Templar Real Estate Radio Show Transcript 2-29-2020

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 29, 2020

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:

Hi, this is Joseph J. Zoppi and welcome to the Templar Real Estate Investment Show. I’m a real estate investor, consumer advocate, author, and managing partner of Templar Real Estate Enterprises. You could reach us at templarcashforhouses.com or call us at 973-240-8593 and we could answer any questions you may have, or you could email us from our website, and we discuss any type of topics you want for the show.

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 or gap funding. We work with individuals that want to invest with us in single-family houses all the way up to apartment buildings. We do not speculate and we’re very protective of our money and our investors’ money. I am not a real estate agent. There is another individual out there that has the same name as me but he’s an agent, I’m not. I have individuals on staff that are agents that will sell your house through the traditional Multiple Listing Service, but we’re not a brokerage.

This show will go over everything that there is about real estate, those things that impact real estate. We’ll talk about our rehabs, some of the issues we’ve had, some of the things we’ve learned from them. 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 kind of important that you understand as much as possible.

I’m going to provide you my opinion, it’s only my opinion. I ask everyone to do their research on everything that we talk about, that your attorney’s talk about or your CPA or anything else. I always, always recommend you double, triple check everything because you get different opinions and it’s always good to see the other side when you’re looking at anything. Someone might have one opinion, the other one might have something else, and then you could balance it out, and then you make the decision because ultimately, it’s your money that you’re going to be managing.

Also, we are going to have a special event on Sunday, March 22 at 12 noon at the Marriott Courtyard in Parsippany. It’s 146 East in Parsippany right near the TGI Friday’s. It’s limited seating, so you have to sign up for it, so either you could call us or you could go to our webpage for this event. It’s called investwithtemplar.com. Again, that’s investwithtemplar.com, and we will just ask for your name, phone number, and email address, and we will reserve a spot for you. What we are going to do is we are going to go over why real estate is a great investment, how to get consistent returns, how to partner with us in real estate, how you can move some of your IRA into real estate, your 401(k), how to unlock equity in your house as well.

So one of the examples I have for if you were in the market since the last downturn and you doubled your investment since that time, the 30% will have knocked out close to 60% of your profit, so that’s a powerful statement. As we see right now, this past week, we had a reduction of close to 10% which is a correction in the stock market. Now, my opinion is it’s not going to continually go down. I think there are still strong fundamentals for the market, but who knows when the next downturn is going to be? Right now, like I said, we are a little below 10% of a market correction right now. I expect it to pop up. I know the stock market really well because I used to invest a lot of money into it. We used to trade derivatives, all types of options, stocks, we used to short and we used to do it all, and I have a lot of experience in the stock market. I always did well but it was very, very stressful, and I needed to go somewhere that’s a little less stressful. Even though real estate could be stressful at times, it’s nothing like the stock market, and when you start seeing a decrease of 5%, 10%, 15%, there’s always the question of should I take my money out now or should I jump in and put more money into it? Nobody ever really knows.

I was listening to someone on Bloomberg today and everybody was asking her, “Should I put more money in or should I take it out?” She says, “I have no idea, I have no idea what you should do,” and that’s the thing because you don’t know if this coronavirus could just affect more things in terms of production, factory production, the closing down of more countries, and then obviously, that’s going to put a lot of burden on the global economy. Unfortunately, we are not segmented where everything is in America. We are in a global economy, we get a lot out of China, and as a result of that, the impact of this virus is going to affect us. Now, it depends if it turns around and we start seeing a decrease in those cases or just start to stabilize and we could see some light at the end of the tunnel, but nobody really knows. When I was a trader, we would be looking at the markets and we would look at it really from what’s called a technical trading perspective. There are two types of trading. There is fundamentals and there is technical. Fundamentals is you want to buy Procter & Gamble because you see that there is going to be growth in the stock, they have some new products out, the liabilities are low, and the stock is going to go up. That’s a basic fundamental trade. Now, technical trade is based on where the prices of a particular stock, index, derivative, whatever the case may be and you buy and sell based on that. When it hits a certain level, either high or low, you can make a decision and you would say, well, is going to move up because of this or it’s going to move down because of this. The 10% mark for the market is that level, so if it breaks below, which it has and it stays below it, then it’s going to go further down. A lot of times, what happens is when it hits these levels, it bounces back up and it bounces off of it and that’s usually a good trade. If I was trading right now in the market, I would probably do it right now. Even though we have been hit with the 3%, 3%, 3% losses on the Dow over the past few days. Instead of worrying about that all the time, that’s why one of the reasons I like real Estate, is even in bad times, real estate still does well. We might get hit a little bit but we are doing a lot of investments in apartment buildings and there are always individuals that need apartments. It’s just that simple.

Another thing that I’d like to talk about is another event we are having on April 17. Now, this is for real estate and brokers. It is a lunch and learn and so is the other one for the one that we were going to have on 22 March. So this one is on April 17. Again, it is at the Marriott Courtyard in Parsippany and it’s basically for agents, brokers, how to increase their commissions, do profit-sharing, how to earn profits from flips that we are doing. This is really designed for real estate agents that want to go to the next step and they want to hustle. If you just want to take a backseat, this is not the approach that would be beneficial for a new one.

A couple other things, right now, we have a program for individuals that will want to sell their house because they can’t afford it and that’s mostly towards the elderly, 80 and above, and they want to stay in their house but they cannot afford it, and depending on the situation, we will buy back the house and then they could live there until they pass on. So it’s a new program that we are developing and it’s got certain restrictions, but it’s on a case-by-case basis and we are getting a lot of positive feedback on that.

The other thing is that in terms of hoarder houses, so again, if you have a hoarder’s house, it doesn’t matter how bad it is, please give us a call. One of your family members, so on and so forth, it doesn’t really matter. We will take a look at it, we are not judgmental, so you never have to worry about that. There are always reasons why it occurs. Most of the time, it’s because of a loss and there’s a mechanism, I guess, within the person to compensate for that loss, and so we have seen that a lot. We are very, very open to that. Again, we won’t judge you or anybody in your family because of that.

A couple other things. So sometimes, some of our experiences, so I had an individual call us up and she was an agent or she said she was an agent, so I’m going to qualify that because what she said, she just, I don’t know, kind of set me back a little bit. She said her father had a house and they gutted the whole thing – they took the drywall down – everything, it was down to the studs, and they had it for a couple years and then I guess someone went in there, and it was vacant, someone went in there and pulled out all the copper and everything else, all of that. So now, she is trying to sell it, and it is on a main road, so I asked her, she says, “I think it should be good for someone maybe like yourself, you might be able to make some money on it.” I’m thinking to myself, I might make some money on it. I’m not going to go to one of my investors and say, “You’re going to give me some money and you might make some money.” I was taken aback by that and I didn’t really say anything. I was just shaking my head, and then she said, “Well, you could get –” I forget what the number was. It was like, $650,000. I did all the comps and everything, so I said, okay, and I knew what road it was on, it was a main road. I was questioning it but I was like, well, maybe. So we went to see it and we took a look and said basically, “Where did you get these numbers from? You said $650,000, $625,000.” I said, “It wasn’t on this road, was it?” She said, “No, no, it was on the side road.” So I said, “Well, when you comp a house –” You would think as an agent, she would know that when you comp a house, you have to do it based on the same type of characteristics, same neighborhood, so on and so forth. So on a main road, you’re going to have to discount it because someone is not going to pay the same price as a quiet road that has a more park like setting. That’s just the way it is. People are not going to do it and when you comp a house. When the house sells, it’s not going to sell for the same price. So when agents say this to me, inside, I just go crazy because it’s just not the way it is. Not all agents are like that, there are a lot of really, really good agents out there, but some of them, I’m just not quite sure where they got this stuff from or how they are thinking about it.

So a couple other things, we are just in the process of purchasing another house. I’m not going to give you the town, but we had done a rehab there and it went really well, and we worked very closely with the town officials for it. We had another one and there were some restrictions: we had to get a temporary CO because there were some problems outside with the driveway. They wouldn’t give us a regular CO which is standard, and they wanted a lot of documentation as a result of it. I called up and I spoke to the head supervisor there, and I gave him my name and he says, “Oh, I remember you from last year,” and he rattled off the house and everything, and I explained the situation and he said to me, “Joe, you did great work last time. You worked with us, so you know that little thing that’s needed,” because it was really nothing but it was just some work that we weren’t going to have to do to get it, and we needed to close quick, he says, “Don’t worry about it, I’m just going to put this on the file and I know you are going to do the work.” So, relationships are very important even with the township. He even said if he did a lousy job and he bust our jobs, we are going to bust him back, but the issue with that is that township. I love working with them but there are a lot of other townships that do not care about any of that. They just want everything to the letter of the law and even there some, and that is the issue, that some of them just relish in finding issues and not working with you instead of working with you.

We as rehabbers and investors are trying to obviously make the community better, so when we buy these houses, a lot of times, they are problem houses for the neighborhood, so I have a house that is right now – it’s a townhome – it’s in Hackettstown and we are doing a rehab. I walked out and I was checking on it to see how it was going. I walked out and there was a woman walking their dog and says, “Oh, you are almost done with it.” I said, “Yeah, we got a little bit longer.” She says, “Thank you very much for buying it.” I said, “What happened?” She says the daughter lived there and her boyfriend was banging on the doors every night and there were drugs and there was yelling, and cops were coming all the time. She says, “And you know, we couldn’t do much.” They had to live with that for years and I knew some of that based on what the owner told me, but I just played naïve because privacy is very important to us, but I always hear it from the neighbors. And like I said, when we talk to an owner and they sell to us, we are very private in terms of their situation and what occurred there in the issues, but we always get a lot from the neighbors in terms of all the turmoil that happens. So it’s just something that we always have.

I want to go over a couple of other things. One of them is you might have read about – I’ll cover probably some more of it next week – about wiring money. There has been a lot of wire frauds going on lately. One of them was – before that, when I deal with my attorney and my title companies, they always have this disclaimer at the end of their emails. Every single email has the same disclaimer. It’s basically you are at risk of losing your money to cyber hackers, never send wire transfers to this office or any other office based on an email wired instructions without first calling to verbally verify the wire instructions. We do that all the time and we implement a lot of procedures around this because of the nature of just wiring. You wire something and it goes to a nefarious individual, you are not getting it back. I will give you a guarantee on that. It’s not like you might not get it back. You will not get it back. You could call the FBI, you could call anybody – you’re not going to get it back. There have been like two or three instances where this has occurred and some of it has been in the news.

Barbara Corcoran if you know her from Shark Tank, she’s a very smart woman, a very successful woman. She lost $300,000 or $400,000 because of this scam. Basically, someone sends an email and says, “We have to pay for something.” I think it was supposedly a so-called rehab. “Please wire to this account,” and it supposedly came from maybe the controller or someone else, and someone reads it and they wire the instruction, they wired it based on those wiring instructions. They find out a couple days later, oops, it was incorrect, someone hacked into the account and changed the email address by a letter or something. That is traditionally what happens, and the money goes out and you will never get it back.

Another individual lost about $455,000. He had a business trip, he went to China and then again, someone sends an email and also went into his account to change a setting in terms of notifications, so in case he did receive an email back, he didn’t receive any notification, and after it was over, he was out $455,000. Now, I personally think the trip to China might have really spurred that on because there’s a lot of things going on over there in terms of security breaches, things like that. They had breached Experian, I think, and the Trump administration and the Department of Justice filed stuff against the army, their four generals or something like that because of that, and if you start reading a lot of what China is doing, so you have Experian which has millions and millions of users’ data, they have breached other financial institutions.

There was another individual that has a company. He was collecting, and I’m not sure, for artificial intelligence, I think it was, pictures of individuals and he had like a billion pictures. Well, they were talking about him, it was about a month and a half ago. Also, I read an article the other day, they breached his account and somehow, they scrubbed and took down almost all those pictures. If you start looking and thinking about this, this isn’t just thinking about what could be happening there. Maybe it wasn’t China for that one – they weren’t sure, but you start putting together pictures, financial information, so on and so forth and you start looking at this, you get a good picture of what’s going on and the way things are happening, so who knows in the future what they could use that for? From moving high net worth individuals’ money out of their accounts or you don’t know. It’s pretty scary.

There are certain things that could be done to help reduce some of this. We have put certain things in place recently. We have been doing it, we are looking at different ways of ensuring that – we are very risk-averse and we are always looking at certain things to ensure that our company is very secure, but for anybody with their email address in their email account, there is a thing called two-factor authentication. I used to be an IT, so this also is very natural to me. Between the technology, the markets, and real estate, this is just my sweet spot. Anybody could set up two-factor authentication for your email, so it’s just the second way of what’s called authentication, so when you’re putting your ID, you put in a password, that is authenticating, that’s one step of authentication. A second step of authentication is that if it’s from a device that the program is not used to, it will send an email to your phone or will give you a call or something like that, and then you have to verify it again through the screen, they will give you a passcode. You have probably done this maybe with your bank account, so on and so forth, where you have to put in a PIN and then it will validate it. That’s not every single time but they will do it periodically or if it’s with a device that you have never seen before. That is one thing.

The second thing is that they always say, make sure with IDs and passwords, change those passwords a lot, use strong passwords and those are with capitals and different special characters, as well as a number, so mixing them together. One of the things you could do is you could use a phrase that you know really well and take the first letter of each word and phrase, and that helps. The other one is to use a VPN, so it is a virtual private network. I use it, but the drawback of it is that it kind of can slow down your system a lot sometimes, so that is the caveat. We use IP Vanish, it’s a reasonably priced product. It’s pretty cheap, as a matter of fact, but you could use something like that. Your security is really, really important.

So we are closing up on the show today. Again, we have a couple of events coming up. One in March and one in April. The April one is for real estate agents and brokers and the one in March is for anybody that would like to partner with us, invest with us in apartment buildings and some of our fix and flips. You could get to it by typing in investwithtemplar.com. Thank you very much and have a nice day.

The preceding 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. 

END OF RECORDING

Listen to Us on the Templar Real Estate Show on WMTR 1250AM on Saturday at 10:00 AM

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