Templar Real Estate Radio Show Transcripts 5-2-2021

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 May 2, 2021

START OF RECORDING:

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-ARcashforhouses.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 could email us from our website. Again, any topic you want to discuss on a radio show, I’ll try to fit it in or any other questions you may have.

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, we’re very protective of our money and our investor’s money. We’re not a brokerage, I’m not an agent. I have individuals on staff that are agents that could sell your house with a traditional Multiple Listing Service. This show’s going to go over everything there is about real estate in 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 what we learned from that, 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 will provide you with my opinion. It’s only my opinion. I recommend everyone do lots of research and get referrals from individuals. As I say every week, if you’re getting a referral from an individual, ask lots of questions because what someone might like, you might not like in terms of their work ethic, the way they communicate so on, so forth. So, it’s very important to ask lots of questions about the person, what they do, how they do it, what time they arrive, are they arriving on time, are they communicate constantly, do you have to call them 20 times before they call you back and then they say they were tied up and that’s the reason they didn’t call you back for 20 other phone calls. So, again, ask lots of questions. 

I’m going to do a shout out to a couple of my favorite listeners, the famous crossing guard, Paulette, from Livingston, Tim from Cedar Grove, as well as Cindy and John from Wayne. I’d also like to thank some of my private investors for their investments in our properties and I just… I have a lot of investors that provide money to us and go into our deals and it’s really great, these individuals, because they’re getting a decent rate of return and it’s not like the stock market where it’s going up one day and down the other, even though right now, it’s just going up the stock market. So, ours is more on consistent returns than going up and then eventually down and, like I said before with the stock market, you could have returns on given years, like 15%, 15%, 15% or even more but when the stock market comes down from a percentage basis, say it comes down 30%, it wipe out literally almost all your gains and that’s the issue and when they quote these returns on the stock market, it’s quoted from 30 years, we’ll say, or whatever the case may be, the duration but the question really is, is that are you pulling the money out when the market’s high or you pull the market out all of a sudden? You need to pull it out, we’ll say, in a year from now and the market is down and it’s already down another now 25%. 

So, then your return is not what it was this year and that’s something that is not said a lot and the other issue I have is that because of the low interest rates, there’s really no place for someone that’s retired, that wants to go conservative except for bonds and there’s really no good rate of return and so most of the individuals are putting it in stock and stock’s aggressive and no matter… you could say you could put it in [0:05:49], so on and so forth but if the market comes down hard, that money is going to be lost and if you’re banking on it to pay consistently, your expenses, you might be in for a surprise and that’s the issue I have; is the chase that people have to get a rate of return because you can’t put it in the bank anymore. You just can’t. So, we’ll see. Inflation’s going to probably kick in eventually and as a result of that, rates are going to go up. We’ll see what that happens about the banks in general but rates are probably going to go up then and we, right now, are addicted to low interest rates and it has spurred the economy which is not a bad thing, obviously but we’re not used to rates at the historic numbers they used to be. So, if we start getting a lot of inflation and the interest rates go up, we’re going to have some issues, we’re going to have some major issues and then people are going to look around and say, like, what happened? 

So, don’t be surprised if we get hit with inflation and probably not this year but in the coming years, do not be surprised at all because eventually it’s going to kick in. We’ve turned the spicket on with easy money for so long and it eventually is going to catch up. It’s just… it is. You just cannot not have it occur. So, just a caveat and we’ll be weary of that. Next thing, again, if you need to sell your house fast, either through the traditional Multiple Listing Service, please give us a call or you just need cash quickly, be more than happy to work with you. We had a number of great stories and situations this week, I don’t think I’m going to have time to talk about it but one was someone who was a widow and she was married for 45 years and her husband unexpectedly died from what we’re told and we’re there for her and she was ecstatic that she could trust us and that’s the biggest thing; is trust and her son came up from Delaware which is an agent in Delaware, real estate agent and he suggested to use a cash buyer and she did a lot of research and she called us and that was it and she loved what we had to present to her and her son as well and we talked extensively on it and they’re, right now, going through probate on it. 

So, it’s a really good story and it’s a really good thing that happened and we’re happy to be there for her. The other thing I have to talk about is obviously passive investing. Remember guys, if you do invest with us, you’re going to be investing passively, not actively. So, you won’t be deciding on colors, you won’t be deciding on rehab, you won’t be deciding on anything. Just basically, you invest money and you get a rate of return and that rate of return will be either at the end of a project or on a monthly basis. It really depends on the project, it depends on a number of things, okay? So, it’s just basically just sit back and let the checks come in. So, that’s all good stuff. Also, I’m looking for apartment buildings, preferably 100 plus units, I’ll do 50 units, I’ll even do some smaller ones. I’m not doing anything like for families and 5, 6, 7, we’re not doing anything like that, not even 10 but if something comes up, we’ll still look at certain things. So, I’d rather say… I never say never but anything that you have, please let us take a look at, we’ll provide a finder’s fee, as I always say, we’ll be discreet about it and you could feel very, very comfortable about it.

So, a couple of the other things, still looking for a couple of underwriters, again, strong background in numbers, finance, former CPA, current CPA, doesn’t matter and you don’t need experience necessarily in underwriting deals. We will help you with that. So, please give us a call if you’re interested. Last week and the week before, I was talking about a woman called Angie. Angie’s from Ecuador, Paulette wanted to help her out, she called me on it. So, I put something out a couple of weeks ago if someone had an apartment or a room or a basement where she could live there with her eight-year-old son. Her husband was killed, she lives in the inner cities, her younger son is scared to go out, scared to go to school, so on and so forth. So, I’ve been trying to find someone or find a place, nothing’s come up. Last week, I said I have a place in Caldwell, that one I’m still trying to work through. Had another one in Caldwell and I had… there was a two family house and I had requested for the agent to call me 4 or 5 times and the agent still hasn’t gotten back to me so I’m kind of furious about that. So, now, instead of going directly to her, I’ll have to bring one of my agents to get access to the apartment to see if Angie could get in there with her son and as I said before, any difference in price, myself and Templar will give her the money to ensure that she has a safe place. So, that’s very important to us. 

The other thing I wanted to say was that for Templar, 10% of all our net profit goes to different organizations and people to help them out. So, that’s near and dear to us and that’s the fabric of who Templar is and what we do are is to help people out and the reason why we named the company Templar is specifically for that and it’s… the Templar Knights were put together and assembled to help the pilgrims to go to the holy land and they’re there to protect and we view our responsibility also to help and protect people and that’s very, very important to us. So, everything we do is based on that name and we hold that really very, very dear to us is; to protect and take care of people. So, I got to close out this session. So, the other thing is, is that as I’ve been telling everyone for the last few weeks, since the beginning of April, that a couple of organizations or restaurants I’ve been trying to support through word of mouth. 

One of them is Mara’s Italian Deli and that’s in Pinebrook on Changebridge road. So, talk to Theresa, the owner, and she’ll give you 10% off on lunches and catering orders if you use my name and our radio show, okay? The other one is just to patronize Basilico, they’re in Melbourne, great Italian restaurant and his name is Mario. Just use my name, Joseph Zoppi and he’ll know who it is and just say thanks and you know, he does a really good job. He really, really does and I think you’ll have a great experience there. His staff has been there for I don’t know how long. I’ve been going there like probably 20 years or so and most of them have been there since that time and it’s a really good place, great food and Mario’s the consummate host. So, I’m going to close this out. Again, you want to call us, call us at 973-240-8593. If you have an apartment for Angie in like the Caldwell area or a room, please give me a call as soon as possible. Thanks. 

Joseph J. Zoppi:
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 973-240-8593 or templarcashforhouses.com. If you need to sell your house fast for cash, please give us a call or listing it through the traditional Multiple Listing Service as well. So, as I’ve said before, when we do investments, we do not speculate and we’re very protective of our money and our investor’s money. So, the same thing should occur when you’re using your own money and you should… there’s investments where there’s true investments and then there’s speculation and each has its own spot in your investment strategy and I’m not saying that sometimes you should not speculate because you get some big wins most definitely but, remember, with speculation, you could lose all your money and that’s very important. So, when you’re investing, don’t confuse investing with speculation and speculation with investing, okay? They’re two distinct things and the market’s going up a lot.

A lot of these small companies are really just getting highly inflated and when that happens, that’s really speculation and it’s a house of cards basically and you don’t know what you don’t know. So, case in point, last week, I spoke briefly for all of like maybe 30 seconds on this company that was called a company. It is a company, it’s a deli and they had $35,000 [0:18:54] sales over the past two years and they became a publicly traded company which you could do and depending on the level of reporting and things like that. So, there there’s like different levels in terms of when you’re public in terms of if it’s listed on the NASDAQ and there’s a lot more oversight, there’s a lot more requirements. Whereas, there’s called over the counter or the pink sheets and over the counter, it’s a lot, it’s considerably smaller companies and pink sheets are even smaller. So, you could definitely have a very small company that is publicly traded. Back when I was about 25, I was looking to purchase a company. I was looking around like $5 million in revenue and a number of things came up. There was one company and I was scratching my head on it. The gentleman and his partner invited me in, I said I was interested in purchasing it, he was talking about a partnership, I think and then I was talking to him and he was bragging that his company was publicly traded and I was asking them, what was your revenue on it and it was literally like $150,000 or $250,000 and I’m like, I’m just shaking my head like why are you doing that? And especially back then it’s just… I don’t even know.

And it’s more of an ego thing, I think, than anything else. You could say it’s to get investors, so on and so forth but you really don’t need that to get individuals to invest but with that being said is you have small companies that could be listed and it varies. So, a while back, it was probably a couple weeks ago, a hedge fund manager, David Einhorn, sent a letter to his investors and he said that this Paulsboro New Jersey company which is this deli is an example of the bizarre and risky investments that are threatening to ensnarl small investors. Right now, a $35,000 company, this was a couple of weeks ago, was worth $100,000,000. So, this thing was pumped up a lot and there was nothing to back it and it was being traded on the OTC or over the counter market and this stock had this designation next to it called CE which meant caveat emptor or the buyer beware. 

So, you know already, when you have something like that, you’re really pushing it and what happened was, they tweeted this out, the OTC market group which carried this stock and said it was caveat emptor. So, they also had next to it, a designation of a skull and crossbones which I didn’t even know they had that which says it’s really very, very risky and there was a lot of press on this and it was called Hometown Stock. So, it was trading a while ago, last year at $4.75. That doesn’t mean anything that it was traded at that like it’s a good stock or anything like that but so, it’s trading at $4.75 and then it was up at $13 and change and again, there was something going on there, nobody knows right now what’s going on but after a while, what happened was that the, Chief Executive of the over the counter market group basically delisted the company. So, that means they took it off, you can’t trade it. So, if you put money into it, I don’t know if you’re ever going to get it back. You might based on… I don’t know but when something’s delisted, basically, you can’t trade it. So, you can’t liquidate it, you can’t buy more, you can’t do anything. 

So, there was some high jinks going on, there was a number of companies that owned it. One is a hell company in Macau which is in China and there was another company, I forget where, in the Caymans or something. So, it was really very hokey and these companies, one of them was owned by like a hockey coach of high school and I don’t know who else but it was just very crazy and very weird and you see these stocks go up and you have the frenzy and you bet on it. It’s like an auction. Sometimes you go to an auction or if you go to an auction, you get wrapped up in the dynamics going on and you could really bid it up. So, same thing is, is that, you chase the number and you want to get in, you want to get in and then it goes up, you’re feeling all good but you really don’t know what’s going to happen after that and that’s the problem and the speculation, again, if you have some extra money, it’s called risk capital that you’re going to lose or you don’t care if you lose, so be it but again keep that as a small percentage of your investment strategy and even on some of these other companies that have really gone up in price, I don’t know how long does valuations can stay. 

Everything from AMC to whoever it is, it’s just you got to watch it. So, please be very careful with your money and be conservative at times and that’s one of the things why I always preach on real estate. Real estate’s a hard asset so even if it goes down a little bit, you’re still in good shape and it’s something you could touch and sometimes really what you could touch and feel and see is a good thing and even when things go down in real estate, they’re going to come back up. Now, there are always those situations where you could say, it’s not or it’s going to rebound slower. Absolutely but if you have good fundamentals, you’re going to make money in it and I always preach that, I always preach for people who invest in real estate, either passively or actively. So, that’s very, very important. The other thing is, is that, right now, there’s a lot of money injected into the economy and that’s another reason why the housing prices are continuing to go up and right now, I think Biden is… I read something where Biden might be giving individuals, every month, some money if you have kids and this thing’s not going to end well, it’s just not going to end well in the end and, again, you could say you’re going to tax the rich, the rich are going to always be able to get out of it. 

Whereas, lower income or especially middle income can get hurt so much because the middle-income people own whatever a house or whatever the case may be, maybe two houses and when things turn for the worse and you’re leveraged by a lot, you’re going to get hurt more than even the lower income to some extent. Lower income, they collect food stamps, I’m not saying that’s good but there’s programs in place but the middle income individuals sometimes get hit even more and that’s just something you’ve got to watch out for, especially in this mark and the way things are going and you might be cash rich and just be careful. It’s always better to buy at the bottom of the market than the top of the market. Especially, if you want like a second home or something like that, wait for a correction or whatever you want to call it and then purchase it. When we purchase things, we are always looking if the market turns around and it goes south. That’s the way we underwrite, that’s the way we look at risk. 

We always expect. We’ll say, okay, it’s going to go down 5, 10%, we’re always looking at that and we’re designing our investments based on that and that’s very important and if you take anything from this radio show and you take a couple of things, it’s always about protecting your assets, protecting your money, being conservative and making sure you make wise financial decisions because in the end, it’s really going to hurt your family and affect them. I’m an expert at, a long time ago when I was young, invested in very aggressive ways of the stock market and things like that. So, I’m telling you, do not buy on margin, do not do any of those things. That’s very, very important. I was hoping, again, to discuss more of margin and the difference in leverage between stock market and with a home but I wanted to talk about this, about the company that is, basically. a deli that’s $35,000 over two years and was worth $100,000,000. I thought that was a good example. 

So, when you’re looking at investments, always look at those things; what it is and strong fundamentals. That’s always the thing. I’m not saying that companies that are smaller, you will get bigger gains, most definitely but even with some of these big companies right now, they’re just taking off Amazon and a number of the big companies but still just be wary of those things. If that’s the only thing you could remember from me. So, before we close out, I also want to talk quickly about one thing and we’ll probably bring it up next time and that has to do with Biden’s tax increases on capital gains. So, not only is the increase in the capital gains tax but normally, if you pass something onto your relatives for like a business or something, you don’t have to pay for capital gains until you sell. Well, that’s not the case. So, you have these mom and pop businesses that want to pass on their business to their family and what they’re going to have to do is, they’re going to get taxed on that in terms of where it’s valued at when the person passed away. 

So, it could be hundreds of thousands of dollars and that could really hurt the business. Might go belly up as a result of that. This is not a good approach. Democrats originally tried to do this back in the seventies and then I think around early 1980s, there was a democratic president, I think this was when Carter was still in office as well as for the house and the Senate and they struck it down because it was just a bad idea and now, it’s getting resurrected again. This is just a really bad, bad idea and sometimes I’m fairly neutral, I try to be but this is not good if this gets enacted. This is really bad. So, I got to close out, Again, if you have a place for Angie, please call me, call me as soon as possible. Also, Mara’s Italian Deli, please stop by it’s in Pinebrook. There’s multiple delis, go to the one in Pinebrook. Theresa owns it, she’ll give you 10% off on lunch and catering and also see Mario at Basilico which is in Millburn. So, again, you could reach us at 973-240-8593 or templarcashforhouses.com. Again, take care, God bless and I’ll talk to you next this week.

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

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