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 January 23, 2021
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 and we could answer any questions you may have, or you can email us from our website. If you want certain topics discussed on the show, we’d be more than happy to look into it, please email us or call us as well. Or again, if you have any questions, please call us.
For first-time listeners, 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 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 protective of our money and our investors’ money. I’m not a real estate agent and we’re not a brokerage but I have individuals on staff that are agents that could sell your house through the traditional Multiple Listing Service.
This show is going to do over everything there is about real estate and those things that impact real estate. We’ll talk about our rehabs, some of our investments, what went well, what did not go well, and especially how we overcame them. We’ll talk about the economy interest rates, we’ll discuss trends in the real estate market. Real estate is one of your biggest investments, so it’s important you know as much as possible about it.
I’m going to provide you with my opinion, it’s only my opinion. I ask everyone to do lots of research in anything they’re jumping into, make sure you look on the internet. I always say there’s a lot of noise on the internet. So you really got to understand the point of view of the author. You could also ask for friends and family in terms of references. But I always say also, make sure you ask lots of questions, because what might be good for someone else might not be good for you. So just ask lots and lots of questions and try to dissect it, everything from payments to the type of person it is, when they show up or how they show up. Are they on time? Whatever the case may be, are they responsive to emails, phone calls, so on and so forth. Whatever service you’re looking for delve into those things. It’s very important.
I want to say a shout out to a couple of my favorite listeners, Paulette, as well as William and Bonnie R. So hey, guys, how are you? You might hear me talk about private investing. Again, that’s individuals that want to invest in certain projects we have or deals we have, and then you get a rate of return. That rate of return will be at the end of a project or monthly income. So it depends on the type of project and how it’s organized and structured.
Another thing is that if you’re ever interested in investing in real estate passively, I always have different Zoom calls on that. So even if you don’t want to deal with me in terms of investing directly with me, you could definitely give me a call. We can set up a Zoom call, we can go over things. I want to make sure that you know as much as possible about real estate and make sure that you get into a good real estate deal. That’s probably the biggest thing that I’m always concerned about, is getting into a good real estate deal, no matter if it’s with Templar or someone else. Okay, so that’s extremely important, please do not be bashful. If someone comes to you with a deal and I’ll go over it with you. I’ll ask some questions and we’ll see. And it’s that simple. Okay, if you’re interested in selling your house fast for cash, please give me a call. We do that a lot. We also list houses on the Multiple Listing Service. So either way, we’re a full service investment company in terms of those things, as well as invested in real estate in terms of buy and hold. Buy and hold is apartment buildings, things like that. So please, do not be bashful, give us a call, we’ll talk about it and we’ll see where it goes from there.
Also, another thing is that if you know of someone that’s selling a house or wants to sell a house, please give us a call, we’ll give you a referral fee. We’re always discreet with everything. If you know someone that wants to sell their house fast for cash, please give us a call. Or if you know of some investment, real estate, anything preferably over 100 units but I’ll do smaller, we’ll do 45-50 units, and we’d be more than happy to tackle it. And like I said, we’ll give you a very fair referral fee as a result of that.
So I’m going to talk about a couple things today, the first thing is the stock market. Even though that has nothing to do with real estate, I still like to talk about it and how sometimes it leads certain things and real estate leads with it, it really depends. Somehow that’s how the economy’s going, it depends. Sometimes the market is going very strong but there’s underlying issues with the economy, which is what I believe. And we could talk about it on another show, but right now, I want to talk a little bit about the stock market, because it’s very important that I want to make sure that all my listeners are very savvy and very cognizant of the market and where it is, what it could do, so on and so forth. I hate to see anyone lose money no matter what it is. And a lot of people are in the market right now, which is good.
I’m always very adverse to the market just because of past experience even when I’ve done well. You could lose it very quickly if you’re not cautious. Now, my later years, I’ve learned as a result of what to do not to lose money as much when I did lose money. But with that being said, you still got to be very, very cautious. And that’s one of the things that I did not particularly care for the market as much. You don’t have that control on that tangible asset like real estate.
So a few things, if people are trading on margin; so margin is when a brokerage firm, where you’re buying your stock, provides a loan, and you can purchase more stock as a result of that, which is good. So when the markets going up, it’s great because you can almost double what you currently have based on your current cash investment. But on the flip side, you could lose it twice as fast. And that’s something to be really wary about, is to trade on margin whether it’s options or stocks or anything else like that. So really, really, really be careful with margin, because the worst thing you want is a margin call. A margin calls basically the brokerage is saying you got to sell your stock because you’ve lost so much money. And I could go into more detail the true definition of a margin call but again, it’s not something you really want to happen. It’s a bad situation. And I’m going to tell you, I’ve had that situation. So it’s as simple as that. I know it well. It’s from past experience. So please, make sure you watch it.
Second of all, make sure you put stop losses on your stocks, as well as your mutual funds or anything else that you’re investing in. Stop losses is where if you lose X percentage or a particular number, the stock or the mutual fund will be sold. Okay? Mutual funds though, even though you’ve reduced, if come down to a certain point, it cannot be sold till the end of the day, whereas stocks can be sold at any time during the course of the day. So that’s one thing that’s different. The other thing is dependent on the type of stop loss, you got to be very, very careful. So talk to your brokerage about that because if you set up a certain type of stop loss, it could go past that and it won’t sell. So be very, very careful, that’s usually when the stock is dropping very quickly, okay. It’s only under certain circumstances, okay. Let me be clear about that. But you want to make sure that you put the proper stop loss in. Okay.
Another thing is that E*TRADE, E*TRADE had a survey the other day, and it was of millionaires, so a million plus assets in terms of stock market. And only 9% of the millionaires surveyed said that the market was nowhere near a bubble, okay. Most people are thinking it isn’t a bubble are very close to a bubble. But again, a bubble could last a long time. So, it might not pop tomorrow, it might not pop for a month, but eventually it’s going to pop, okay. 16% said that we’re fully in a bubble, 46% said we’re in somewhat of a bubble, and 29% think the market is approaching a bubble. I personally think we’re in somewhat of a bubble, so I’m near the 46%. The other thing is that, again, with the stock market, now, stock market could drop 25% easily.
Now, last year, stock market dropped and it rebounded. I’m not guaranteeing that the stock market, if it drops again, it’s going to rebound. I’ll make it very, very, very clear to that, so be wary of that. And I used an example last year, I’m going to use the same example or pretty close to the same example this year. So say you have $50,000 in year one, you invest in the stock market, and you have a 20% gain. So now you’re at $60,000, that’s year two. Next year, again, 20%, now you’re up to $72,000, things are going great. And now you have another 20% increase, you’re doing really good, so it’s $86,400. And year five, again, you have another 20% increase in stock, now you’re at $103,680. Think about that, $103,000. Stock market takes a correction, a big correction, which is possible, definitely possible, and it takes a 25% hit. Well, that $103,000 and change will be at $77,000, almost $78,000 with a 25% reduction in the stock market. 25% is definitely doable. It could be a lot further than that but 25% is definitely doable.
So, again, you could have three or four years, five years of great returns, and you could erase it very quickly. So a lot of times they show you statistics about the stock market, and it’s X percentage over 30 years, we’ll say. You could look it up on the internet, very, very easy. The question is not that. The question is that when you have to pull the money out of the market based on retirements and things like that, are you at the peak or you’re at the bottom for that go around? And that’s the question. And that’s why I like real estate, and the way we do it is it’s just consistent returns. And in the end, I think, you know the tortoise wins out over the hare.
So I’m going to close out this segment. I’m going to talk about a couple other things, a little pet peeve of mine that’s occurred this past week and then kind of continues always but I’ll talk about it. And we’ll see where that is. Okay? Thank you very much. But again, if you have to call us, please call us at 973-240-8593, again, 973-240-8593. Thank you very much and I’ll see you 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 973-240-8593, again, that’s 973-240-8593 or you could reach us also at templarcashforhouses.com, that’s T-E-M-P-L-A-Rcashforhouses.com, that’s one word.
Remember, again, if you need to sell your house fast for cash, please give us a call or through the traditional Multiple Listing Service, we’d be more than happy to talk to you about that.
So before, I have said, when we’re closing out in the last segment about a pet peeve of mine, and it’s always a pet peeve of mine. I’ll talk about it right now. And I’ve said it before and I don’t mean to be negative about it, but I’m very conscious and always concerned about clients and making sure that they’re represented correctly and they have the best representation. And for us, it’s real estate. So I had a situation, an unfortunate situation, where I have a house, I have a tenant in it, and the tenant is not paying at all. I offered him money to get out of the house, I’ve let things go. And my partners were a little upset that I continued just to give him the benefit of doubt and I didn’t even push for any compensation or payments. I know he’s making money and I know it’s coming in, because I know him through lots of conversations. And it’s come to a point where I got to do something, I just have to. He hasn’t paid in six, seven months. And again, I know he has money for it and he’s just not paying. I sent him a letter through an attorney and I gave him a bunch of options. I even asked him, “I’ll give you money to move out.” And he never responded. I’ve texted him and I’ve never been hostile or anything else. You know, I’ve used the words “I beg you, I’ll be more than happy to help you any way possible” and he’s not doing it.
Now, my partners think and they probably might be right that they knew or he knows the type of individual I am, that I’ll give the benefit of the doubt, give the benefit of the doubt a lot, especially if I have some type of relationship with that person. I’m not as nice when I don’t know you and there is a situation. I’ll take a stronger hard line on that. But with the people that I have a connection with, I’m very, very forgiving and I want to make sure that I do everything possible to help that person. And unfortunately, the person is not being cooperative at all, after letter sent or anything like that.
So, right now the person’s in the house and I’m going to sell it. And as a result of that, we had to put certain things in the Multiple Listing, saying there’s a tenant in there, it’s uncooperative, so on and so forth. And we said that the individual needs to, the buyer needs to remove the tenant. So I’ve gotten numerous calls, numerous calls. Let me backtrack for a second. So, you’ve been listening to me on and off maybe for a year now since I’ve been on the show, and I believe that a number of you or a lot of you or most of you know more than some of these agents. So I’ll put it at that, just by listening to me. So let me set that ground right there in terms of that. I have individuals calling me stating that — I had one individual will say, he said to me, “Well, isn’t it up to you and the sheriff to get the individual out?” And again, this is an agent. They’re in the field so I expect them to know their craft and be knowledgeable. Well, there’s a moratorium on evictions, there was a moratorium push till last year, it was December and then they extended it to March. Now it’s extended again till September. So I said to them, “Well, there’s a little thing called COVID.” And he’s like, “Oh, okay.” So again, that individual did not know about the moratorium or anything about it. And I’ve had these discussions five or six times with individuals, that real estate agent that don’t know there’s a moratorium on evictions. And it’s very, very frustrating because I think about it and I say these individuals are representing other people. And these people are saying, “Okay, I have a professional representing me.” And these people, they don’t know what’s going on. Whether they deal with tenants or not, is not the issue. The issue is you need to be reading and keeping up on what’s going on in the real estate industry, and people are not doing that. And it just incenses me that I get calls like this, and no one knows or a number of people don’t know what’s going on.
So one of the things that I was talking to these agents about is that right now, the house is owned by one of our companies, it’s an LLC, Limited Liability Company. And each property that we have is usually in its own LLC for asset protection. So for an individual to purchase the property, they’re going to have to go through title insurance, they’re going to have to try to attempt to get a CO, and a number of other things. So with the gentleman in the house, the CO process might be very difficult and it’s going to be a difficult situation. First thing is I priced it appropriately for the angst that the person that purchased this property will have to go through. I priced it perfectly, I really did. I’m going to still make a nice dollar on it even with that, but I made sure I discounted it appropriately.
So what I suggest a lot of the agents in terms of providing it to their clients is that it would be called an LLC buyout or LLC purchase or whatever the case may be. So basically, the company owns the asset, the company owns the property. So basically you sell the company and basically you’re taking over the property, which is owned by the company. So they don’t have to go through any title insurance, they don’t have to go through really closing costs for the most part, they don’t have to go through a CO process, and these are all legal, it’s just it’s an asset owned by a company and the company sold to someone else. Pretty standard, it’s not always done but it’s done sometimes. Number of agents, oh, I like that idea. I like that idea. Yes, that would probably be the best approach, yes, definitely.
I was so enamored and happy that when I spoke to one agent, she was like, “That is exactly what should be done.” We we’re talking and she said that she used to do a lot of mergers and acquisitions and she used to work for Citi Group. And one of the things they used to do for the mergers and acquisitions, when they were purchasing something, they would look at it two ways. They would look at it as purchasing the asset or purchasing the company that owns the asset. And depending on certain criteria and tax benefits, so on and so forth, they would determine which way they wanted to go. And she said to me, “Joe, that is the exact approach you should be doing, that is perfect.” She says, “I really was impressed by that.” And we got talking and I was very happy with it because she was talking about some of the same things that I was talking about. She knew what she was talking about. And I said, “Let’s have a follow-up discussion.” And we met at one of my houses that I was selling and she was in the area. “So let’s meet there for a meeting.” And it was just a pleasant experience bringing on approximately 7 individuals for my acquisition team to purchase 100 plus unit apartment complexes. And I told her, I said, “You’d be perfect for this.” And I said, “You know, I would even give you an equity position if things worked out so it would be a percentage of the business.” And we were just talking and we couldn’t stop complimenting each other on everything that the other one knew. We were talking about economics and where we think the market is going. And that’s very dear and very close to me. And that’s what we do at Templar, we’re looking at the economy, we’re looking at the stock market, we’re looking where things are going, we’re looking at unemployment, all those things, because that could factor into everything from inflation to where the mortgage rates are going, and how to counteract that and make sure that you’re protected for it.
So it was a pleasant discussion. It was a very big surprise for me that I have an agent that previously was doing mergers and acquisitions, formerly a CPA, and knew all these things. And it was just very refreshing from other discussions I had with real estate agents, where they don’t even know there’s a moratorium on evictions. So that was a big plus for me this week in terms of the growth of our company. And I’ve offered her a position, we’re going to talk some more, and I’m hoping she’s going to take the position and help Templar grow even faster.
A couple other things I wanted to talk about today is just property taxes and how some towns are just out of control. We had this COVID thing going on, and FAM would increase their property tax, I think, by 25%. Just think about that, we’re having problems as it is and again, the government, township government, but still decides “let’s increase or let’s do a revaluation of all the properties and increase it by 25%.” Now, again, that’s what the mob does. And I always equate government with the mob the way they sometimes fleece innocent people of and you can’t do anything about it. You cannot do anything about it. You could complain but they really don’t care.
And I had a situation with a township, where I have to finish a permit and get it through and sell the house. And I say it’s under contract and I says, “Can you help me and work with me to push it along?” And she says, “We don’t do anything like that. You have to wait your turn.” And again, you call certain towns that are always really willing to work with you, and you got other towns that just will not do it. And that just gets me crazy. And they sit high and mighty on the ivory tower and it’s a shame, it’s a real shame. And innocent people are impacted by it. Me, I’m impacted but you have other individuals that get impacted worse and are in different financial situations. And that’s the sad part.
So I’d like to close out today. Thank you very much for listening. And again, you could reach us at 973-240-8593 or templarcashforhouses.com. Thank you very much. God bless and take care.
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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