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 September 12, 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 Talk 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 we could answer any questions you may have. You could email us from our website and we’ll try to bring up those topics while we’re on the air.
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. 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 an agent and we’re not a brokerage, but I have individuals on staff that are agents and that sell through the traditional Multiple Listing Service.
The show is going to go over everything there is about real estate, those things that impact real estate, we will talk about our rehabs and some of our investments, we’ll talk about what went well and what didn’t go as well. We’ll also discuss how we fixed those things. We’ll also talk about the economy and interest rates, we’ll discuss the trends in real estate market. Real estate is one of your biggest investments, so it is important that you know as much as possible about real estate.
As always, I always say that the show is based on my opinion and my experiences. You need to do research in anything that you do and make sure you do a lot of research. You need to get a balanced approach to anything that you do and in this world right now, it’s extremely hard to get anything that’s balanced. It’s just, it is, it’s like this COVID thing and everybody knows that. What is really the truth? No one does. They really don’t know, and with a lot of things now, there’s just so much noise in terms of just everything out there and it’s very hard to figure it out. Case in point, I worry about COVID. Having restaurants where you could go inside now, I’m not doing that, and I don’t know when I’ll do it. I might not just do until there’s a vaccine, to tell you the truth. I continue to eat outside and I enjoy that, and I don’t know, maybe in December, I’ll still be eating outside and there’s anything outside, but with that being said, I’m just not going inside because I’m just very concerned about that. But I don’t know what’s truth and what’s not anymore, especially with that.
You had, and I think I might’ve brought it up before, my son, he’s finishing up to become a nurse and he knows a lot of people throughout the country, and one of the things he said to me, he said, “Dad, when that ship pulled into New York City, afterwards, nobody was on the ship and they didn’t have anyone on there,” because he had someone, a friend that was on the ship and no one was on the ship and all they were talking about is the hospitals were overflowing, but they never sent anyone in one of the rescue ships, and also on Jacob Javits as well. He told me, and then I spoke to a friend of mine which is in IT, and he was servicing the Javits Center for telco, and he said, “Joe, it was always empty,” and there might’ve been a couple of beds, but literally, like two or three beds, but that was it, and it’s like, you don’t know what’s true. It’s like, I had a friend, she was telling me that her friend went to the doctor’s the other day and she always gets these sinus infections, but they had to put down that it was COVID and she says, “But I don’t have COVID,” and they says, “We understand, but we have to put that down.” She was furious about that, and I think she’s put in a complaint or something like that, but what is true? I know it’s deadly but who knows? And that’s what a lot of things that we have to research, it’s very difficult, so try to do your due diligence, especially in the real estate side, and if you ever need any questions, I will promise you, you call us, we will give you an unbiased feedback in terms of what things are. We will not, in good conscience, say something that’s not true. We will not. Mark my words on that, and I have a good story I’ll tell you later about that, but no, definitely not. But I’d like to say hello to Paulette that’s out there listening. Hello, Paulette, hopefully, everything is going great.
So again, we are having private discussions with individuals that want to sell their house fast and that need to sell their house fast for cash. We always give a good cash offer, as fair as possible, for that. If not, we are also listing a lot of houses lately just because the market is on a tear and for the most part, if you don’t need your house sold immediately, we have been pushing on just going through the traditional listing service and we are listing a lot of houses that way, and I know everything is going really well with that, and I strongly recommend that. But again, there are times where you might need cash immediately and we are here for you, there are certain things for medical issues, there are certain houses that will not sell on the Multiple Listing Service – they will not, and those houses, we buy all the time, so if you have one of those houses, please give us a call. If it’s a hoarder’s house or it needs a lot of work, please give us a call on that and we will be more than happy to help you with it.
We also are looking for apartment buildings, preferably larger ones, but we do smaller and multi-family housing, 10 units, 50 units, 40 units. If you know anyone, please give us a call, we provide finder’s fees all the time and they are fairly generous, and we’d love to just buy more apartment buildings. Like I said, we really prefer the larger ones but we will do anything in terms of purchasing apartment buildings or houses, okay?
Next thing. So we had, this week, an individual that called us, he wanted to sell his house for cash, so we went over, it was located in Essex County and we walked through it and he said to me, “Joe,” he says, “I don’t want to clean this house up. I’m up here from Florida, I just, the junk is in here, I just want to leave it. I don’t want to clean it out, I just want a cash offer on it,” and I looked at it and I said, “Okay, let me try to figure out some numbers. Let me try to work out also what you could get for it if we listed it on the Multiple Listing Service.” So it was a small cape, two beds, two baths, the upstairs was not done, so it was a walk-up attic, it was extremely dated. It’s a corner lot, but it was nice on the corner lot but unfortunately, there was no garage and the backyard was slipping down a lot, like you couldn’t really stay in the backyard beyond like an extreme incline or angle, so that, you couldn’t really use, but the property was nice. It was nicely manicured, but the inside was just a lot of clutter. So I called him up and I said basically that we could probably list it, I think that was his best option and if I buy it for cash, I’m going to make more money. I got more risk but I’m going to make more money, it’s just, that’s the way it is. There’s a lot more risk, but I said to him, “We probably, as is, $250,000,” and he had made it clear last time, “I don’t want to unclutter, I don’t want to move anything,” and so on and so forth, “I live down in Florida and I just don’t want to do it,” so I said, “Yeah, $250,000.” He said, “Well, I talked to an agent and he said $306,000.” I said, “Listen, I could list it for whatever you want, I could list it for $500,000 if you want, but I would probably list it below $306,000. I would be doing probably $290,000.” It’s just, there is a psychological thing that really is the case with that.
So on a side note, so when people are looking for houses, they do searches, sometimes, they do it on Zillow which is a big one and they’ll say, “I want something up to $300,000,” so those searches come up with certain criteria, the criteria is what you select, and then the results are the search. So if it was $306,000, that wouldn’t come up in the search criteria. If you price it a little below, and then you get a bidding war, well then, you’re going above it anyway, so I always recommend that, especially around those different price points, whether it’s $250,000, don’t list it at $255,000, list it at $250,000 or $249,000, or when it’s $300,000, just a little below, and so on and so forth. You’ll get more traction that way.
So when I’m speaking to the gentleman, he said to me, “Well,” he said, “$306,000.” I said, okay, so what I did is, I kept talking to him, I said, “We could basically clean out your house, have a crew that could do that at a very reasonable price,” and I went through it, it was X amount per hour. “They said it’s probably going to cost you $4,000, and with that, you’ll probably reap 10 times that for that effort, and you’re not going to be really expending the effort, so you would be able to get the $299,000 like I said.” I said, “I don’t think you’re getting $290,000 as it is or $306,000, or whatever number that is,” and after talking to him, he said to me, “Well, the agent says he wouldn’t list it anyway because of all this clutter,” so I’m like, exactly. “So he gives me a number of $306,000, but in the end, he said that he wouldn’t list it.” Yeah, he wouldn’t, but I would. I would still list it with the clutter at $250,000, and I think he would get someone.
But you gotta really know the market and you can’t just list in two individuals that say certain things, no matter if it’s an agent or not. There has to be that honesty there, and I hear a lot of these stories and it’s just, I don’t know, we just, we don’t do business that way.
I’m going to tell you another story when I return. I’m going to have a break in a minute but the same thing is that statements are put out and they are not accurate at all, and it kind of really infuriates me. With that being said, in talking to the individual, we are going to list the house and we are going to list it for $250,000, and he said he still might come back and still might want a cash offer on it, and I gave him a cash offer, and he did kind of like it, but he’s going to get a lot more money that way just if he lists it, so he’s thinking about it this weekend and we will see where it goes, but he likes the honesty that we are providing as well as the information and the transparency which is really important when you have an investment, whether it’s a quarter million, a half a million, whatever the case may be, you have money locked into the house and you need to maximize what your return is on it, but you need to know the pros and cons, and what you are truly going to get for it.
So with that being said, I’m going to close out this session and I will be back shortly.
Joseph J. Zoppi:
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 reach us at 973-240-85930, again, that’s 973-240-8593 or at templarcashforhouses.com. That’s T-E-M-P-L-A-Rcashforhouses.com. It’s one word. Remember, if you need to sell your house fast and you want a cash offer, please give us a call or we could list your property through the Multiple Listing Service. In addition, we do investments with other real estate investors or other individuals that have IRAs, 401(k)s, or some additional money that they have from an inheritance, we could partner together. Everybody that partners, we usually do it from a passive approach, so you are not actively involved in the rehab or the acquisition of the property, but you own a share of the property and we work out the deal with that with the attorneys. It’s all very much very transparent in terms of everything we do, so if you have any questions on that, please give us a call, we’d be more than happy to address any questions and provide the answers you need.
Right now, I had an individual that we had just sold a house, he went on the contract a couple of weeks ago and he went through inspections, so this individual originally called us a couple of months ago and he said, “Joe, I went to your website, I looked at who you were and I liked reading about who Templar is and who you are, the companies that you donate to, the nonprofit organizations, and I just liked your message.” What we did is we sat down, we talked and one of his concerns was that his wife and himself were very concerned about COVID and they did not want anyone to come into the house, so they wanted a cash offer, and I looked at the house and I said, “Paul, under this scenario, I think it would be best to list it in the Multiple Listing Service.” He explained in terms of what he would be able to get for it and he liked the numbers and he felt very comfortable with that, but his biggest thing was this COVID and he really did not want to list through the Multiple Listing Service. So what we did is we talked about it and he said, “Well, I have a broker that’s coming by and he has got 40 years of experience and he has all these connections with investors and they are going to come in and they are just going to purchase it real quick and you don’t have to worry about it.” I said, “You’re not going to get the numbers you want for this house based on your needs and where your mortgage is.” I said, “You’re not going to.” But I said, “Go through the process, don’t listen to me, I think it’s important to go through the process,” so we did do that and he came back to me a couple of weeks after, and he said, “Yeah, Joe, you were right. He said all these things but he wasn’t accurate, ” and I said, “Yeah.” He said, “Well, I might have one other person that might be buying it. I said okay. It was an investor and he gave me a great price.” I said, good. I said, “If you could do that and it meets your needs, that is perfect.” So a weekend passed and he said, “Yeah, I have someone.” We put a contract together and I said, “I wish you the best with that,” and which I truly do, and he called me a month after that or a couple of weeks later and said that the investor didn’t have the money and he couldn’t get the loan for it, so he was thinking about, again, putting it through some other means of selling it, and he said he spoke to another broker and they do virtual tours, no one has to come in, and he has all these connections with individuals, 200 people, and he has this database of all these individuals that want to purchase houses from him. I said to him, his name was Jim, I said, “Jim, it’s not going to happen that way. The virtual tours are not really working. Around March or April, they were, but since that time, everybody wants to go in a house, they just want to go into houses, and it’s just not going to work, and I said to him, “Ask for references. If he’s doing this, he should have references of all the individuals that he’s working successfully for.” So he wasn’t able to come up with those references, and the other thing is all these individuals that he has waiting for him to sell a house, it’s just a line, and it kind of infuriates me when I hear these things that an agent comes in and said, “I have a list of all these buyers.” They might have a number of individuals that they are representing, but they are not waiting for that person to put a house under contract, to list it, and just waiting for that. That’s just not the way it is. Individuals go on Zillow and they look for houses actively, and then they contact their agent and say, “I like that house, I want to go see it.” That’s the way it works.
Now, if an individual lists a house, they are going to obviously have however many people that they are representing will say, “Come and take a look at the house,” but that doesn’t mean that they’re going to buy it and they are looking at any house on the market, any broker or agent wants to sell a house, and in this competitive market with these houses, whatever one the individual likes, they’re going to go to and they’re going to put an offer if they like it. It’s not based on exclusivity or anything associated with that. So please understand that, it’s a misnomer, it’s inaccurate, it’s not correct, and like I said, that just gets me crazy when agents and brokers do do that. Now, not all agents and brokers do it, there are some really, really good ones out there, but it’s a very competitive market and they say these things to get the listing. It’s that simple. For us, we like to list houses, we like to buy houses for cash, but we do a lot of things. We do those things, we do investments, so we are not living or dying by a particular vertical, we’ll say, either the vertical would be buying houses for cash and rehabbing them, listing on the Multiple Listing Service, or buying investment properties and holding them, or holding them for passive income. So we do multiple things and we plan accordingly, so we are not a one-trick pony. We are very good at what we do but we are not a one-trick pony with that, so we don’t have to rely on one thing as opposed to the other.
The other thing that separates us in the end is that we are just very good at the things we do. We are conservative, so sometimes, we’ll give a conservative number when we’re going to see what you’re going to get for the house, but when we list the house, we will list it very competitively and see where it goes, and it’s not based on anything else. Basically, anytime you list a house, it’s based on supply, demand, and what that price point is. You will know it in the first one or two weeks how well it’s priced. It’s that simple, but with that being said, you do not want to overprice, and you just don’t. That’s extremely, extremely important. Now, if you price it right, you can get into a bidding war, definitely, and that’s where the price is going to go up but it’s always better to go that way then just to put it to high, even as good as the market is, you have to price it correctly. We have all the time, we see these houses that aren’t priced correctly and they sit, and it’s really just that simple.
Another thing I want to discuss is I saw an interview for her, and was a gentleman called John Burns, he’s a consulting company for real estate, he’s been doing consulting with real estate for a very long period of time, and one of the things that I saw on the interview is he was being interviewed and they asked him in March or April, “Where do you think the economy was going to go in housing and real estate?” and he said, “I thought it was going to be a severe depression,” and that’s what most people thought. Now, I hear some people now, they said, “No, I knew it was going to go up and I just knew it because I knew the government was going to jump in.” They might’ve guessed it but it wasn’t based on any really empirical evidence or anything else, any of the heavy hitters all believe that the market in real estate was going to go down. That’s why they pulled back on the requirements for loans, they tightened things up, these are all big players that are very, very smart, so they were very cautious and rightfully so.
So when I hear some of these individuals that say, “Oh, I knew it was going to go up,” again, that was maybe a guess and maybe they were just saying that, so again, always do your research on these things, and he was talking about a couple other things which are pretty interesting , so originally, a few months ago, the secondary market for housing, that’s like vacation homes, was kind of on the low side but that has picked up also, and I was interviewed two or three months ago and a number of individuals were saying the same thing about secondary markets and where the secondary markets were strong was in the high-end, that has since changed and also, those price points that are considerably lower are also taking off, which is a great thing, and that’s really good. Now, he also said that he interviewed, I guess he got interviewed or he had some information that he read about single-family rentals and he said that 17%, even though they are paying the rent, are out of work, so again, that’s going to impact those single-family rentals as well as regular rentals down the road. Right now, there is a moratorium on it until the end of the year, but still, the question is what’s going to happen after that? And as I had stated and I had seen and a lot of people have seen the migration from the city to the suburbs, and that’s a thing that’s going to continue to happen . The question is, some of the reasons why is COVID, I think some of the reasons also were some of the rioting that’s going on where people want to go where, it’s just more safe, will say, and a little more conservative in terms of not being in the city where there’s just a lot of upheaval, and you’re going to continue to see that migration.
Right now, inventory of empty units in New York City rose to 15,000 in August. That was the largest ever recorded since data started back 14 years ago, so that’s something that is a telltale sign of some problems and that’s going to continue and I think those numbers are going to continue to go up and they might go up probably next year with individuals that cannot pay their rent, so we’ll see, we’ll see where that goes. I think that’s very interesting and it’s a telltale sign of where the market is for cities and shirts going to be.
Well, I got a close up now, thank you very much for everything and take care. God bless, peace.
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.
END OF RECORDING