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 July 3, 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 could answer any questions you may have, or you could email us from our website, again to ask any questions, or if you want something discussed on this radio show.
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. We’re not a brokerage, and I’m not a real estate agent, but I have individuals on staff that are agents that could sell your house through the traditional Multiple Listing Service. This show’s gonna over everything there is about real estate and those things that impact real estate. We will talk about our rehabs, some of our investments, what went well, what did not go well, and how we learned from them. Real estate is one of your biggest investments, so it’s important you know as much as possible about it. I’m gonna provide you with my opinion, it’s only my opinion. I ask everyone to do lots of research, in terms of anything they want to do, in terms of a service they want to use, a person they want to provide or work with, it doesn’t matter. Always ask lots of questions.
One of the key questions I always tell everyone is that you have to ask individuals “What happens, you know, give me examples of when something did not go well”. Now, if they say, “Oh everything’s always gone really well for the most part”, then they’re lying, that’s not the case. You know, all the time there’s always issues that crop up. You know sometimes all companies have to rely on other individuals and even if it’s an individual within their company, sometimes there’s problems. Sometimes people get sick, sometimes there’s other issues, you know, you never know. So, for anyone to say, “Oh there was no problems,” or, “there was never a problem,” that’s crazy. It’s like using an accountant and possibly his computer went down, and it had all the information on it or something like that, you never know. But you have to ask those questions and you have to see what the response is as a result of that. I’ll also like to do a shout out to some of our listeners, Polette, the famous Crossing Guard from Livingston, and also John and Cindy Ty. I’d like to also say hi to Timmy from City Grove Water Department. Hopefully everybody’s doing well, and thank you very much for listening. I also want to wish everyone a happy Fourth of July weekend. Last weekend I couldn’t record, I was in the middle of a thousand things and I wanted to make sure that I provided good content and my head was just in ten different places, and I didn’t feel that I could provide a good radio show and so I unfortunately skipped last week. But I was thinking that with my tight schedule sometimes, I’m thinking of recording some additional filler shows in case, I can’t make one for a particular reason but I try very hard, and most of the time I do have one almost every week. Right now we’re at sixty-eight shows over the last year or so. I can’t believe I’ve done so many shows. I didn’t think I’d last through twenty shows, let alone sixty-eight. So I’m really happy about that and I’m happy about those individuals that had given me compliments and told me that they liked the show, so I’m happy for that as well. Again, if you need to sell your house fast for cash, please give us a call, either myself or individual stop by from my team, they’ll give you an offer, sometimes it depends if it’s that day or a subsequent day. After that, if we agree upon a price, then you pick the closing date, the only thing I ask is with the closing date stay, or within two months. Reason is, things change a lot in this economy, especially with the way things are now. I don’t want to set a price and again, it could go up, it could go down, so I don’t want that, but I’ll work with you under any scenario, even if it’s six months out we could put something together and then we could revisit it later. I just don’t want someone to feel that if the prices go down, I’m trying to take advantage or we’re trying to take advantage of anyone, so that’s why I’m always leery about giving prices after a couple months out but closing. But sometimes it does, sometimes I’m fine with it. It depends on the house, it depends on the location, it depends on a lot of things. So just give us a call. Second thing is that if you want through the traditional Multiple Listing Service, please give us a yell, I got a crack team of individuals that are very good at selling through the traditional way. And also if anybody has any large apartment buildings or groups of properties they want to close on or want us to purchase, we’d be more than happy to look at it and put an offer in. So please give us a yell on that. Especially something that has multiple properties, we’re very anxious to purchase groups of properties, we do that all the time. We’re working through one right now, that’s five houses. My inspector, ’cause we always inspect everything and it’s more so when we do the rehab, but we want to make sure there’s no major structural issues or termite damage that’s substantial. Besides that, we buy the house as is, and we’ve barely rarely, even if there’s some structural issues and we know about it, we’re not gonna come back and change the price, it’s when we miss something and it’s major, very major. So we have right now, a group of houses that have everything from buried oil tanks, to tanks that were decommissioned but they weren’t done with any permits. It’s one set of houses, it’s just unbelievable, and there’s some structural issues, so we had my inspector go there, he looked at all the houses, wrote everything up, and then we sent him to another house we’re closing on, and he called us back and says, “Joe, there’s a problem,” I go, “What’s the problem?” He says, “There’s hardly any problems with this house.”. He says, “I don’t usually see that from you.” And I started laughing and I said, “yeah, I guess once in a while.” So, most of the time we buy a lot of houses that have a lot of problems with, but we buy all types of houses. Some that are immaculate condition, down to something that needs lots of work. So the next thing I’d like to talk about and I brought it up briefly is when things go sideways. So I don’t have too much time in this segment, I’ll probably span over to the other segment. But we had a house I talked about previously from a widower, and a nice lady, her grandson’s the power of attorney and again, really nice guy trying to help his grandmother out and we were in contract and as I’ve said before, there’s attorneys that are deal makers and there’s some that are deal breakers. So from the get-go we just had lots of issues with this one attorney. Most of the time things go really smooth but you get some that I don’t know what their problem is. First he wanted excessive money down as a deposit and we weren’t gonna do that. Then he had issues because we’re using lines of credit and I said basically is that, we have money in the bank account but we use that, just a small portion of it because we had deals coming in all the time, and we’re very protective of what we have in our accounts because I never know when I might have like six properties I might purchase at one time. So he was pushing back on that and I said we have a few million dollars, four million dollars in lines of credit. And finally, he said ‘okay’ on that. Then after that, we had issues with the septic. We were under the impression, and so was the owner that said the septic was fine, even though it wasn’t replaced in fifty years, literally. So we had an inspection on it, it failed miserably and we submitted that to the attorney, the attorney said it was very vague, the report, which it wasn’t. He wanted to give us ten thousand dollars as a credit and I went back and said, “no, that’s not the case. We need the full amount.” Again, he said it was very vague, the report and I reached out to him, or my attorney did and says, “okay then you could have another inspector take a look at it, you could speak to the other inspector that did look at it.” But he didn’t do that, and then he went up to twenty thousand and then he was going to cancel the contract, I guess he was trying to strong-arm us. I spoke to the grandson and he said, “I don’t know what he was thinking,” and I believe that. We said we want to both consummate this deal, so we came to an agreement, it was gonna cost approximately forty thousand, I said if it goes over forty thousand I’m gonna eat it, eat the difference, and if it’s under, I’ll give your grandmother the difference once I find out how much it’s gonna cost because there’s engineering associated with, there’s a bunch of things when you’re putting in a septic that you need to do. So they have to do a design and all the engineering and what type of septic you want, so on and so forth. So, you really don’t know until all the engineering’s done and that costs a few thousand dollars, plus the survey, so there’s a lot involved beforehand. So we finally agreed upon that, and then there was a problem with the solar panels on the house because the lease was a horrendous lease. The elderly couple was taken advantage of and it required that the seller had either purchased the lease, which had sixty thousand dollars on it, or we had to purchase it, basically, and go through credit and so on and so forth but I wasn’t gonna do that. Not because of the credit situation but because it was just a poorly written lease, and it was just horrendous. So we pushed back on that, finally the attorney said okay and I told him, and I told the grandson that basically we should probably default on it and then we’ll ask the solar company to take the panels off or renegotiate a deal, then absolve any liability from the estate of the widower, and they liked that. Anyway there wasn’t gonna be any money left in the estate, they were going to transfer it out to the seller. So the solar company could’ve went after the estate but there wouldn’t have been anything in it. And I was fine with that because they took extreme advantage of this couple, extreme advantage. And that’s one of the things you really gotta look at, the solar contracts, some of them are horrendous, so we finally resolved that. So I’m gonna have to close out this segment, we’ll be right back. But if you need anything please call us at 973-240-8593 or templarcashforhouses.com, 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, or templarcashforhouses.com, that’s T-E-M-P-L-A-Rcashforhouses.com, that’s one word.
So as I was saying in our previous segment about this deal, and issues between the attorney and just some other stuff that came up that things went sideways on. So again, I know the attorney’s looking out for his client but certain things were previously agreed upon by myself and the grandson, and in the end they came back the way we wanted them originally and what we really negotiated. One of the things is that when we put the contract together, they put a close date, which we were happy with and we just changed one word and 17:58 we set on or about, because there are times when things crop up and you can’t close on a specific day. There are certain situations where we have to close on this specific day and it occurs. But more often than not, if it doesn’t close on a specific day, it’s not a big deal. So what happened was, that we were supposed to close, I think it was on a Tuesday, and we didn’t get confirmation from the lending institution and things started getting close to the day of close and the attorney called my attorney, spoke to my paralegal and they said, “We don’t have the funds yet because it hasn’t been cleared.” The attorney got upset and said, “Well it’s supposed to be today,” and he said, “It can’t be,” and they said, “Well we’re gonna issue a time of the essence.” Time of the essence is basically saying, “Okay the clock starts,” even though technically it started before the close date but there is breach of contract is time of the essence, and in New Jersey, it’s about ten days. And after that you’re in technically breach of contract, they could take the money, but you could always fight that, it’s just not a simple thing but you really don’t want to be going through that scenario and then challenge it in court and all those other things associated with that. And in the end, you want to make sure that the, your client and the seller is happy. So, we were in touch with the lending institution numerous days, weeks before, and everything was tracked until the last week or so, then we had all these issues, we had some things with the septic where we had an addendum that was sent over to the lending institution. Unfortunately, they hired an appraiser that was really over head in terms of what she was doing and she had a lot of problems with interpreting the contract and she was interpreting it incorrectly, and then she wanted additional time for the appraisal, even though she had it for three weeks, it was just crazy how long she had it. In normal appraisal, if you sit down it might take six hours, seven hours, eight hours, excluding the trip out to the house. So it was taking a really long time, then she said she didn’t have enough houses to do a proper comp and then she wanted to do a different type of appraisal and the lending institution pushed back and said, “you don’t need that,” because originally they told us that and we said “That’s not needed.”. And the lending institution pushed back on that, then she promised the appraisal the day after we were supposed to close, and that came and gone, and then I was getting kind of very crazy, to say the least. So I talked to my partner, and we have multiple lines of credit and I said, “let’s contact this other institution,” and they do appraisals, I said, “how quick can you get us a close?” They said about seven days, I said, “okay that sounds good,” and they don’t do regular appraisals, they do desktop appraisals. So there’s two types of appraisals, there’s one where an individual goes out, walks the property, goes inside the house and goes back to the office, looks at the comps in the area and a lot of other factors, that’s a standard appraisal. Desktop appraisal is the person never leaves the office, he receives pictures from us, and then based on the pictures, and then, the same information that a normal appraiser would do in terms of going on to the internet looking at certain things, pulling up comps, so on and so forth, so there’s a little difference of that. And we were asking this lending institution, “can we do it?” and they said, “just tell us when.” We had this one lending institution ready to go, and this other one where they’re getting frustrated with the appraiser. We are frustrated with the appraiser saying, “okay, what are we gonna do, should we go with this other company, or should we stay with this, they can’t promise us the appraisal’s gonna be done, it’s gonna be gone.”. There was a lack of confidence on my side and on my partner’s side, and we kept giving them deadlines, “When is this gonna be? You should have it by this time,”, they were giving us deadlines and kept passing, it was just a mess. And then finally, they said the appraisal came through and after that we closed in a day and a half. It came at like two o’clock, and a day and a half later we closed finally. But I was frustrated, the attorney we were working with was very frustrated, the sales rep, the account rep at the lending institution was frustrated, the project team at the lending institution was frustrated, everybody was frustrated. I assume the appraiser was frustrated too, forgetting all the pressure, but it was ridiculous how many times, it was three times that she missed her deadlines, and those were deadlines that she had given, and she missed them. It was just bad. But the thing is, is that we had backup plans as a result of this, and we knew if this was gonna fail, or who knows what would happen, I didn’t even know if she was capable of doing an appraisal, and it came back okay. We weren’t sure which way to go. But, we had alternatives, and that’s what we look at very closely, is we’re always looking at risk and what the alternatives are and we always have backup plans, in the events something goes sideways. And we were all relying on this one person, I had a group of professionals just relying on this one person. Lending institutions only pay these appraisers a few hundred dollars, and they might spend basically eight hours, ten hours, it depends. They have to go out to the house, so it’s driving, walking the property, taking pictures, so they might spend eight hours, ten hours, I’m not sure, it depends on the person. But so, it chews up a lot of their time and they’re not getting paid a lot of money. So sometimes the quality of the individual doing this is not the highest quality, it’s just the way it is. I’ve had some really good appraisals and appraisers, but I’ve had some that were really not good at all. But that’s the way it is, we’re all dependent on that. And for us to do cash deal, we could definitely use the money out of our bank account if we have to, and that’s what we were gonna probably have to do, in the event that it came close to day ten, and we were still waiting. So we had two backup plans, one is to use the cash on hands, which we had more than enough to cover it, or to use a second line of credit for this. So, either way we had it covered, it was just we were going through a lot, we didn’t want the seller to be frustrated and I don’t know what the attorney was saying but the attorney was probably just talking to the power of attorney, the grandson. He was insulating his grandmother a lot, which was good because there was just, things going back and forth with that attorney that it was just very frustrating. They hung up on my paralegal and they were just totally unprofessional and just horrendous to work for, or with. So that’s where we are with that, but we overcame it and that’s the biggest thing, that is the biggest thing, is to rise above over these setbacks and all organizations have problems at some time, not because they’re not good organizations but you’re depending on people. One time, I was up for a business trip in Connecticut, it was at the end of the night, I was sitting at the bar having something to eat and I was talking to a gentleman, he was doing importing from China and he was frustrated and in terms of the quality and a couple other things, I said “What’s your biggest problem?” and he said something else, and I said, “That’s not your biggest problem, that’s not anyone’s biggest problem.” The biggest problem anyone has is people, because in the end, technology or anything else, there’s always problems with that, but it’s people. And depending on a particular day, someone might’ve had a bad morning or something tragic could’ve happened, or any type of scenario, and it’s gonna impact work, that’s just the way it is. You never know when you’re a manager or a leader, when people come in, what’s gonna happen, or what they went through. And it’s how you overcome those and how your organization understands those and is able to go around it and help that individual as well as to ensure you that have proper service. It’s always a balancing act, but in the end we have a great team, and I’m very proud of it. And if there are problems, we come to and rise above those problems. So I’m gonna have to close out this session. Again, thank you very much. Again, if you have to reach us 973-240-8593 or templarcashforhouses.com. Have a great Fourth of July, God bless, and take care everyone. 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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