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 February 27, 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, 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 can answer any questions you may have, or you could email us from our website, and we could possibly put on the show any topics you want discussed or if you just want to ask us any questions in general.
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. 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 will go over everything there is about real estate and those things that impact real estate. We’ll talk about our rehabs and some of our investments, what went well, what did not go well, and especially how we learned from them. We’ll talk about the economy and 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 strongly encourage everyone
to do lots of research in anything they do, again, through recommendations are always very important. Everybody always says “get recommendations, get recommendations”. But again, you need to ask lots of questions with the individuals that are giving the recommendations. Because again, something that might be good for someone else might not be good for you or another individual. So that’s very important that you ask lots of questions about the type of person it is, the type of service they’re providing, and all those things that are necessary, whether they’re on time, if they’re late, do they have to come back numerous times. That’s for contractors or anything else from a CPA perspective where things are not clear.
The other thing that I did discuss last week and I’ll bring that up also in terms of recommendations is experience. Just because you have a lot of experience doesn’t mean you’re really good. A lot of people say, “Well, they have 20 years of experience.” I went through this example last week with an agent that said she had 22 years’ experience. Well, she might had 22 years’ experience but she was not good. So it does not matter the number of years of experience.
When I first started long time ago in IT, I had two years’ experience, three years’ experience and I started at a insurance company. I came in there and I was running circles around individuals that had a lot of experience, 20 years’ experience and so forth. They knew a very small piece of the puzzle from an IT perspective. The two or three years of experience that I had plus my studying in college, I was leaps and bounds above them. I can produce things quicker and the technology I knew better. Again, it doesn’t matter always the number of years’ experience, matters about the person. Sometimes that’s very hard to determine if the person is who they say they are. It’s like when we hire individuals, you never know if you’re getting a good person or someone that’s not good. They might look great on a resume, but it doesn’t translate in terms of an effective employee. I think that’s one of the biggest things that’s always a challenge for business owners.
I was speaking to someone today on individuals and she owns a deli and we’re talking a little bit about her expansion or possible expansion. The biggest thing she says is getting people, and then I correct her, I says, “Getting people is not the issue. It’s getting good people.” So that’s always a challenge. But I have a great team and I’m very blessed with that so I’m always very happy with my group. I’m very, very blessed, like I said, and it translates into great customer service for our clients. That’s just what we are.
Also, I’d like to have a shout out to Jim and Sandy, as well as Paulette. Thank you guys for listening. I would also like to ask anyone that’s right now looking for a position, I’m looking for a number of positions and you’ll probably hear me talk about this for a considerable amount of time. That’s because right now I’m looking for a position for a financial person, six or seven. It takes a long time to find, like I said, good people. The individual I’m looking for is for mergers and acquisitions type of individual. And that’s really for the acquisitions of apartment complexes. This individual needs to be able to crunch numbers really well, strong financial background, maybe be a previous CPA, someone that’s very hardworking and wants a good challenge. That’s the biggest thing. So we’re, again, expanding and we’re looking for apartment complexes throughout the country. Not all states like California, no, no, and New York, no, and Oregon, Washington, a number of those states where we’re shying away from right now. But other ones, we’re very bullish on and will continue to be bullish.
I’ll probably discuss if I have time today on some of the growth trends throughout the United States in terms of what states are having net increases of people as opposed to decreases of population, and there’s a number of them. It’s pretty unique, the way they’re looking at things in terms of where people are migrating and where they’re leaving. So I’ll leave it at that and hopefully I’ll be able to have time to discuss that today.
What I’d like to talk about today is also about when purchasing the house, things you need to look out for and just some pointers on that and things to be wary of as well. So one of the biggest things is when you purchase a house, you need your down payment. Well, it’s not only your down payment, that’s one of the biggest things. You have to factor that in from a budget perspective. You need closing costs, and that constitutes your attorney, the title, insurance, and a number of other charges and fees that you’ll encounter, as well as appraisals, so on and so forth. So, again, just don’t think that you need your 20% for your down payment. That’s very, very important.
On a similar note, another thing you need to look out for and you’ve got to be cognizant of is additional money for repairs. Now, obviously, and even with as good as an inspector is or could be, you’re still potentially going to have certain things that you’re going to say, Well, I need this now. I need this. I need this.” And that’s just the natural process when you’re purchasing a house. When we sell our houses, we usually don’t put shower rods up, things like that. It’s pretty bare but we put the basic things that are necessary for a house. Everybody wants a different type of shower rod. There’s a lot of different things associated with these little things that might be important or necessary that right now aren’t in a house or someone that owns a house might leave or take away or throw out. It really depends. But you always should have additional money, one thousand, two thousand, a couple dollars at least to correct or fix anything that would come up, that the inspector wouldn’t find. Anything from plumbing issues to whatever the case may be. So that’s really, really important. When you purchase a house, you got to have a little extra. That’s very, very important.
The other thing is, is that right now you have to be very careful when you purchase a house and you’ve got to make sure that you’re not charging too much on your credit cards, because that’s very, very important. That all goes in to when they’re calculating whether you are able to pay for a mortgage. When the bank goes through its underwriting process, they look at those things. So it’s very, very important that you decrease your data with that, is that if you do have a certain amount of debt and you do get approved, you might be just at the top of the limit of affordability. That’s not something you really want to be. You want to be towards the lower end so you have that fluff factor that in case certain things come up, that you don’t realize, anything from medical bills, to cars that break down, to cars that you might have to get replaced, any of those types of things. So it’s very, very important that when you’re budgeting, you have to factor all these things in when purchasing a house. You’re investing hundreds of thousands of dollars in this asset.
With our company, I always preach is to be more on the conservative side. Everybody talks about, “Well, I’m going to have a job, and as a result of the job, I’m going to get raises and so on and so forth.” And that might be the case but there’s cost of living increases, medical insurance keeps increasing considerably, car insurance increases. There’s so many things that increase. As a result of that, you don’t know. So I always preach to be more on the conservative side when you purchase a house, what you could afford and what you’re able to pay.
If you could only take one thing or a couple of things out of this radio show, I talk about being conservative with money and to be wary of it because you just never know. And that’s the thing, it’s not what you see that’s going to hurt you. It’s what you don’t see that’s going to hurt you, really. Those are the things that come up that you’re like, “Wow, I didn’t even think about that.” You never know no matter how much or how well you plan. That is very, very important.
So let me close out this segment. I will be back shortly. Again, if you need to sell your house fast for cash, you could always give us a call at 973-240-8593 or also, if you need a realtor, please give us a call as well. Okay, I’ll see you in a few. Thanks.
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, that’s one word.
If you’d like to either list your house with a realtor, give us a call. Or if you want to sell your house fast for cash, please give us a call as well, we’d be more than happy to help you. We’re always taking on new clients, my team is ready and willing.
So I’d like to get back to where I was speaking before about different things that you have to look out for when you’re ready to purchase a house, and some of these even a existing homeowner could look into and maybe use as well. So it’s not just for someone that’s going to buy their house, a new house. Next thing is, if you’re self-employed, again, that’s always a challenge with banks and the underwriters. Because with a self-employed individual, there’s always ways of manipulating numbers to make it look better or worse, depending on the situation, depending on what you want to do. If they see something, there’s always those questions associated with it. Is this a real number or not? Because there’s always ways of manipulating numbers in accounting, there always is. That’s the reason why sometimes it’s a challenge when you’re self-employed to get certain types of loans. But there’s always different loans out there for individuals that are self-employed and it’s no docs, which is no documentation there. There’s certain things like that that rely on really what your assets are, what your credit history is, so and so forth. But it’s not the end of the world if you’re self-employed and you need to get a home mortgage. There’s always programs out there associated with that.
Next thing is, when you’re looking for a house, it’s almost like a full-time job, between looking on possibly Zillow, talking to your agent, going out to the different houses, it’s a full-time job, basically. It’s sometimes challenging. It’s debilitating sometimes, frustrating, especially if you’re putting in bids and you’re getting outbid as a result of that. That’s always, always frustrating. Especially in this market, depending on the town you’re in, there’s multiple bids going in. As a result of that, it could be very, very frustrating.
The other thing is, is that you’re always looking on Zillow, you’re looking for that perfect house, and then all of a sudden there’s not enough houses in a particular town. You’re looking at other towns, you’re going out on these different visits. The stress also associated with putting a bid in, hopefully you’re going to get it. If you get turned down as a result of that, like I said, there’s a lot of frustration, especially nowadays with this. That’s something that is just the way the market is right now, especially. Not that normally it isn’t a full-time job. It is, it’s just the way it is now, it really exasperates a situation that’s just very tedious and time-consuming.
Next thing which I’m not going to belabor on because I’ve talked about it before, is just to make sure you have a good realtor. One thing I will say, I brought it up a long time ago, is when you’re dealing with the realtor and other professionals, I highly recommend not picking a friend. It’s just better to have friendship than a business relationship and a friendship, because usually something goes sideways and if there’s a problem, then all of a sudden, what do you do? You sever the friendship or sever both the friendship and the business relationship if there is a problem. So, again, if you have a friend that is a realtor, I would just go with someone else. I think it’s for the best. You could just tell them that, say, “Listen, case something goes sideways, I don’t expect it to. I value your friendship more than the relationship.” They should understand that. And if they don’t, well then maybe you have to question their friendship as well. Because it’s not about the money, really, it’s about the friendship in the end. So, again, even with the CPAs, attorneys, so and so forth, that’s just something that it’s best if you have just a clear business relationship with.
Next thing is, we’ve spoken about before also is, preapproval. That’s very important, because when you’re putting in these bids, a lot of homeowners want to see that you’re preapproved. They’re not going to go with you if you’re not preapproved, even if you have the winning number or the winning bid per se. That’s very, very important. So you definitely need to get preapproved beforehand, especially in a competitive environment. That’s more so, that is a big thing. If the market’s not good, preapproval is still important but it’s not as important. But nowadays, the way it is, it’s very, very, very important so please take heed to that.
Next thing has to do with if you’re going to purchase a flipped home. So depending on who does the flip, it could be good, it could be cosmetically fine. There’s a lot of variations in it and that’s always a challenge. You obviously have to have a good inspector. But again, inspectors don’t catch everything. Now, the houses we’ve done, a lot of individuals come in, realtors come in and say, “Joe, I’ve seen a lot of houses and a lot of flips, and they’re not as good a quality as yours.” And I said, “Yeah, we put a lot of money into it.” But even with that said, we are fixing things that we see, that we experience, that our inspectors look at and find as well. That doesn’t mean there’s other things out there that we don’t know about. That’s the challenge that we have. We don’t live in the house. We have our teams go in. They fix the stuff, enhance it, change it, whatever the case may be. But we don’t live there, so we don’t know if certain things might happen. If we have a lot of dry spells and if it rains a lot, all of a sudden we get water in the basement. That’s happened before. But what happens if it was just a dry spell and there was no rain and we wouldn’t catch that and we wouldn’t obviously fix it if we didn’t know about it. That’s one of the biggest challenges that we have as flippers.
We had a house that we kept for a really long time because of COVID and the township. So we kind of experienced a lot of things with that, with rain water coming in, and we were able to crack them. But even with the amount of time that we held the house, we weren’t there living there. We didn’t use the toilets that much, the plumbing system, so on and so forth. So we don’t know if there’s potential issues. We did a good review of it but in the end, I can’t say 100%. Some of the individuals that do flips, they’ll say the same thing, especially if we go into a flip and we’re in and done within two months, and then we put it up for sale, we don’t know everything and neither does anybody else. So that’s just something to be wary of. Again, certain individuals just do very cosmetic things and you really don’t know that there’s underlying issues. That’s the problem. But when we purchase a house, we try go through it as detailed as possible and check everything out and make sure that we put out a good product. But that can’t always be said of everybody else.
The other thing is location. We all know location, location, location for real estate, especially, you purchase a house, you want to make sure it’s based on your lifestyle and what you’re looking for. If you want to go shopping, do long walks, having downtown, you’ve got to look at all those things. There was a study done recently on all these individuals that purchase houses, and a higher percentage than normal have some buyer’s remorse as a result of it, because they just jumped into a house. They really didn’t look at it in terms of location, what they wanted, what the house offered, so on and so forth. So now you have these individuals that are not happy. I said that a while back, probably May or June saying that individuals are just buying houses. There’s going to be individuals that are going to say, “Well, I don’t like this” and maybe “I’m not accustomed to this” and “I shouldn’t have done it” and it’s coming to fruition on that.
The other thing is, obviously, when you’re looking at a house, make sure you check the basement out. That’s one of the biggest things you need. The foundation is one of the most important parts of the house. You have a good inspector. You could feel confident to some degree about that. Again, you got to have a good inspector. You got to have a good individual that’s going to do a tank sweep. The inspectors usually are going to do for radon test. They’re going to do for termites and rodents and things like that. Those are all very, very important things that you need done with the house. It’s very, very important.
The other thing is, if you’re purchasing a town home or a condo, make sure you know the condo fees associated with it. Make sure you understand that. Make sure you understand, even looking at their budget a little bit, what they’re going to be doing in the next couple of years. Because they might put a surcharge on your HOA fees for certain things that need to be done. I know way back when, this was maybe 15 years ago, we got a lot of snow and my ex-wife, she had a surcharge for snow removal. That was for over the next X amount of months there was a surcharge. Now, that you can’t plan for but there might be other things like new roof or other types of things that they didn’t factor in or they should have factored in and there’s going to be a surcharge associated with that. Some of that you could determine, some of that you cannot. But make sure you understand the HOA fees and the bylaws associated with it. When you go into a new HOA, homeowners association, you will probably be charged additional amount of money, possibly $1,500 as someone that’s joining it. That’s in the bylaws so you can’t go around that.
Again, the other thing that’s important is to make sure you understand those bylaws, make sure your attorney has those bylaws, make sure that they request the bylaws. We had an agent that was stating that we’re selling or buying a condo for one of our clients, representing them. The agent for the seller says, “You don’t need the bylaws right now. Wait till you purchase it, then you’ll get them.” That’s not the case at all. Do not under any circumstance do that. This individual was representing it that that’s the norm. Again, that’s not the norm or you shouldn’t be. You should always be understanding those things.
The other thing is surveys are very, very important. Please get a survey done. We were going to purchase a house and before we ran the survey, the woman said to us, she says, “Yes, I have a deck and it’s half on someone else’s lot.” She was just like, “That’s the way it is.” Please be careful about that because you’re going to have to take down the deck if that’s the case.
The other thing, which all homeowners should do, existing ones as well as anyone that’s purchasing it is to look up on Google, this is for New Jersey or any state, would be New Jersey Sex Offender Internet Registry. If you Google that, you’re going to see any sexual offenders in your neighborhood or in your town. If you’re single, especially women or something, you want to know about those things. You could just Google that and you’ll be able to see any sexual offenders in the area. I highly recommend everyone do that no matter what.
Well, I got to close out the session. I’d like to thank you very much. You could call us at 973-240-8593 or templarcashforhouses.com. Thank you very much. God bless and take care, bye.
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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