Templar Real Estate Radio Show Transcripts 2-13-2021

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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. Again, that’s T-E-M-P-L-A-Rcashforhouses.com, that’s one word, or call us at 973-240-8593. Again, that’s 973-240-8593 and we could answer any questions you may have, or you could email us from our website if you want any topics discussed during the show and we’ll try to put it on.

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 and 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 or a brokerage, but I have individuals on staff that are agents that can sell your house through the traditional Multiple Listing Service. 

This show will go through 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, and especially how we learned from it. 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 that you know as much as possible about it. 

I’m going to provide you with my opinion and it’s only my opinion. I ask everyone to do lots research on anything that they’re going to do financially or anything to do with contractors. If you’re going to be spending money, research it. It doesn’t matter what it is, okay? So, please, double, triple check, always ask for references. It’s extremely important. Also, when you have a recommendation from someone, I always tell you, ask lots of questions, lots and lots of questions. Even though you’re not used to asking a lot of question possibly, please ask a lot of questions so you could really, as they say, peel back the onion and understand the person or the company and how they work. Again, what might be good for one person might not be good for another person, so just a simple recommendation is not always just slam dunk with that, so please take that advice.

I’d like to do a shoutout to some of my favorite listeners, Paulette and William, and Bonnie R. Also, I can’t believe this is my 50th show, so I didn’t think that I’d last 50 shows for a while there, especially in the beginning, so when I was putting this together, I was like, every week, I gotta do this and almost every week, I do do it. There’s a few weeks that I did not do it, but it was just, I was worried that I wasn’t going to be able to last for 50 shows or a year, whatever the case may be, so I’m pleasantly surprised and I’m happy about it and I’ve gotten a lot of positive feedback and that’s great. Again, it’s very important, providing good content to you, and if there’s anything that you would like to hear, please give us a call or drop us an email, it’s very important. When you hear things from other people, you get a different perspective if they want something or need something, and I think I’d love to bring it up on the show if I could.

Also, I’m trying to figure out the best way to start doing some additional interviews with some additional individuals, that’s one of the things. Second thing is, I might be expanding this to one hour, so I’m trying to figure all that out and hopefully, we’ll see what will come out of it, so over the next few months, we’ll figure that out.

Again, as always, if you need to sell your house, please give us a call, we’ll provide you with a cash offer, if you want us to buy the house, otherwise, we could list it with the realtor on our staff, and we have some really great realtors. Last week, I had spoken with a gentleman and he said, “Well, I’m going to sell my condo.” I said, “Okay, let’s look at it.” I couldn’t do a cash offer, there was really just no equity in the account. There just was not. So, what I did is I said, “We have a great realtor and I think you’re going to really love her,” and after she went there, he said to me, “Yeah, Joe was right, I do love you and I want you to list my condo for me,” so that was great. I have a great team with me and I’m constantly expanding. Right now, we’re looking for still six or seven openings for individuals that have a strong financial background. It does not have to be in real estate, they’re going to help underwrite some deals that I want to bring on in terms of apartment buildings, so I need someone that has good analytical skills. The perfect person would have mergers and acquisition skills, but in terms of that experience, it’s not necessary. A former or current CPAs, anyone with a strong financial background, someone that could crunch numbers, someone that’s possibly worked in corporate America managing extremely complex budgets and making it work, I need a go-getter, someone that’s hardworking. Those are types of skills that I’m looking for. Again, you don’t have to have a strict financial background but it would help, but I need someone that’s very good with Excel and could crunch numbers. That’s very, very important.

So, that’s because we’re, again, pushing really hard to purchase apartment building complexes, preferably 100-plus units, but I’m looking at two this week that are, one’s like 50 and one’s like 40-something, so we’ll see on that.

The other thing is that again, if you know of a deal, please give us a call, if it’s for a listing of a house or someone needs to sell their house for cash, we’d be more than happy to look at it. We’re very discreet, we’re not going to give your name unless you want us to, but we’ll definitely provide you a nice finders fee as a result of that. We always try to reward people that are going to help us out, so that’s very, very important to us. 

Last week, I talked about the stock market and I talked about being careful. The market is still going up, so you’ll never know really when the top of the market is and it’s just, all of a sudden, it will just capitulate but it’s continuing to move up and I just continue to tell people to be really wary about making sure you protect your profits. One of the biggest things in any investment is capital preservation, whether you’re dealing with stocks or you’re dealing with real estate, I bring up stocks a lot because a lot of people are into stocks and that’s all they know, and that’s all their financial advisors know, and that’s what they’re certified in so that’s what they have to sell. They cancel something else that they’re not certified in, so it’s very, very important. With that being said, again, capital preservation, protecting, first of all, what you put it in also, your profits, and again, do their research, protect those profits with stop losses. Again, stop losses are something where if the stock goes down after a certain percentage or a specific number, the stock or if the EFT, whatever the case may be, would be sold. You have to ensure that you do the correct type of stoploss because it could drop quickly and then the stoploss doesn’t engage, so just make sure you speak to someone that knows about those things to make sure it’s selected correctly. 

So, a lot of times, people see these TV shows and they see rehabs and then they’ve never done it before and they try to jump in and do it, and then they lose a lot of money, and I have one such instance where a good friend of mine, he’s an investor, and he’s done a number of deals but he’s still not accomplished in everything and he hasn’t done all the different complexities, so a lot of times, he gives me a call, he says, “Joe, what about this?” We talk a little bit about certain caveats he has to worry about and thinks he needs to look at. One such deal came up where he said this woman started to do a rehab and as a result of it, she ripped down all the drywall and ripped out all the electric and all the plumbing, and she’s now trying to sell the house because she sees that it’s too complex, it’s a pain in the neck getting contractors, the costs are really high and probably 10 other things. So, she wants to sell and she wants to sell at relatively speaking, high-priced, and she’s not going to get that price unless she gets someone else that’s an amateur that thinks they can do it, and that can happen. But with that being said, she’s come to the realization that she shouldn’t have pursued this or gone any further, and again, that’s where the expertise comes in and you can’t just look at a TV show or read books sometimes and just do it. I say that all the time, if you are doing an investment property where you’re supposed to put the least amount of money into it to get the most out, pulling down drywall and stuff is not going to do anything. Replacing all the electric is not going to add any value. Replacing the plumbing is not going to add any value. you might need to fix it but if it’s working, then that should be fine, and that’s the biggest thing, you just not replace things to replace them because you saw it on TV, and especially when it’s with drywall, you get someone that can do drywall that’s very good, going to look brand-new or it’s going to look really good. It doesn’t have to be perfect. When we do our houses, they’re not perfect and they can’t be perfect. They’re older houses and even new houses, they are not perfect. You have these people that want to do all this work. Again, you put the least amount in and get the most out of it, and unfortunately, people don’t realize that. They’re getting high and windows, they’re getting, she’s putting Pella windows, really expensive windows. You don’t need Pella windows. It’s not going to raise the price of the house, really. You might think so but it really is not, and again, you gotta go with things that sell a house. Everybody knows that. You have nice bathrooms, you have nice kitchens, those are all really good things, you do some really nice, possibly landscaping to get good curb appeal and then flooring and the right type of colors. Again, selecting the right colors and the right tiles are very important. You got to know what the trends are and what it’s not, and it has to do with what your tastes are but what is really what the market will bear and I’ve seen stuff where certain things are pink and some bright colors, and I was looking at them like, holy moly, and it’s just wrong colors, so just be careful with that. Again, I always hate to see people lose their money because of bad decisions. I preach that a lot. That’s kind of really, really important to me and it’s one of the reasons for the show, it’s just to educate people and just make sure that you know as much as possible about it.

Well, I’m going to have to close out this segment and I’ll be right back. But again, if you want to give us a call, call us at 973-240-8593 or templarcashforhouses.com, thank you. 

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 templarcashforhouses.com, that’s T-E-M-P-L-A-Rcashforhouses.com. Remember, if you need to sell your house, give us a call, especially if you need to sell your house fast for cash, definitely give us a call and we’ll set up an interview, and we’ll stop by and we’ll take a look and we’ll see, and then we’ll offer you a price on it and if we agree on the price, then we can set up a closing and work through everything there is with the attorneys, and that’s usually really pretty painless but we’re going in and we’re buying as is, so because of that, we’re not going to be worrying about different concessions  that you’re going to have to provide to us, things that aren’t working, so on and so forth, so it’s usually a very smooth transaction, and that’s good, and you pick the closing date. Where we will be concerned with the closing date is if it’s starts going out, like, three, four, five months because we don’t know what the market’s going to be and it could be good or all of a sudden, something else could happen, another pandemic or whatever the case may be, some type of black swan event, we don’t know, so we always have to be cautious about that. Our goal is if we purchase a house, we’re going to fix it up and get it back on the market as soon as possible, and that’s important to us. 

So, I’d like to talk about a couple of things, one of them is where the economy is with real estate, where everybody envisions the economy would be and these are, again, projections. It doesn’t mean it’s going to happen, but there’s things that are going to happen throughout the course of this year in terms of the ability to afford housing. That’s one of the biggest things and that’s resonating with a lot of experts right now, but with that being said, Black Knight, so Black Knight is a mortgage data and technology company and they reported just the other day that 5.2% of mortgages or approximately 2.7 million are in forbearance, and that results in approximately $547 billion in unpaid principal balances. That’s a lot of money, and that’s why I say all the time, there’s always a disconnect between main street which is the common person and the stock market and corporate America, so there’s always that disconnect and you can’t look at the stock market and say that everything is going to be rosy, even Janet Yellen was bringing that up as a major concern in terms of what’s going to go on with the economy and with individuals out of work, and I think it’s going to get worse. 

Another thing is that they said that the affordability for the first quarter in the United States for housing got worse as a result of that, and it was up 10% from previous years, and we have all this cheap money and because there’s cheap money, it drives certain things. It drives stock prices higher, which is not a bad thing, right? But also, it drives housing costs higher, and as a result of it, what you see is a price being sold higher and you have lower interest rates, then you can “afford more.” Also, it just continues to drive it up higher and higher, and eventually, when interest rates rise, then we’re going to have a problem affording those houses, and as a result of that, usually, that you’re going to have a pullback on the price of the house, and it will go down, whatever that percentage is, 5%, 10%. Probably in the 10% range, but also, you might have issues with the stock market and so on and so forth, and eventually, the stock market is not going to go up all the time. I was talking to someone the other day and he says, “Yeah, the stock market always goes up.” It doesn’t always go up. There’s things called corrections and it goes down, and we had a small correction, relatively speaking, for a short duration last year but it bounced back because there was a flood of money, but that doesn’t mean it’s going to happen again. Now, you can always continue to flood the economy with money and the people with money and it’s always going to rebound. That’s not going to happen all the time, it won’t, and a lot of billionaires are being very conservative even with the market going up as much, they are providing some very conservative types of positions, and to make sure that they have the money and they take a major hit. Some people are saying, “I don’t think it will happen,” like a 40% decrease in the stock market. No, I don’t think so, but it could happen, so all those gains, again, it could go up, the market could go up 20%, 20%, 20%, 20%, and then you have a 40% decline and that’s going to wipe away almost everything you made. So again, like I said before, please just watch it with that.

The other thing is that there has been talk from the Biden administration about providing different programs to help for the first downpayments of housing, and a couple of people have been interviewed on that, and some people are saying that’s great, it’s great, you have more people afford housing. Superficially, that is the case, but there’s always the cause and effect, and what individual from the American enterprise Institute, so it is a conservative think tank, so I’ll make that very clear, so this gentleman is stating that if we see a push for Congress to pass this first-time buyer down payment assistance in 30-year loans, they think that’s a terrible policy, and those decisions as those subsidies will just capitalize, get capitalized, and push home prices even higher, and that’s what I believe. Anytime you’re doing things like this, there’s always that cause-and-effect and it’s always easy to think about saying it’s a good thing, and I’m not saying that this assistance and that we shouldn’t have it, but there’s always the cause and effect as a result of it. Case in point, we see their pushing for $15 minimum wage. Well, one of the things is that they said that yes, it’s going to raise those individuals out of poverty. Okay, now, what’s the effect of that? Less individuals are going to have jobs and that’s the issue, and I’m not a big fan of that in terms of pushing for the $15 an hour minimum wage. Wayback when, and maybe I’m missing something, to be quite frank, when I was younger, anybody that was getting minimum-wage couldn’t live on it. I was in college, I couldn’t live on minimum wage, so now, all of a sudden, they are switching minimum-wage jobs to somewhere you need to live and it was never like that before. Now, all of a sudden, they’re having minimum-wage jobs that now, we have to raise it so that one can live on it, and I remember in college, I couldn’t live on what I was making, I just couldn’t. No matter if I was working 60 hours or whatever the case maybe, let alone with a family and then you just can’t do it. I was talking to someone wayback when. He has a small hotdog stand and it’s in a building but it’s small, and he said to me, he said, “Joe, if I have to pay $15 an hour to someone, I’m going to have to let go of these people and I’m just going to have to do the work myself, and that’s the way it is. You just can’t afford it, and that’s why McDonald’s, you’re seeing all these kiosks and self-serve types of things. It’s because they can’t afford it, and so every time you push business a certain way, they’re going to determine a way to make money, and that’s just the way it is, and some of these places don’t make a lot of money as it is and then you’re going to raise your overhead and that’s one of the biggest things a business has, is overhead, and whether it’s employee benefits and wages or also, the building itself and the rent associated, those are the two biggest things. Some of it is more so wages then even the building but it depends on the type of business, so on and so forth. So, it’s just not a simple thing, by raising the wages to $50, it’s really about educating people so that they get better jobs. One of the jobs that is really in dire needs is for plumbers and any of the trades. There’s hardly anyone out there doing that. Construction is very, very limited in terms of people that are qualified to do construction. That’s one of the reasons why prices are so high also and back in 2008, 2009, during the downturn, a lot of contractors went out of business, quit and they didn’t come back, so there’s not enough contractors out there and if you’ve dealt with contractors, there’s always busy. Now, you know why. I have one gentleman, he’s always calling me for work so I scratch my head, I’ve never used him but I scratch my head saying, “I can’t believe it when you can’t find work, so I don’t know how good your quality is,” but I didn’t say that to him but that’s what I was thinking because most people I know, they have a lot of work. My teams, I provide too much work to them that they don’t have to go somewhere else, which is good, but sometimes, there’s a little lull and they’ll find other jobs and so on and so forth, but a lot of my crews have tons of work, and I give it to them because they’re good.

So, one of the other things I talked about last week is this condo that we were looking at, representing a buyer and it went through the inspection and in the attic area, there was a large, it went from one unit to the other, and I was concerned and we were all concerned about it from a safety perspective. It was a 55-plus, so it’s not as much of a concern but there’s other things like a leak and also, the other thing was the dryer vent and it just went directly into the attic, so that’s not the best, you really shouldn’t be doing that. We looked into it and they do clean it out every year and it should be cleaned out every year, but still, with the insulation in the attic and all the lint going in there, it’s not really the best thing for it in terms of the design and the way it should be, but unfortunately, that’s the way it is, and the woman wants to purchase the condo, definitely, but there are still certain things on the inspection list that we need fixed, and the buyer is pushing back a little bit, and we will see where that goes but again, there are some safety issues with outlets that are not GFI, and you’ll see GFI usually in the bathrooms and in the kitchens. You’ve seen them before where in case there’s a short, you don’t get electrocuted. Right now, they don’t have any GFIs in the kitchen or in the bathroom, the seller is pushing back saying, well, it’s not required by the CO for the CO but that doesn’t mean anything. It’s a safety issue, and the buyer wants it. So, we’re going to see where that goes. There are other things that they really didn’t comment on when we ask them, there were leaks in the roof that needed to be fixed and that’s going to be done by the HOA but one of the things is that in the HOA laws and bylaws, you need to make sure that you contact the HOA when something occurs. If it doesn’t and it’s an extended period of time, then the owner is responsible for the repair, so we’re not sure if the owner ever said anything about the leak, so we don’t know who’s going to be responsible for it. So, there’s things like that, and I’ll talk a little bit more about it next week when the things get found out in terms of that, but I’d like to thank you very much for everything and please give us a call if you need us at 973-240-8593. Thank you all, God bless. 

Be sure to listen to the podcast of the Templar Real Estate Talk Show. Find it now at templarbuyshouses.com. 

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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