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 June 5, 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 can 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. Again, that’s 973-240-8953, and we can answer any questions you may have, or you could email us from our website with any questions you would like to discuss on this show, or any questions in general.
For my 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 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 will 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, some of our investments, what went well, what did not go well, and especially, how we learned from it and overcame those problems. 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 that you know as much as possible about it. I gonna provide you with my opinion, it’s only my opinion. I ask everyone to do lots of research in anything they do, and always double, triple check everything. I always say, it’s always good to get recommendations but remember, when you get a recommendation from a person, just don’t get a recommendation, ask lots of questions, because what’s gonna happen is, if you like the person, it’s great, but if you don’t like the person, it might affect your personal relationship with that person that’s giving you the recommendation, so I’d ask you always to do lots of research, and ask lots of questions about that person, or the service, and make sure you peel back the onion, and “Are they timely? Do they communicate?”, so and so forth. That’s s extremely extremely important, and I can say that enough. I’d like to do a shout-out to some of my favorite listeners. I have, of course, Livingston’s Famous Crossing Guard, Polette, and Tim from City Grove Water Department, also I have Barbara and Don, and also John. So, hey guys.
Next thing I’d like to talk about is… Again, if you’re interested in selling your house fast, and you need cash immediately, please give me a call. Sometimes, the reason why you want to sell your house fast is just, there’s a lot of maybe, bad memories. So, I just purchased a house, or it’s under contract from a widower. So, for her, there’s just a lot of memories at the house, and she really just wants to get away, to reminding of her husband, and it’s just, it’s really just bothering her. And, the place needs some work, and it’s just easier for her, and her grandson, “Just sell it to an investor.”. So, you know, it really depends on the situation. Sometimes it’s because of medical issues, and you need money for that, sometimes it’s for a crazy neighbor. So there’s a gamut of reasons why someone wants to sell their house fast for cash. Sometimes you have an inherited home, or sometimes it just goes into disrepair, and you know, under any of those circumstances, or whatever the case may be, we’re always here for you. And also, if you want, we could always list it through the traditional Multiple Listing Service, that’s always an option. And, I could have one of my staff members come by, and take a look at it, run the comps, and then talk different scenarios. One of the things that we do recommend, depending on the time of year as well, where the market is, whether you should invest money in the house, or you should not. Right now, for the most part, for the most part, we’re not recommending you put too much money into the house. On other situations, we’re saying, “Just invest another, if you could invest 5,000, or whatever the case, even a 1,000 sometimes, you’ll get it back twofold, fivefold, tenfold, really depends.”. Especially, some paint, that’s always something that brightens up a room and makes it a lot cleaner. Through the years, paint becomes dingy, fingerprints on the wall, so on and so forth. Just even a coat of paint, they always recommend it, and it’s always a good recommendation to do things like that.
Also coming up, hopefully within the month, I’ll be having certain sessions in our office. We do have private discussions in our office all the time, but it’ll be more formalized, where someone’s interested in investing passively in real estate. We’re gonna be giving some classes out in terms of what to do, and what not to do, so you are successful. It doesn’t matter if you’re gonna invest in us, or someone else. We always like to give this out and make sure that people are protected. That’s one of the things that, really, the foundation of who we are, and what we drive for, is to make sure that people are educated, and they make good sound business decisions when it comes to real estate. That’s paramount to us. I hate when I hear these stories of people that have invested with individuals that don’t have a track record, and then they’re trying to get their money out, and they can’t, and it’s just one big mess. It’s just, I don’t know what to say to that. And, you know, you can’t go after something that has, you can’t get blood from a stone, basically. That’s really the situation sometimes. Individuals that did one house, or two houses, and they’re looking for private funds, and someone talks them up and before you know it, someone else invests, and they purchase a house for too much money, their contractor belled out on them, and they’re stuck with the house that’s partially rehabbed, and they can’t sell it, they can’t fix it, so on and so forth. That happens all the time. There’s a lot of times where someone comes to us and starts a construction project and then they realize that it’s more difficult than what’s on TV. They might have even done a house and fixes a few things up, and they were fortunate to make some money, and then they said “Okay, we’re gonna go further into it”, and then they have something that’s a bigger project, where all of a sudden they run into problems upon problems upon problems. And then all of a sudden, they’re underfunded, and they can’t complete the job. That’s one of the things with us is, we’ll fund it, and you don’t have to worry about that. We’re very conservative in terms of the way we underride or determine the project, and the cost of it, what we could sell it for, and you know, the total effort. And you know, we run things through a lot of spreadsheets, and we’re always doing different projections based on where the market’s going, where it’s changing. But we always have a conservative number as a worst-case scenario. And that’s how we look at it from a risk perspective, and that’s very very important. Some individuals, when they’re purchasing a house, they’re always saying “Well, it’s gonna go up again another 20,000 dollars.”, and you can’t really, you can’t be doing that. It doesn’t matter how strong the market is, that is not the way to analyze an investment, underride an investment, and really jump into an investment. That’s extremely, really bad. I can’t say it enough. That’s really bad if you do that.
And you know, that’s the problem, last year, towards the end of the year, I wasn’t buying as many houses. We’re being a little conservative. So we bought a number of houses, but not as many as we normally do. And we wanted to make sure that it was purchased at the right price, and we can sell it. Conservatively, in case the market went south. That’s the biggest thing, you don’t when the market’s gonna go south. You don’t know if it’s gonna be a black swan event, you don’t know anything. You don’t know right now if, you know, interest rates start going up for some reason because of inflation, and all of a sudden, things start drying up. You don’t know. You always gotta factor those things in. And that’s why, I always, like the way we look at things and make sure that we’re safe, and our investors are safe. That’s extremely important, and that’s why I always say in the beginning, we do not speculate.
Speaking of speculation, you know, speculation isn’t bad. If you know you want to put in a certain amount of money, and you could potentially lose it, and that’s the big thing. I don’t speculate on real estate, we just don’t. We don’t speculate in my business at all, in terms of any of our investments. But you know, I know a lot of people that wanna go into crypto, and all those Bitcoins, and Dogecoins, and all these other things, that’s very speculative, and just be wary if you are gonna put some money into it. Think of it as, “Okay I could lose a 1,000 or 2,000”, or whatever thousand it is, think about that. And if you’re fine with that, that’s all well and good. But you have Bitcoin where, all of a sudden, Elon Musk talks about it and says that he’s gonna purchase, Tesla’s gonna purchase some, and Tesla’s gonna accept Bitcoin, what happens, it goes through the roof, it starts going up. And then all of a sudden, he’s saying, this is just months later, it’s not like years later, months later, “Well, Tesla’s not gonna accept Bitcoin anymore.”, and he’s not, he didn’t say he’s not bullish on it, I forget what words he used. Now Bitcoin’s going down, and it’s lost considerable value as a result of it. It was up at 60-something thousand dollars, 60-something thousand dollars, and now it’s down considerably because of that. And, you know, if you want an investment like that, where someone says something and then goes up, or goes down, well then that’s good. But, that’s not my type of investment, and that’s not one for my family and my future or, I think, any of my investors, private investors, none of them. So, just be wary of that. It just gets me crazy when these things go up, and people jump into it, and say, “I’m gonna start investing in crypto”, and you know, they’re putting considerable money into it. Of course, again, it’s risk, so you could make tons of money on it, and it’s gonna go up to a 100,000 dollars, and you bought it a 9,800 last year, that’s great, and I’m happy for you. But again, just be wary of the upside, and the downside, specifically the downside. Be more conscious of the downside. Obviously, it could run up to whatever, 200,000 dollars, who knows. But, you know, if you’re willing to lose that money, then that’s okay. So, we’ll just close in, we’ll close out on that. So, I’ll be right back shortly, and we’ll pick it up in a few minutes. Again, if you want to give us a call, you call us at 973-240-8593, or templarcashforhouses.com. See you in couple.
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.
So the next thing I’d like to talk about is one of the houses we’re in the process of purchasing. I was telling you about one of the, there was a widow, and she wanted to sell her house, and she didn’t wanna deal with agents, and there was some disrepair in the house, it wasn’t too bad, but still, there was some issues. And, she wanted to sell it quick. She was very apprehensive about this, because she just wants to move on. There’s a lot of memories in the house with her husband, and she just wants to leave the house, and just move forward, and her grandson is helping manage the estate, and you know, we went under contract, it was pretty easy and straightforward and most of the time, the contract, and attorney review process is very very quick and easy because we’re gonna take all the liability in terms of what the house is, and we’re gonna accept it as is. There’s not much to it in terms of attorney review. Sometimes, the attorney wants a couple of things, we almost always say yes to it. They’re usually not unreasonable, and even a few unreasonable things we’ve heard, “Okay, that’s fine with.”. But, it went quick, and we’re right now, in the process of doing different inspections, we always do inspections. We don’t do is use that inspection to nickel and dime a person to change the price that we gave them. That’s extremely important, it’s only on major things. So if there’s a structural issue that we didn’t know about, then we might have to have a discussion on that. Or there are termites we didn’t see, and the inspector catches it, and there’s lots of damage to the wood, and the structure itself, well then again, we might have to have a discussion on that and see about certain concessions. But holistically, there’s usually, it’s accepted as is, and I just you know, just have to accept it. We factor certain things as a result of that. We went through a couple of inspections, we went through the internal house, standard inspection, inside, outside, and again that was, we knew there were some problems, there were no surprises, and if there was, again, if it’s not a major surprise, then it’s fine. We also, because it’s well water, we had to do a well test in terms of the water, and that’s coming back. We’re hoping and expecting not to have a major issue with that. That could be a potential major issue.
The other one was their septic system. I hate septic, and I always shy away from them, but we do, do houses with septic. They’re just a pain in the neck. This one looks like it failed almost every single possible thing on the inspection list. And so, they’re gonna have to, it’s gonna be a system that needs to be replaced. And I’m concerned, because I haven’t done it a little over a year, and I’m not sure how long it’s going to take. Also, the seller’s gonna have to give some concessions as a result of that, because we did not factor that in. So, we are concerned about that, that’s major thing that could easily go for 40,000 dollars, 50,000, so that is a problem. The other thing that occurred is that they had a solar. Solar’s good, I have no problems with that. But, it’s a lease, and my partner requested the contract. So I get the contract, and I’m reading this thing and I’m going “Holy mackerel, this is a bad contract.”. And they entered into it in 2017, and I, it is so bad, and I don’t know if the company, the solar company, was just preying on these people because they were old or what, because, it is, it is horrendous, and I looked at that thing, and what it is, is basically, they’re leasing out the solar panels for 20 years, and they’re saving per month, like 20 dollars, just estimating, 20 dollars. And, on top of it, really when you have solar and you purchase it, you get the tax credits associated with it. Well, the solar company is also getting the tax credit, sadly. So, they’re not benefitting any way possible, the home owners, and as result of it, if they sell the property, they have to either take what’s left of that contract, and it’s a 70,000 dollar-contract, it’s only been in there for 2 years, 3 years, 4 years, whatever, there’s like 60,000 dollars left in the contract. Or the other option is could have the buyer, which would be us, to take over the lease, but we have to go through a credit check, which we don’t have a problem with the credit check, but then we would have liability of it. Now, we’re not gonna keep this hours, more than 5 months, so the liability will be on us, and the same contract would be in fact, basically. And then we would either have to purchase it outright which will be probably about 60,000 dollars. Or we’d have to have someone that’s buying the house, really want that solar panels, and they’re not gaining anything out of it. Whereas, they could purchase a new system, and they get the tax benefits of it, and you know, will be considerably less. So it’s not a good situation, you know, I spoke with the grandson, and I said basically, “Sell the house”, originally he said, “Well, I guess my grandmother gonna have to pay for it.”, I was like, “There’s no reason why she should be paying for this.”. This was very exploitive. There is no good that came out of this, and it was only for the solar company. The other thing is this is that every year, the contract goes up. And, what’s really about that, so it starts out at around 200, 250 possible, and goes up to 480 dollars or something over 20 years, and what else is bad is that, as time progresses, those solar panels become more and more inefficient, just like a battery. You do a rechargeable battery, as time progresses, it doesn’t hold the charge as much. Well, there’s no difference with this technology, it doesn’t absorb the light as much, and it’s not as efficient. So you’re paying more, the efficiency is less, and then you’re gonna have to pull stuff off the grid as a result of it, for what it’s not using, the inability of it to work efficiently. So there is nothing good in this contract. I sent it to a buddy of mine, which has a solar panels on his roof, and he said “Joe, you just made my day.”. He says, “I thought my contract was bad”, and he didn’t really have a bad contract, but you always think you have a bad contract. And he said, after he said, “After I saw this contract, holy mackerel. There was nothing good out of it!”. So please watch these, you know, these contracts, what you’re getting out of it, and what you’re not. You know, I told the grandson for this is basically “Sell the house. I’ll give you the money, and afterwards, I’ll talk to the solar company”. They could potentially try to go after the estate, but there’s not gonna be anything in the estate to go after. So, you know as they say, let them pounce sand. This was just an exploitive contract, and it infuriates me. So I’d be more than happy to call them up and say, “Either we renegotiate, or you take these things off my roof, and take them off within the month.”. So, I’m looking forward to that discussion, if that does occur. Because it’s just, it was crazy, and I’ll make sure that the contract is in my favor, not theirs. That, I guarantee. So, I’ll keep you posted on that one. Because that’s just, again, I think it’s close to criminal, in terms of what was going on there, criminal.
The other thing is, is we were starting a rehab in one of our houses, and we started doing demo. Whenever possible, I always like to use family members, friends and family members on certain things. Of course, they gotta, I have expectations, so they know that, but you know, demo is an easy straightforward thing to do, so I had my son and his friends doing demo on of the houses over for two days, and you know, they did a great job. And you know, anything that they didn’t know how to demo was basically, look at the Youtube. Again, it wasn’t any type of finish work or anything like that, where I needed someone that had a skill set associated with it, that’s been developed over time. When I could, I’d use them, and when I can’t, I can’t. But you know, it was good seeing my son. Glad he’s back from college, finished with college, just passes the nursing exam, which was very happy with, I knew he was gonna do that. But him and his friends were using sledgehammers and everything else to take off molding, remove tile, and everything else associated with the kitchen. You know, one of the things he was having a lot of problems with him and his friend was the bathroom. So, all the tile had, underneath, like a coat of, almost cement, and a wire mesh, and it was horrendous getting it off. That’s the thing, when you start opening these houses, you don’t know what you’re getting yourself into. And in the walls itself, there was like a concrete also, and it was wrapped around pipes. He had to, it was just horrendous, he had to go to the other side of the other room, to go through the bathroom, it was just, it was horrendous. It took him hours upon hours to get rid of all the tile, and bring it down to its studs, which I don’t always do, most of the time I don’t, but with this house, it just seems like, there’s like one can of worms after another. There’s another room has like this cement board, it’s not really a cement board, it’s really, almost like a cement, and that’s all has to be broken up, so it’s just one catastrophe after another, it’s just, it’s crazy. But, that’s the name of the game. Not to mention, as I always say, the lumber prices, and the material prices. So last year, a year and half ago, or a year and quarter ago about, we were, let’s see, yeah, a little over a year ago, in January, we were getting doors, and door jambs in the entire system with the door at Home Depot for 65 bucks per door plus the jamb and everything, and right now it’s like a 109, or 110. So I’m just beside myself with the material cost, how much they’ve gone up, almost literally, a 100 percent. So our budgets are getting stretched a little bit, but again, you have to work smart, and have to figure out different alternatives, in terms of what to do, and what you’re not doing. It’s not going to be that bad because the price have gone up considerably. And we’re very very conservative on this, we could have an extra 100,000 in terms of the selling price on this because I was so conservative. I’ll make out in the end, but some people won’t. So I gotta close out the session. Thank you very much for everything. You give us a call at 973-240-8593 or templarcashforhouses.com. God bless, take care, and have a nice weekend, bye.
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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