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 August 22, 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 Radio Show. My name is Joseph J. Zoppi, a real estate investor, consumer advocate, author, and managing partner of Templar Real Estate Enterprises. You could reach us at templarcashforhouses.com, that’s T-E-M-P-L-A-Rcashforhouses.com, that’s one word, or you could call us at 973-240-8593. Again, that’s 973-240-8593, and you could call us about any questions you may have about the show or things that we previously talked about on the show. We’d be more than happy to discuss it with you.
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 or gap funding. 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 or a broker, but I do have individuals on staff that are agents if you’re interested in selling through the traditional Multiple Listing Service.
The show is going to go over everything about real estate, those things that impact real estate, we’ll talk about our rehabs, some of our investments, what went well and what did not go well and how we corrected those issues. We’ll discuss trends in the real estate market and see how it impacts real estate. Real estate is one of your biggest investments, so it’s important that you know as much as possible about it.
This show is going to be based on real world things that we’ve done and we have been successful at. In addition, some of the stuff that we’re providing is just my opinion, so I always tell everyone to research, research, research. Make sure that you’re doing balanced research and not towards one slanted idea of belief. Always try to get the pros and cons on both sides, so you could balance it out. It’s very difficult at times and especially when you’re selecting professional individuals. Like I’ve said before, if you think about it, you have a traditional bell-shaped curve and the hump is where the majority stays, so if you’re getting an accountant, an attorney, whatever the case may be, a contractor, there’s a lot in that average area and there’s very, very few towards the high caliber and there’s also very few on the other side which are not that good. So it’s sometimes very difficult to select the individuals you want but it takes a lot of research and it takes a lot of asking questions. That’s very, very important.
And we had a situation where we switched over to a new accounting system and we brought on an individual that has a company that does bookkeeping, so we hired her and first, it was fine, and we had interviewed her, everything she was doing seemed fine, but we had some other complex transactions as well as closing out a number of houses we had and when she did it, she didn’t do it the way we wanted it done and we expected a lot more from her and to our surprise, that didn’t happen and she was defending herself saying, “Well, other real estate investors do not do it that way,” so on and so forth, and we’re very granular in terms of what we do and we know our numbers inside and out. Everything balanced out in terms of the way she did it but from a granularity and from a detailed perspective, it was not and she just kind of lumped everything into one bucket, so as a result of it, we can’t report on it, we can’t make good business decisions, and we take everything to the next level, so in terms of the way we market properties, the way we sell properties, the way we purchase properties, our investments, we look at everything from a very granular perspective because we want to know how much money we’re spending on a particular thing, how much our private money is, how much our costs associated with that. So we track everything so we can make sound business decisions and when we do it, we’re looking out close to a year in terms of where the money’s coming in, how it’s going out, and we’re able to track it really well, so we’re always really on point with that. So if we’re not getting that detail, then that’s an issue and we’re not going to be able to plan as well and not be as successful as well, and I think that’s one of the things that a lot of companies do not do well and because of that, there’s cash crunches, things like that because they’re not managing the inflows and outflows and taking a realistic approach to it.
I was talking to one of my friends, he’s an investor and this happens with everyone, and he was saying that he had a number of properties where he was collecting rent on it but it was negative cash flows. That happens sometimes and he had the properties for 10 years, and it was just sight unseen, he collect the money, the people did not move out, so he didn’t care much and then he was thinking about it later and he’s saying, “Joe, I’m sitting on $150,000 in equity and I’m losing $150 a month or $200,” and he says, “You know, I decided I’m just going to sell it,” and I was like, “Yeah, definitely,” and that’s the thing, is that you got to know your numbers and you got to do financially, what’s healthy for you. And a lot of people don’t always do that. They might have a property that they inherited and they’re spending money on insurance, they’re spending some money, probably, even though it might not be a lot on utilities, and then if there’s a loan, they’re giving away interest to the bank and you’re never going to get that back in addition to property taxes. So sometimes, it’s hard to sell those inherited properties and you need to get past some of those things and it’s difficult and sometimes, until you’re ready, it won’t happen, and that’s understandable, it really is, especially it’s a parent’s house and there’s a lot of memories associated with it. So letting go is very difficult and I’ve seen it numerous times, and like I said, it’s understandable that that happens. But I think once you get past that point where you’re in a good place, I think you need to act quick instead of just throwing the money away and saying, “Well, maybe if I keep it another year, it’s going to go up in price,” and it might and it might not. I’m very concerned and I’ve been talking about it for the last six months, my concern with this COVID and even a little before COVID, where the economy was going, and we have the stock market going up and there’s always that, everybody thinks when the stock market’s going up, the economy is good. That doesn’t always work that way.
So I was reading an article that said that, for Yelp, which is an app where you could get reviews for companies, so on and so forth, that 155,000 companies had closed down since COVID, 155,000, and of those that have closed down, 91,000 are not reopening, so they’re mostly small businesses but that’s very disturbing. There was an interview by someone that I love to listen to. His name is Mohamed El-Erian and he used to be President of PIMCO which is a bond company and he does a lot of advising on economy and he’s on a number of Board of Directors and so on and so forth, and he’s concerned about the disparity, so you have these large companies like Amazon and Apple taking off and making a lot of money, and then you have these small companies that are not and they’re having a lot of problems. So a lot of money is being thrown towards these big companies but the small companies can’t get the financing they need and there’s a big disparity as a result of that, and he’s very concerned about it. I’ve been talking about this, about the ripple effect, about these small companies, these restaurants, whatever the case may be that are having challenges, and he said that’s a big concern because both from a social perspective as well as from a financial perspective, it’s going to impact the economy and from a social perspective, obviously, people as well. You’re going to have these companies that are not going to open up again.
I had a friend that was talking to a gentleman where his daughter has two dance companies, one in Madison and I forget where the other company is and she’s closing both of them, and she used to pay, I think, $150 an our for a choreographer to work with the students, and she used to have 20 students at one time, so she was able to pay the $150 an hour for the choreographer and she’d still have money to pay herself and overhead, and so on and so forth. Now, she could only have six individuals dancing at one time, so she’s going to have to close both shops up, and it’s a real shame that that’s going to happen. And this is going to continue to happen. Like I said before, you’re having these companies that’s going to be impacted as it gets towards winter time. Now, when you have Christmas time, a lot of these small companies make their money around Christmas time, but parties, whether it’s parties or purchasing things in the mall, and so on and so forth, and what’s going to happen around Christmas time in the winter? So I really think that we’re going to have a big impact especially next year as a result of this and it’s a big concern of mine. The individuals that I’m working with, they think the same thing. So we’ll see where it goes but there has to be some additional money given to the small companies and it’s not really happening now to the extent that it should, so that is something I think that’s going to really impact us.
So what I’d like to talk about today is also a few other things about some of the challenge we’ve had with our rehabs, just little things and as well as some additional things we’re providing through the Multiple Listing Service and listing your house, and just general things that we’ve encountered in the last week in terms of what we’re seeing in the economy, as well as what we’re seeing with the real estate market.
So I’d like to close out now, so again, if you want to reach out to us, you could call us at 973-240-8593 or you could go on web through templarcashforhouses.com. Remember, if you need to sell your house fast for cash, please give us a call, we’d be more than happy to help you with it. So I’ll close out this segment and I’ll see you shortly.
Hello, welcome back to the Templar Real Estate Talk Show. My name is Joseph J. Zoppi, managing partner of Templar Real Estate Enterprises. You could give us a call at 973-240-8593 or you could get us on our website at templarcashforhouses.com and we’d be more than happy to help you in any way possible. If you go on our website, you’d be able to see different videos and testimonials we have of some of our clients and how much they are really happy with the service we provided, so please go on site for that.
There’s also the different charities that we do give to, so 10% of our net profit goes to different charities and we think that’s really important to us to give back, and we like to give back in multiple ways. One is through different charities that we like to sponsor. Second thing is just by helping individuals out just by providing information. Sometimes, just some simple information can help someone considerably, so that’s our mission, is really to help people. We just do it through real estate and also, we help people through providing sound investments for individuals that want to invest with us, so we are really pleased with the services we provide and the response we get from our clients, whether it’s a private investor, our private investors consist of anyone from police officers, state employees, doctors, the full gamut of individuals invest with us, so it’s just not individuals that have jobs like doctors and engineers, but just regular people and what we do is we work with them, if they have an IRA where they can invest that IRA funds with us and it’s backed by real estate, so it’s a hard asset which is great, and it will continue to go up in value as time progresses. That’s just the way it is with real estate and we all know that, and that’s why we like real estate so much.
So one of the things I’m going to talk about today is a couple of listings we had. We are helping individuals out that like our service, not only in terms of listing the property, but the individuals we have that are going to help them spruce up the property a little bit, do some light cosmetic work to the properties, some painting, things like that, so we can maximize how much they’re going to get, and we work with these individuals and they work on our property, so we know them really well. Sometimes, agents say, “Well, I know someone,” and so on and so forth, “I’ve used him a lot of times,” but there’s a difference between when you’re giving out someone’s name and they’re doing work for you, and just someone that you know and they provide good service, but we know these individuals and we stand by everything that they do, that’s just the relationships we have with them. So I think that’s something that adds a lot of credence to our message in terms of just even selling for the Multiple Listing Service.
On the flipside, we also buy your house for cash and you don’t need to worry about closing costs, you don’t need to be worrying about whether you’re going to get a certificate of occupancy, anything like that. We had one individual that he just got over cancer, he’s been cancer-free for the past three months, four months now, and they’re going through their savings and we came in there, we’re going to purchase the property, they’re going to get cash and it’s going to help them along and they’re going to start a new life down south where it seems like almost everyone is going, so you got a lot of the exodus from New York City going into Bergen County, Hudson County in New Jersey and as well as Connecticut, they are going, and on the flipside, a lot of people from Jersey are moving south, so we see a lot of that happening right now.
One of the things that I’ve talked about previously is that we have these properties, we fixed them up after we purchased them and they’re really nice properties. We do a lot of really nice things to them and after we get them under contract, the individual that’s buying the property will bring an inspector in and a lot of times, nine times out of 10, there’s just these little things that they have to put on a report and we’ve had a lot of our investor friends, we all joke about it, that they have to have thirtysomething items on that list to make it valid for them, and it’s kind of crazy, some of the stuff that comes back and what’s really funny is that the major things, so the things that are very obvious, they always miss all of the time and they have a checklist and they go through the checklist, and they are not just looking to look and that’s the difference. So we have this one house and they are talking about maybe a blemish on the wall, they are talking about a couple of things with the electrical sockets that are not exactly straightened, and just very, very, very minor things they missed, and we knew about this, we were going to fix this anyway, but the garage door has no lock on it and there is no way to secure it, and there’s no molding on the bottom or some molding, potentially, water could go into the garage because of that, and they missed a number of other items. They caught a couple which we knew about and we usually leave a number of items, we’ll say, “undone,” or that we have to correct just so they could find these items and put them on the report because if we don’t, then they’re going to be asking for other items that are just ridiculous for us to fix or even question us to fix it, so we usually have a few items out, a couple of them are like the drain plug, we also do, there was one door that was leading to the garage that they did catch that, it should be a fire door and it was not, and so they did catch some of the stuff but some of the stuff is just ridiculous. They saw a small leak which we did not catch for the sewer pipe but as a result of that small leak, they said that the sewer line should be checked. So the purchaser’s going to do that, the buyer’s going to do that but they’re going to spend a lot of money on that and there are no symptoms or anything that are leading to that. I’m not saying that you shouldn’t do it but again, that’s just more money and it’s just because of a small leak. I question whether they would’ve even stated anything previous to that.
We’re also going to replace a Bilko door, one of those metal hatches that goes down to the basement, so we knew about that but they didn’t catch that as an issue which we thought was pretty blaring. So as I’ve always said about quality and finding the right individual, just be a little wary of it, even if you have an agent that says that, “Oh, we always use that person,” again, question it and we use one individual, he’s always been very, very on point. We look at things differently than a home buyer would look, but we look at major things and we make sure that the major things are caught, and some of the minor ones, just so we know, but a lot of times, a first-time homebuyer, when they see some of these things, they get very worried about it, and it’s understandable, but sometimes, they are very dramatic, some of these inspectors and that’s a major pet peeve of mine.
Another thing we run into is that Bilko door that we are replacing, so getting that door has just been such a horrendous task. We’ve placed the order, it keeps getting postponed and we contacted the manufacturer, nobody’s picking up, we left messages, it’s just been one problem after another with that, and on top of it, we had a little bit of a leak from some of these storms that went through, so the water went into the basement. Now, it wasn’t a lot of water and it was just going through the Bilko door but it was still an issue and we still were very frustrated with it. One of the things that we did is we used these waterproof strips, vinyl strips in the basement, it looks really good and I highly recommend it because it’s very durable even towards water. But remember to get the waterproof type, not the water resistant type. Spend the extra money, it’s well worth it. You don’t want to spend money on a water resistant one and then eventually have issues with it. The waterproof one is really rocksolid and you could put a lot of water on it and you’re not really going to have any issues for the most part, so I highly recommend it. We always use that in our basements, and even on the main floor, we’ll use that sometimes, depending on the type of house it is and what needs to be done with it.
One of the other individuals that we do work with, some of our contractors and I have to be very pleased with the team we have and the work they do for us as well as some of our clients. They provide a great service and it’s a good testament to us and who we select as individuals and I think that’s really, really important. It really distinguishes us from other companies.
One of the things we do do is, when we say we are going to purchase a house, we purchase it. There’s never a time – I think there’s one or two times in the course of five years where I did not purchase a house and that had to do with some major structural issues that we uncovered and the seller didn’t want to budge on it. He knew about them, he didn’t tell us about it, which is fine, I don’t expect them always to, I would prefer it, but there were some major structural issues and we needed to change the price as a result of it after the inspection, but they didn’t want to do it. Now, afterwards, from what I’ve learned, they held out and then as a result of it, when they did sell it, it was for $30,000 less than what we were going to offer, so we were going to offer a very, very reasonable offer and we were going to take all those things into account but unfortunately, both sellers took a very hardball approach towards us, and then we just had to walk on ahead. That’s over five years, there were only two of them and one, I think, was $30,000, another one, I think it was about $20,000 that they settled for less. But we are a lot different than other companies in terms of that.
Sometimes, they put you under contract and then they try to find an investor to purchase the property. That’s what’s called wholesaling. We don’t do any wholesaling, we’ll purchase a property every single time. If we sell it afterwards to an investor, we might do it if we have too much on inventory, but that happens when all of a sudden, a lot of people signed and we are not going to turn anyone back if we put a contract together, so you could guarantee that if we put our name on a contract, we are delivering. And that’s a big thing when you need the money for medical issues or some other type of college issues or whatever the case may be, or you’re in the middle of a foreclosure and we say we are going to buy it. There is nothing worse than someone saying we are going to buy the house that’s in foreclosure, pre-foreclosure and all of a sudden, they don’t come through. That’s happened numerous times and that’s just not the way we do business.
So I’d like to thank everyone very much for listening and if you need anything, please give us a call. If you need to sell for cash, 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 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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