Templar Real Estate Radio Show Transcript 3-7-2020

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 March 7, 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, 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 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. If you want any topics answered for the show, we will be more than happy to try to fit them in.

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 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 are very protective of our money and our investors’ money. I’m not a real estate agent, I have individuals on staff that are agents that will sell your house through the traditional Multiple Listing Service but we are not a brokerage.

The show will go 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 what we learned from it. We will also talk about the economy, interest rates, we will discuss trends in the real estate market. Real estate is your biggest or one of your biggest investments, so it’s important you know as much as possible about it.

I will provide my opinion. It’s only my opinion. I ask everyone to do research and check everything out once, twice, doesn’t matter, just check it out, whether it’s for your attorney, your CPA, you could ask them questions but also check out their answers as well. The more you know, the better it is.

So I’d like to discuss a few things today. First of all, we are going to have an event on Sunday, March 22 at noon at the Marriott Courtyard on Route 46 East in Parsippany, right near the TGI Friday’s. We’re 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 to use your IRA or 401(k), or equity within your house to invest with us. I think it’s very important, especially now with everything that’s going on in the stock market. I’ve been preaching for years, for the last couple of years that the market is getting high and as I said last week, and I’ve said numerous times, no one can time the market. You just can’t, so you can’t say when the top of the market is. I’m going to go over some of my opinions on where the market is today later on in the broadcast, but I think we are in for a little bit of a rocky road ahead of us over the next year.

Another thing, an event we are going to have is on April 17, it’s a lunch and learn, and it’s for active real estate agents and brokers. It’s at noon at the Marriott Courtyard again on Route 46 in Parsippany right near the TGI Friday’s. It will be about how to increase your commissions, profit-sharing, how to earn profits from the flips we are doing. Currently, we are looking for real estate agents that want to go, that want to hustle and grow their business.

One of the things that continues throughout the years as things go on is how industries change. So with real estate, it’s the same thing. It’s changing a lot in terms of on the retail side and even just on the investment side. I always quote that, it’s a great example, maybe 10 years ago, if someone said to you, “Well, you’re going to have an app and a stranger is going to pick you up in a car and bring you to a location that’s local,” you would say, “That is crazy,” but Uber as a result of it has a whole industry which has really transformed in terms of taxis, limo services. It’s really changed it, and they are having a lot of problems because of Uber. You would’ve never thought of going in a stranger’s car and driving somewhere. On the flipside, you would never think of using your car to pick up a stranger and driving them somewhere else. So that’s one example. Another one is Airbnb. Again, there are more and more of these houses, apartments that are being rented out and it has really hurt the hotel industry. 20 years ago or 15 years ago, nobody would have thought about that. Even the hotel industry, but things change a lot and you got to continue to look at where the market is going and things move very rapidly nowadays.

So a couple of things I want to go over in this broadcast, some of them include things that have happened with us this week in terms of our company, some comments from last week where the market is right now, as well as mortgage rates.

So one of the things that we drive really hard for Templar and myself being managing partner is excellence. So when I experience, we’ll say mediocrity, sometimes, I get kind of crazy inside. I don’t let it show or I hope it doesn’t show too much but it just happens. I’ll give you a couple examples, both just personally and also in real estate. I go to Panera a lot and it seems I always order for breakfast, I order a sunny side up egg with bacon and cheese. Guarantee, 50% of the time, it’s never a sunny side up egg. I got to return it probably close to 50% of the time because it’s overhard, but the mediocrity, and there’s no one checking to see if the product is a good product that is being sent out. Same thing with ShopRite, so it was right around Super Bowl time and I don’t cook much, just on Sunday because I’m going night and day, so I wanted to make some pork, an Italian pork sandwich, so I got a pork shoulder and I picked it up at ShopRite, and there wasn’t any bone in it, but I asked the guy at the counter, “Can you just butterfly it a little bit?” Because it was really thick and I was going to stuff it and roll it, and everything, and he just looked at me like, he says, “We’ve never done that before,” and I’m looking at him like, what are you talking about? You’re a butcher, you’ve never butterflied this before? I said, “Can’t you try?” There’s a wrapping around it, so he opened it up and he’s throwing up his arms and looking at it, and I’m going, “You just have to slice it. I even know how to do that and I’m not a butcher,” and I was so frustrated. I said, “Just give it to me back.” I went home, it took me all of five minutes, I have hardly any dexterity with knives and I was able to do it. Sometimes, mediocrity and individuals just accept the status quo and we are not like that at Templar.

What gets me really crazy, we have a house currently we are showing that we did a rehab on and normally, our houses sold within a week, maybe a week and a half, and right now, just because of the winter, it is a little slower. I knew we were going to have some challenges selling it. It’s a small house, so we need someone that’s like a first-time homebuyer, but it’s small, the specs showed that it’s small based on the square footage and everything. A lot of times, I’ve been getting agents that come in that are supposed to be previewing it for their buyer and they tell me a couple of things and I’m like, “This house isn’t for you.” They bring them in sometimes and it’s just like, I don’t know what they are thinking.

I had one the other day where she said, “Well, I’m doing it for my friend and she lives down the street in another townhome and she’s leaving because it’s too small.” I have a general idea of those townhomes and the house we are trying to sell now is around 1000 ft.². Again, it’s a small house. I’m thinking to myself, she says, “I’m going to call her over.” I’m thinking to myself, why? I just, I can’t believe this because the house is as big as a townhome, maybe a little smaller. Well, she called her up, she came through, she was there. If it was two minutes, it was a long time. She walked around, she says, “Too small.” I was shrugging my shoulders saying like, “You couldn’t tell this?” Sometimes, people just want to close the deal but you got to look at it, what does your customer want? Make sure you give them a good product. If they are spending money paying your commission, you got to look into it a little bit more. I just get very frustrated with that because it’s obvious to me and I don’t even know the buyer too much. They will rattle off some of their needs and I’m going to say, “This isn’t right for you,” based on it.

She had an elderly couple that has too many stairs. She says, “Well, the elderly couple, one can’t move around too much,” and I’m looking at her like, it’s not going to be good for this house, but she brought it back and said, “No, there’s just too many stairs.” It’s just some basic things. Again, very frustrated with that but if you work with us, you’ll understand our driver excellence and who we are.

Another thing, I had a discussion, I was a contributor to Forbes, so there was an article on single women, Minorities Flock to Digital Mortgage Lenders: Here’s How Minority Homebuyers Can Get a Leg Up, so that was the name of the article which is a long name, but I was in the article, they had asked me some questions, they quoted me, I think, for one of those answers, so you could always Google me on Forbes, and my name and Templar, and the article will come up.

Another thing is we had an individual this week that we put under contract. It was an elderly person. She was 87 years old and she’s terminally ill. She can’t afford her house no more, so it’s going to be foreclosed upon, some problems with her taxes, mortgage, water and utility, so it’s the whole gamut, but we entered into a contract with her to purchase her house, and as I said numerous times, we use this program where they could stay there and she could stay there until she passes on, so she doesn’t have to go somewhere else, she doesn’t have to be anxious about whether she’s going to be put on the street, all the calls in terms of credit cards, all those things, so we are taking care of all of that for her, so her last months or years, she could live in peace. She lived there for 60 years, so it’s home to her. Her kids are not supporting her, it’s just a really sad situation.

Next thing I want to do is just clean up a few things from last week, so when you always say never, that doesn’t mean that it always happens. Usually, it’s the opposite, so I said that when Barbara Corcoran lost $450,000, I go, it’s $400,000, $450,000, she was never getting it back. I have never heard it come back, but this is the first time they were able to stop payment, and she’s getting her money back. So again, using the word ‘never’ is not a good thing to do. I always admit to my errors and I was extremely surprised at that. When I read that, I was like, good for her, but unfortunately, all those individuals that have lost their money, there’s not that happy ending for them.

The other thing is that I had spoken about a product that we use, a VPN product called IP Vanish, so someone commented they started using it and it’s slowing down their laptop and so on and so forth, and it will do that. All VPNs will slow down your laptop. We looked at a lot of them, we looked at some reviews. IP Vanish was one of the faster ones, but because of the inherent architecture and what it does in terms of encrypting data and decrypting data, it takes time, and as a result of that, it will slow up your laptop and it will slow it up sometimes considerably, so sometimes, what you can do and what I do is depending on what you’re working on, I’ll disengage or reengage it based on if I’m doing something sensitive or just surfing the net and doing some benign work, but it’s highly recommended, especially for any financial transactions even though there are certain encryption already on certain transactions, it’s still better to add to that extra layer of protection and IP Vanish and those other VPN products out there that will do the trick.

So I’d like to close off this segment, I’ll be back in a couple of minutes, thank you very much.

Joseph J. Zoppi:

Hi, welcome back to the Templar Real Estate Show. My name is Joseph J. Zoppi and right now, I’d like to discuss the markets. One of the things I had said earlier on in the show is about investing in real estate and obviously, we are a big proponent to that because that’s what we do. As I had stated numerous times, I used to trade in the market a lot. I used to do options and all different types of stocks and derivatives. I traded heavily, so I know the market really well and I did really well in the market, but it’s just very, very stressful. When I started, I was taught by a couple of very senior people in Wall Street and they told me everything about how to trade options, how to trade stocks, and these guys were very good. You see them sometimes on the news and when you do something, we always want to go with the best. I spent a lot of money on that to learn from the best, and even though I was successful, it just was very stressful and you start understanding the market. I think sometimes, the more you know, the worse it is because you could see what’s going on and you can’t time the market. So the market could go up from here and break to new highs. I don’t expect it to and I’ll go over some of the reasons why I don’t think so. The market was up yesterday, the S&P, the Dow. Today is Thursday when we are recording, so I don’t always do a live broadcast, so today is Thursday and the market is down. Now, when I usually look at the market, I usually look at the S&P 500. The reason I look at the S&P 500 over the Dow is because it’s a broad-based index, so the S&P 500 has 500 stocks, so it is a broad range. You could see what’s going on in the market, whereas the Dow only has 30 stocks. The NASDAQ is really very tech-centric, so it’s very volatile, it’s more volatile and moves a lot more, but the S&P 500 is a broad base and you get a good idea of what’s going on in the market because of that, and as a result of that, you’re seeing a lot of volatility over the last two weeks and that’s obviously because of the coronavirus and what’s going to happen. No one knows. The feds have the rate and I think the market went down and then the next day, it went up. You just don’t know.

One of the things why I don’t see new highs is for a few reasons, but before we do that, I want to get into thinking about numbers in other markets, whether it’s a stock and anything else, you have to understand a few things. As I’ve said before, when the stock market goes down, it goes down a lot faster than it goes up, that’s just the way it is. A lot of traders love to short the market. They just love to short the market because my gains were a lot more. With all things being equal, we’ll say a stock was trading at $100, and then it went down to 10%, so we go down to 90%, it’s 10%, and then say it went down again another 10%, so from 90%, it would go to $81, so that’s 10%, $9. Let’s say for argument’s sake, the stock again went down 10%, so that would bring it down to $72.90, okay? Let’s say it’s trading at $72.90, and one more time, it goes down 10%, so you subtract $7.29, it brings it down to $65.61. It went down a total of $34.39 over a four-day period. Most of the time, the stocks aren’t going down 10% at a time. This is more of an example, so you could understand how even percentages and when the stock goes down and the stock goes up, you don’t end up at the same spot.

Now, we’ll say there was a rally in the stock, so it’s trading at $65.61, and now, it goes up 10%. That’s $6.56, so it ends up at $72.17, and the next day, again, for a second day in a row, it goes up 10%. Now, you’re up to $79.39 and it’s great, and we are rallying again for a third day, so now, you’re up to $86.78, so we have one more day of a rally. He had four days down and it looks like we are going to have four days up and it went down each day 10% and now it’s rallying 10%. In the end, you’ll end up with $95.46, so you are right now 5% less than where you started based on those percentages. Again, the market always goes down a lot faster. First of all, those numbers are bigger, so you might have a percent decrease or 4% decrease, a 4% decrease, but when it goes up, it’s not going to go up like 4% or 8%, or whatever the case may be. It’s going to go up in smaller increments over a longer period of time potentially, potentially, but that’s not always the case.

So let’s look at the market and where it’s going, and why I think it’s going to go where it goes. Based on the coronavirus, things are tightening up just in everything that’s going on in terms of conventions aren’t happening, airfares, markets are closing up, China, you have Italy, you have Korea, so just with China and Korea, those are two big manufacturing countries and they are tightening their borders and everything associated with it, so not as much is going out or going in, so that’s going to put a wear on other companies that it impacts. I think they were talking about Tesla. Some of their chips, they are downgrading their chips and some of their cars, I think because of the problems with getting chips. So it’s going to be an additional tug on the economy. Whether that tug is going to be a lot or not is still open for debate, and if I have time, I’ll go over an article that talks about that which kind of supports what I’m saying.

It’s right now March, we have a couple of months before the summertime, so it’s going to take a little while to see where the virus is going and there is going to be trepidation in the market. The market likes things to be – they know where it’s going. Wherever it is, they’re not sure, that’s where you will get a lot of volatility, so it will be up, it will be down, so on and so forth. The market does not like anything it doesn’t understand.

So going into the summer, there’s always potential volatility because in the summertime, there’s less trading going on. People are on vacation, so the swings are bigger because of that. So that’s that. Where we are, it’s a little slower, things aren’t moving as quick and that’s a regular economy, let alone with corona. Then we are going to approach the September timeframe, the September timeframe again, it’s going to really start kicking in in terms of the election, what’s going on with that, so there’s going to be a lot of trepidations. Is Trump going to be in? Is it going to be Biden? Probably or one of those two, and then if it’s Bernie, forget it, I think the market is going to be even more apprehensive, but there is indecision, so the market is not going to like that in terms of taking off. A lot of times, with indecision, sometimes, the market just moves, as I say left to right, so it doesn’t really move up too much, it doesn’t move down too much, so on and so forth. October is usually the worst month for stocks and as it is approaching November and election, it’s again going to be – it’s not going to break out. It will not break out because it’s not sure which way it’s going to go, and especially after the election, maybe the day after election might be strong but I wouldn’t be surprised going into next year, it’s going to be down, especially the Democrats come in, there’s going to be, again, and decision on what’s going to happen. We know it’s going to happen if it’s Trump but we don’t know, and the markets will not know what’s going to happen if the Democrats take hold. Again, there is a lot of food for thought there but something to think about.

If anybody wants to call us, we can talk about it in more detail what we do, how we invest, if you have any apartment buildings you want to sell, we are very interested in those, any house you want to sell, we are very happy, they are traditional or you just want to buy cash, so again, thank you very much for your time and I’ll see you next week. Bye.

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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