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 August 14, 2021
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. Again, that’s 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 you may have or if you want a certain topic discussed on this 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 homes 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 is going to 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 how we learned from it or we compensated for it. We’re going to 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 ask everyone to do a lot of research on any topic that you need to buy something when you’re investing a lot of money. Please, please do your homework ahead of time, that’s the most important think I could say to you. And make sure you get different opinions on it, whether you’re reading an article or it’s pro for something, get one that says con for something, you got to have a balanced approach to it when you’re making financial decisions, that’s extremely important.
Also, I’d like to do a shout out to some of my listeners, Paulette of Famous Crossing Guard from Livingston, and Tim from Cedar Grove, as well as John and Cindy, also from Livingston. Thank you very much, guys for listening. I’d like to also thank some of my private investors, Nick and Sheryl. A couple other things I’d like to talk about today, kind of important, and it has to do with the forbearance and way things are changing with that. So I really would like to talk about that and, really, if you’re in that situation, please really listen to this and think about the different things I’m going to say.
But before I do that, again, we buy houses for cash. That’s one of our major things we do. We do a few things. We buy houses for cash in New Jersey exclusively. We invest in multifamily houses. That’s another big thing that we do. And then we provide some loans and transactional funding as well. We always work with individuals that want to invest with us in any of our multifamily properties. Please give me a call. We can talk about it. I’ve been getting a lot of calls lately on it. I think maybe people are getting a little worried about the frothiness of the stock market because one point it will change. So I’m seeing more and more people call me on this specifically in terms of investments in real estate. Again, we buy houses in New Jersey.
People ask us all the time, we do say that, and then they still say, “Where do you buy houses in New Jersey? And I always tell them we buy houses in North New Jersey, we buy houses in Central New Jersey, we buy houses in South New Jersey, we buy them everywhere. If you’re going to sell your house in New Jersey, give Templar a call. It’s that simple. Like I said, our market is New Jersey, we really don’t expand out of that, probably in the future we will, but right now we’re exclusive to New Jersey.
So I’d like to also talk to you about a couple other things. But before we do that, let’s get into the mortgage forbearance. So, mortgage forbearance is ending, it’s coming up, and it’s right around the corner. If you need assistance, please give us a call. I can’t say that enough. Right now, lenders, once you come out of forbearance, there’s a lot of additional money that you’re going to owe and they’ll push it to the back end of the loan depending on the situation, or you might have to catch up over a certain period of time, it depends. But with that being said, there’s late fees, there’s other things that happen with forbearance, and when you’re not paying your mortgage, it’s that simple. If you need help, please give us a call, I can’t say that enough, just to talk. Again, it’s just to talk. We could talk about different scenarios. But one thing you don’t want is that you might be behind the eight ball but the longer you push it and push and push it, the worse it’s going to be. And unfortunately, human nature is that we always put things off, it’s just human nature, and I can’t fault anyone for that. But the sooner you tackle it, the better you’ll be, and you’ll at least know where you’re at. Sometimes we say ignorance is bliss, but it’s really not the case when it comes to that. Because you read these articles and they say, “Well, once you come out of forbearance, you could have two options, you could refinance or you could do loan modifications.” That’s not really accurate.
If you’re in forbearance and you couldn’t pay your loan, they’re not going to refinance you, they’re really not, because you can pay in the beginning. So then it becomes loan modification. And with loan modification, what they’re doing is they’re going to take all those late fees and everything else and tack it to the back of the mortgage and then extend it out. So if it’s a 25-year mortgage or a 30-year mortgage is going to be put out another 5, 10 years. And if you want to sell beforehand, and right now we’re at the peak, with the real estate market, say at some point it’s going to pull back, say, 10%. I’m not going to say it’s going to fall off the cliff, but say just 10%. All sudden, you’re not in the same position you are today, and that’s an issue, especially if you need to sell. So it’s really important that you look at things today as they are and possibly sell your house or something to that scenario. Because in the end, if you do a low mod, they kill you on low mods. I’ve seen horrendous, horrendous deals with loan mods, horrendous. You say, “Well, my attorney will take care of it,” they don’t take care of it to the extent that they should. Now, there are some out there that do but most don’t. It’s that simple. Or they don’t even use an attorney. And again, the issue is you could get hit really, really hard, and as a result of that, it could really hurt you. I’ve seen really, really crazy things from the lending institutions on loan mods and what they do and they’re very, very creative. Rest assured bankers are very, very creative the way they do things. They’re in business to be very creative. And when you’re on the wrong side of it, it could really hurt you bad.
So again, if you’re in trouble and you need some assistance, please give us a call. Again, there’s no obligation, we can just talk. But at least that’s the first step, and that’s the big step. So once you take that big step, the rest is a little easier, really is, that first step is really the tough one. So make sure you please give us a call on that.
Now, dovetailing into that is reverse mortgages. So again, in theory and in practice, reverse mortgages are fine, but it depends how you use them. And you really got to watch, because they could really hurt you in the end. So if you continue to — if you’re short on money and you keep drawing on that, eventually it comes to a point where you can’t draw any more money. And, again, I’ll say that again, the market right now is at its top, if it pulls back and it’s only 10%, which is very feasible, at some point if it pulls back, then you might be in a problem in terms of selling the house. I don’t know if you’ll be upside down, but there is one situation where it is.
A nice gentleman called me and he spoke to me for a little bit just explaining that he had a reverse mortgage. And then he said, “I can’t talk anymore,” and he says it’s too painful. He just hung up on me. And then a couple hours later, he called back. He wanted to get everything off his chest and he said, “Right now, I’m maxed out on my reverse mortgage. I still need money. Right now my house is dilapidated and I need to sell the house, but I know I’m not going to be able to sell to where I want to sell it, and I need to get money to buy a smaller place. I can only afford now $1,000 or $1,500 a month.” So it was a really tough discussion. I was going to come out there and then he said, “Nah, this right now too painful. I’m not ready to talk.” And he says, “I’ll try to call you back whenever,” and he just hung up. I let it go at that. I didn’t follow up with him or anything else like that. I wanted him to be comfortable and call me when he is ready, and that’s the biggest thing. We don’t want to push hard and there’s a lot of difficult situations that we handle. It’s very, very important that you don’t really push. And when people are ready, then they call us. Same thing with hoarder houses, a lot of times there’s family intervention in that. And there’s finally a partial realization that there might be an issue, but it can’t be controlled by that person, and that’s understandable. But we come in and again, we don’t sit in judgment. It’s a very painless process, it really is. We’ll work with you in terms of whatever your situations are and whatever your needs are, and we try to meet all those needs. That’s what we do and that’s why we’re here.
So I’m going to close out this segment. I’ll be back shortly. Again, you could call us at 973-240-8593 or templarcashforhouses.com. 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 or templarcashforhouses.com, that’s T-E-M-P-L-A-Rcashforhouses.com, that’s one word. Again, if you need to sell your house fast for cash in New Jersey, please give us a call. We’d be more than happy to help you. Also, if you want to sell through the Traditional Multiple Listing Service, I have great agents on staff that’ll help you sell your house.
So a couple of things I want to talk about in this segment. First is rehab and unexpected costs. This week, we got hammered with a number of things that were just unexpected. One house where vinyl siding, so I had to take down all the aluminum siding, and all of a sudden we look and there was rotted wood everywhere. I’m like, oh boy. My builder sends me pictures, I’m like, oh boy, how much is this going to cost me? And so I was a little taken back to some extent. I wasn’t that surprised. The woman that sold us the house had a number of problems with leaks and things like that. So I’m not totally surprised at it, but I was hoping that it wasn’t as bad as it was. So unfortunately, that wasn’t the case. These things come up and we constantly get hit with expenses that we really didn’t plan for, and that’s part of the rehab game, and that’s why the rehab game is very tough with rehabbing houses. Right now we’re putting a septic system, we’ve been getting quotes back, they’re 30% higher than we expected. So I got to see where we’re going to cut costs on that in terms of what we can do. There are certain things that I was going to have the septic company do in terms of removing trees, things like that, just to make cleaner and simpler and easier for us. But right now, we’re banking on around $40,000 for a rehab, and it’s not going to be that way, so it’s close to $55,000. There’s a difference of $15,000 there, so we have to figure out what we could do and where we could save money and other places during our rehab as well. So we’re not sure right now.
That’s always the game. It’s always difficult and challenging and no day is the same. Every day is different and there’s new challenges that come up all the time. This is one of them, that we always overcome them, and we have a great team of individuals. I got great contractors. Even though last week, I was venting and being kind of not too happy with them, and I’m still not happy with all of them, to be honest. That’s why it’s really a difficult situation for regular homeowners that are dealing with contractors. We deal with them all day long, every single day. I could see how, very easily how a homeowner could just have so many challenges and frustrations. It’s just a very frustrating situation. All sudden, they won’t call you for a day. My guys always call me, except, like I said, lately these guys are just, I don’t know what the deal is, and they’ve all been with me for a very long time. I weed out bad ones very quickly and I keep the good ones for a very long period of time. But some of them have not returned my call for a day or so, which is a very long period of time. Usually they pick up right away, they call me back right away. I call them on Sundays, they call me, they pick up, it really doesn’t matter. That’s why I keep them, because if I need to get in touch with them, I need to get in touch with them. I pay on time and I’m very good to work with. We always solve things together and I don’t get too crazy with them, even though once in a while I’ll push back on them and challenge them, but that’s about it. But they know for the most part we have a kind of understanding in terms of what costs are, so they know where it is, I know where it is and I don’t have to debate anything.
So the question is, sometimes when I have to bring on a new contractor, then we have to go through this dance and we got to feel each other out and figure out where everything is, and he’s got to understand where I’m coming from and vice versa, of course. But he really needs to understand my cost model and what I’m expecting and my expectations in terms of delivery.
Another thing that happened this week is I saw a house, it was in the Clifton area. A gentleman called me up a few weeks ago, he said, “I’m going to be up here, Joe, helping my sister-in-law clean out. We have to move her down to South Carolina. She’s starting to get dementia and we want to exit the house. We’ve dealt with homebuyers before and flippers. We had a good experience previously down in South Carolina, and we’re hoping you could do the same.” I spoke to him and I told him that I’m listed with the Better Business Bureau, and he said, “That’s one of the reasons why we picked you.” It was that simple and it’s smart and it shouldn’t be that way. That’s why we did what we did with the Better Business Bureau and working with them and being authorized through the Better Business Bureau.
So I went to the house. He said, “Please excuse it, it’s not where it should be.” I said, “Don’t worry about it. I’m not going to judge you or anything else like that.” I went in, I was pleasantly surprised, everything looked really — wasn’t in bad shape. It was dated. There’s wood paneling everywhere and things like that, which people don’t want now. But again, it was a really fairly neat house. It was neat. It’s not fairly neat, it was very neat. But I spoke to the woman, she had early signs of dementia, and I couldn’t tell that but she was very sweet. And she says, “I’ve been here for 50 years and it’s tough for me to leave.” Of course, you’re going from New Jersey down to South Carolina. Now that’s a cultural change right there, let alone leaving your home. I said that to her. I said, “I know this isn’t a house, this is your home. There’s a difference between a house and a home, and you’ve been in your home for 50 years.” And she said, “You’re absolutely right, Joe.” And that’s the thing, it’s a tough situation to leave your home when you don’t want to and you’re not ready to, but you have to. So I think we’re going to be able to purchase that house and we’ll put that up and fix it up and resell it. But yeah, it’s nice to be able to do things like that.
I met them, the gentleman and his wife and his sister-in-law. It was just good, I love meeting new people. And then you know, of course, they were saying, “Well, where are you from originally?” I said, “Well, I’m from Newark.” And they said, “Where in Newark?” I said, “On North Ninth Street.” And the woman says, “Yeah, I was at North Seventh Street,” and we’re talking about old times in Newark. They’re Italian, too, so we’re reminiscing on all the places to go to eat and between Dickey D’s for Italian hotdogs and the Belmont Tavern and so on and so forth, and how much they miss it. And I said, “Yeah, that’s why I never could leave, really, I just couldn’t”. I’ll always be here in North Jersey. I love North Jersey. My roots are here and I’ll always be here. It’s that simple.
Next thing I would like to talk about is really interest rates. Interest rates are still continuing to stay low, which is good, and they’re at record lows or very close to it. They’ll probably continue probably at least till the end of this year, mid next year, like I said, a lot of it depends on the inflation. So I was seeing some reports that they said that inflation has eased a little bit, well, we’ll say, I don’t know about that, again, I’d be very wary of that. One of the things part of inflation is fuel prices. Gas is a lot higher, they said — I forget what the number was, they said 40% higher than when Trump was in office. I don’t know if that number is exactly accurate, because I didn’t see how they derive that number. So I just play caution to that percentage, but it is higher, it’s definitely considerably higher.
One of the things that President Biden said is that with the fracking, it’s going to not do any new leases, so on and so forth, and we’re net energy independent. And as a result of that, he was pushing on all the other environmental friendly or so called friendly technologies, but we’re still dependent heavily on oil, it’s that simple. And now, he was pushing on OPEC just yesterday to increase production. So it’s kind of a little comical there, because we were energy independent, for the most part, and now we have to rely again on the Middle East. So with that, there’s increase in fuel prices and that translates into fuel prices for everything, from transportation of eggs and everything, it doesn’t matter what it is, lumber, or whatever the case may be. That’s going to still impact and affect inflation. It’s that simple. So it’s just not this easy thing to just convert over to all electrical power and case closed. There’s ramifications associated with that. And as a result of that, once we start getting inflation, who knows what that’s going to do. That’s going to put a drag on certain things. We’ll see where it goes. We don’t know. There’s just so many things in the air between right now, we have, it was 10 million jobs or something, I think they said that need people. But there’s also high unemployment because people don’t want to go back to work. So that’s really a challenge by someone out to dinner or his girlfriend to this one place up in New York. The woman says, “I can’t get people. I can’t get a cook, I can’t get this. I can’t get that, and we’re trying to do our best.” So again, the restaurant industry is going to continue to get battered.
We have the COVID variants that are coming up, and that’s potentially going to impact things. I was talking to someone that lives in the city and she says, yeah, it’s impacting it again and even with people that are immunized. And so we’re going to see where things go, but there could be a lot of drags. Now again, the government could continue to print money and give free money out, but one day you have to pay the piper, it’s that simple. Not everything could stay high and inflated all the time. So when something happens, it will be extreme, and that’s the thing. So be wary of where your stocks are, and always protect your gains, make sure you protect them. You have September coming up, September is they call it the September effect. A lot of times, there’s always a pullback in the stock market, and it’s an anomaly that always happens throughout the world in September, if you look at it, of course, over X amount of years. But right now, I think things are still going to be fine, but this inflation issue I think is going to hurt us in the end between rents and everything else.
So I got to close out this segment. I want to thank you very much, have a really nice weekend, a safe one. You could reach us at 973-240-8593. Again, that’s 973-240-8593 or templarcashforhouses.com. Thank you very much, everyone. God bless, take care of you and your family. 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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