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 6, 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 or you could call us at 973-240-8593 and we could answer any questions you may have, or email us from our website.
If you want any topics discussed on our radio show, please email us or call us and we’d be happy to add that to the show if we’re able to.
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 and we’re not a brokerage, but I have individuals on staff that are agents that will sell your house through the traditional Multiple Listing Service as well.
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 go well, and how we overcame those problems. 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 will provide you with my opinion and it’s only my opinion. I ask everyone to do lots of research in anything that you do and make sure that you ask lots of questions. As I always say, if someone’s going to recommend someone to you, please ask lots of questions because what their tolerance is might not be what your tolerance is for tardiness, for work, quality, so one and so forth, so it’s important that you ask lots of questions and really understand the person that’s getting recommended, the company that’s getting recommended, so on and so forth, and even then, there are times where you might have someone that’s really good, you recommend it to someone, the individual doesn’t do well and you’re just scratching your head, so it happens. There’s no fool-proof way around this, but you could at least mitigate some of the issues.
I want to do a shoutout to some of my favorite listeners, Paulette as well as Jim and Sandy S. I would also like to thank my private investors that I just engaged with on one deal, and that’s Tom and Jenny, so Tom and Jenny, thank you very much and I can’t wait to give your money back with lots of interest.
Okay, another thing that I’d like to talk about briefly is private investors. So, Tom and Jenny are private investors for us, they invested our deals and they will get a rate of return and their rate of return will be based on a number of things: the type of deal it is, the duration of the deals, so on and so forth. All private investors are in a passive mode, they are not active so they are not making decisions on a day-to-day basis about the property, what we are rehabbing or if we’re having an apartment complex in terms of the daily operations for that. They will either get money back on a monthly basis or if they want quarterly or yearly, or at the end of the project, it really depends on the deal and how it’s structured.
Again, if you’re interested in selling your house fast for cash, please give us a call, we’d be more than happy to set up an appointment with you and take a look at the house, and then provide an offer. Again, we purchased as is, so that’s very important. Also, there’s no commissions associated with it and she take up all the liabilities after you sell the house to us, so if there’s problems with the foundation, if there is water in the basement, whatever the case may be, we’d be more than happy to take a look at it and provide an offer.
Also, if you have additional furniture or anything else that you don’t want moved out, we’d be more than happy to, usually, we give it to a local church if they’ll accept it or at the Veterans Association, it depends on the area of the state and the different charities. Some charities are accepting more and others are not, some are accepting smaller items, others accept larger items, so it really depends, okay?
The other thing I’d like to talk about is again, if anyone has any apartment buildings they’re interested in selling, larger ones, preferably, 50-plus units, but we really want 100-plus units, it doesn’t matter the state, to some extent. There’s a few states we want to purchase from, New York being one of them, and California, Oregon, Washington, those are the main ones we will not purchase from. All other states, we are pretty much open on. Again, it depends on a number of factors but we’re a lot more flexible when it comes to, like I said, California and New York.
The other thing is if you know of anyone want to sell their house, either to the traditional multiple listing service or can sell their house and they want cash, we will pay a finders fee as a result of that, we’re always discreet about that, so you don’t have to worry unless you want to say who it is, then we’ll be more than happy to but we’re very discreet with everything. That’s extremely important to us.
Another thing last week, I brought up the fact that we are looking for approximately six positions in my company for the acquisition of apartment complexes, so those individuals do not have to have real estate experience. If they do, that’s great. What I’m looking for is someone that has a strong financial background, current or ex-CPAs, individuals that had performed mergers and acquisitions previously, anyone that knows and is strong on the finance side, that’s what we’re looking for, specially someone that’s going to work hard, a go-getter, and can’t say “I can’t,” so in my organization, it’s always, we could figure out how to do it. The word “I can’t” is not part of our vocabulary. If an individual needs to sell their house, we will come up with different options to help that individual. Some of those options might not be too appetizing but it depends on the scenario and we are locked into certain things, you might have a large tax lien and tax liens, you really can’t take anything off of that. Now, the government wants their money, it’s that simple. Other types of liens, definitely. We could negotiate those and we have individuals on staff that will negotiate those liens down, so you get as much as possible for the sale of the house. That’s very important. We are very flexible, we do a lot of different things to make sure that the individual that’s selling the house gets as much money as possible, whether it’s through listing it on the Multiple Listing Service or whether they’re selling their house for cash, either way.
Next thing I’d like to talk about is something that I had said just previously on this, a couple minutes ago and that had to do with speculation. We don’t speculate but I brought up last week about a stock, game stock and that GameStop stock had a huge run-up from what it previously was, it was trading at $6-$8 last year and it went up to $488 this year, and a lot of people made money and a lot of people lost money, and as I said, the stock was worth $8, $10, $16, $20, maybe, but it went up to $488 and you had these individuals on Reddit that were pushing the stock and it went up as a result of that. A number of people that were shorting it we’re expecting it to go down lost a lot of money, especially a lot of hedge funds, so again, I pushed on that, I made it very clear , it was speculation, so right now, a couple weeks ago, it was $488. Now, it’s at $60 a share and is going to continue to go down. It might go up a little bit, but eventually, is going to come back down to probably near where it was previously, and you have individuals on Reddit that are saying, hold the line, don’t sell the stock, and so on and so forth because now, it’s this the little guy against Wall Street and they see all these ads and commentaries on this and they idealistically want to push hard against Wall Street, and I want to do that, and all these guys on Wall Street that are making so much money but on the flipside, this is a speculation deal and individuals are getting very frustrated because people are selling, and that’s the deal, there’s no value behind the stock and it’s all speculation. As a result of that, it’s falling and you have the stories where this one individual, his grandmother had purchased GameStop back years and years ago and she had the stock and it went up to $80,000. Her investment portfolio on this stock, and now, sometime this week, it was at $15,000 and that’s the thing, when you write it up, you gotta know when to get off or at least pull a portion of the profit when you’re doing this, and you never know when is the right time, you don’t want, but when you’re making so much money, you gotta really take money out of the table, and if you’re not, in the end, you’re going to lose out and it’s going to be compounded if you’re using margin. Margin is basically you get a loan on additional shares or money to purchase additional shares, so when it goes up, you are maybe doubling or tripling, and how fast you could move, how much money you’re making but on the flipside, when the stock goes down, you are doubling or tripling your losses, and all of a sudden, you could one day have $400,000 and the next day, you could have $30,000. So, I’m speaking from experience, that’s why I don’t do any of that anymore where you could be like, wow, this is great, and then all of a sudden, you’re like, what happened? That’s all based on margin and speculation, and some of it isn’t speculation when you’re trading also on margin, but again, you have to be cautious and you gotta know when to take money off and that’s very important. The reason I say all this is because I’ve been on that side. I hate seeing people lose money and that’s one of the reasons why I preach so much about real estate and who we are, and how we look at our investments, and to ensure that losses are minimal. Sometimes, we take losses, and interim loss if something happens, but in the end, we are very, very profitable. I’ve had properties where we’ve sold a couple of properties because we were getting so many properties in, I didn’t have any investors and even if I did, we always make sure that they are always provided all their capital back as well as what we agreed upon. If I have to take a loss, I’ll take a loss, but our investors don’t take the loss, it’s just that simple, and I’ve taken small losses on a couple properties when I had so many properties come in and I said, well, I’ll take a $5000 loss here because I’m going to make $70,000 on this property as opposed to not buying a property, so everything is calculated when we do these things, and anybody that says that they have never had a loss when they are doing a lot of deals, that’s incorrect. But when we’ve done it, we’ve done it based on calculations in terms of okay, I’d rather lose some money here or I could gain twofold, threefold, fourfold over here, and that’s the name of the game, and like I said, we’re always here to protect our investors money and what the rate of return is, that’s just the way we do things.
So, I’m going to close out this segment right now and will be right back. If you need to call us, call us at 973-240-8593. Thank you very much.
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.
In this segment, I can talk about a couple things that we’ve had this week. One is, we had an individual, and I spoke briefly about it a week or two ago, that we sold a condo in Clifton for this individual and she’s retiring, she’s a really sweet lady, a very sweet lady and just very detailed. I think she was either an engineer or an application developer, or a developer and she’s very, very detailed, so she asked lots of questions, which is good, we love that and we want to make sure that all the individuals we deal with, they’re very comfortable, so we sold the one condo for her, she’s looking for another one down in Monmouth County, we saw one, we put an offer in for her and they accepted, and we did an inspection this week, so we brought our inspector in to take a look at it, and for the most part, with condos, as I’ve said before, or townhomes, there’s only so much you have to really worry about. Again, a lot of the outside, you do not have to worry about, you don’t have to worry about oil tanks, all those things like that. You don’t have to do sweeps for that, so with that being said, we went through and he went through with my agent and they went through everything and they looked on one of the cabinets, it looks like it was previously wet from leaks or something like that and my agent saw it and so did the inspector, so he went up into the attic. So, these are condos, it’s almost like an apartment, we’ll say, so there’s two floors and this is on the second floor, and he went up into the attic and you hear the uh-oh, and there’s a leak on the roof and it only came through the roof and obviously down to the ceiling which wasn’t apparent where it was at and it was dripping onto the cabinets, so there was an active leak, especially with the snow melting, that was very clear, then there was the second issue up there, it was that the attic is not segregated for the different units, so when you’re in the attic, you can look all the way down and you look at all the addicts for all the units in that building, so like I said, there’s no segregation or wall associated with it, so there’s a potential for, obviously, a safety issue, that’s one. The one mitigating factor is it’s a 55-plus complex, so the possibility is there, is just not as strong a possibility as maybe another type of condo in another location where, it’s one thing to lock a door, it’s another thing to really secure your ceiling or the hatch, and you could secure the hatch going into the crawlspace or attic up there but again, if no one is in there, it’s very easy for someone to break through. It probably is not that difficult to do any of those things, so you gotta balance it out, but with this complex, because it’s 55-plus, it’s not really that bad but the buyer needs to know, this is an issue or could be an issue.
The other issue was not only the leak and a potential safety issue, was that the dryer vents went up into the attic and did not go outside, so all of the lint is being blown into the attic which is a problem for a couple of things, and lint, obviously, you need to clean out and they recommend you clean out a dryer vent once a year because there’s been a lot of fires because of that. So, it’s somewhat difficult to clean those out when they are up in the attic, and second of all, all that land is being blown into the attic so the potential is higher for possible fire, especially if you have the dryer going on in the summertime and obviously, the attic is very hot, so there is that potential there, so we are not sure whether she’s going to take the property or not based on this and because of the attic and it’s not segregated, that adds additional things, if there is a fire. Now, a lot of townhomes, you’ll see a firewall that’s between the different units, so it protects the units from the other units in the event there is a fire, but this is not the case, and that’s something to think about, and these are all the different factors that one needs to look at when you’re purchasing any type of property, whether it’s a condo, townhome, or a house. So, we’ll say I’ll keep you updated on where this is going to go. I’m not sure, to tell you the truth. I’m not a big fan of the attic exhaust fans going or for the dryer going into the attic. That something I’m very concerned about for the buyer, and also, the leak, so is the complex going to fix it? Now, the woman that just sold her condo said that her HOA or homeowners association, they really never fixed the roof and all they would come in if there was a leak, they would patch up the inside and make it look good again but they really wouldn’t do much for the leak, they might do a quick patch job and that might be okay, patch job, it depends, but sometimes, there was reoccurring issues with that. So, that’s another thing that you got a look at, is the type of complex it’s in and how they maintain those things. For the most part, a lot of townhome organizations associations are very good about fixing roofs, and they do it on a plan, like either a 15-year, 20-year plan, whatever the case may be and they are usually fairly proactive with it but that’s not always the case and we encountered that at some locations but for the majority of the situations, you have a good townhome organization and property management company and they are factoring in these things in, and that’s extremely important.
Another thing I’d like to talk about is contracts. I’m always pick up contracts and the ability to enforce contracts, so with our contracts and a lot of contracts, if there is a problem, after we sign the contract, there is usually a clause in there if there’s a problem where we expect it to close on a certain day and it does not, we’re not held responsible or the seller is not, and the buyer is not responsible either on the flipside, but we had a situation where we had some open permits that came up and we needed to close them out and it was taking excessively long because of COVID and the type of township and the way they handled things, it’s just a pain. I can’t even describe how painful it is, so with that being said, we are expecting to close on 31 January and it did not happen, and the buyers real estate agent, she was very , let’s see what the word is, trying to think of a good creative word, I can’t think of anything off the top of my head but maybe I’ll call her a cowboy and she was just shooting from the hip and just blaming everything on us and saying that we weren’t upfront with her. We’ve never stated and we could not state when we think the permit is going to close. She had a cursory knowledge of permits and that’s the problem that I’ve said before is that agents don’t understand rehabs, they don’t understand the permit process, they don’t understand the construction process, the approval process, they don’t understand it or at least 95%. Very, very few two, so what seems very easy to understand is not the case and there’s a lot of complexities and dynamics that’s involved in it with going back-and-forth with a township that’s very restrictive and that’s very slow-moving and so on and so forth, so she accused us of not being upfront, the buyers attorney was stating that they wanted compensation as a result of this because rate lock, because they were locked in at a certain rate, expired and they were going to have to put more money down to lock in that rate and they wanted the money back, and we’re right now compiling everything. First of all, it’s in the contract that says we’re not responsible, but also, we want to support our argument and we have a lot of locks in terms of our discussions with the township. When we called them, what their response was, our emails, so we are compiling that, we are very, very detailed with that and every time we talk to a township or we email the township, we always have records of that, so as a result of that, we can support our position very clearly. I always recommend that you always document everything. Document, document, document.
When I was working in New York City a long time ago, I kept all my emails, I CCed myself on everything, I made sure I always had everything. I’d have individuals come to me trying to support their argument. They say, “Joe, I know you have the email on it, where is it?” And I always had it because I always want to make sure that I didn’t have any issues in the end. I learned that very early on in my career in New York City, that I had to really protect myself, my team, my company, so on and so forth and I would recommend highly that you do that and make sure you CC yourself on emails when you’re dealing with anything from contractors to townships, two attorneys, to CPAs, to any type of organization, always have that covered. Even if you don’t think you’re going to have an issue, please do that, okay? So, if you could just take one thing out of this today, is to make sure you CC yourself, document all interactions as much as possible, so by the time we’re done, their heads going to be spinning with the detail that we’re providing in terms of calls, times and calls, duration of calls, what was discussed on the call, so on and so forth, but again, you gotta protect yourself and you gotta make sure that everything is very clear.
So, I’m going to close out today. Again, if you want to reach out to us, please call us at 973-240-8593, or templarcashforhouses.com. Remember, if you need to sell your house fast, please give us a call and we could again, list it through one of our agents or we will buy your house for cash. Again, thank you very much, God bless, and take care.
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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