not good. And then, he was supposed to put some things in and he said, “You have someone else do it,” so it spiraled out of control really quickly, and I stepped back from it and I wanted to talk to him on it and I’m still very upset, and he said, “No, I don’t want to talk about it,” and I said okay, because I want to address the problem and I want to say what problem you have with me and what problem I have with you and that’s the way I do business. I just want to know and we’ll address it accordingly. I call it the Band-Aid approach, just rip it off, just do it and get it over with, but he said no, and then he thought about it and I thought about it because we have a great relationship and we’ve been doing this for three years together. We go out to dinner, I always take him out to dinner and the crew out and always give them bonuses, and I was very upset because I felt like he really wasn’t looking at our best interest and I’m always concerned about that. I’ve always provided some guidance to him in terms of growing his business and certain suggestions, so I just felt he wasn’t looking out for my best interest. So after we settled down, we talked things over, we still have a few things we have to go over but things are back to normal, but with any relationship, sometimes, you have a blowup and it doesn’t go well but that’s just working through it. Some individuals that are in this business, they have certain bonuses and penalties based on achieving certain goals, so if you finish it by a certain time, you get a bonus. If you extend it, then you get a penalty. I’m not too much into that, I just, I don’t like that approach and I’d rather just work it out as the project progresses, and that’s just me. I don’t want to be tied to something, I don’t want to really hold something over on someone else and say, “Well, I’m going to penalize you for this,” so I think if we’re both working together, it usually always works out for the best but again, you gotta have good contractors and the gentleman I have and his crews are really good. So it doesn’t matter who you are, you could still encounter problems like this.
So I’m going to have to close out my segment. Thank you very much for everything, God bless, take care, bye-bye.
The preceding program was paid for by Templar Real Estate. The views and opinions 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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