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 January 9, 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, 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 if you want a topic discussed on air, and hopefully we’ll be able to fit it in.
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. 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 am not a real estate agent and we’re not a brokerage but I have individuals on staff that are agents that can 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 how we compensated for it or corrected it. We’ll talk about the economy, interest rates. Real estate is one of your biggest investments, so it’s important you know as much as possible about it.
I’m going to provide you with my opinion, it’s only my opinion. I ask everyone to research everything. And, again, I always say it, make sure you do lots of research and ask a lot of questions, especially from a recommendations perspective. I know it sometimes might be difficult but, again, ask lots of questions. That’s the biggest thing and the most important thing. A lot of times you might uncover things based on a recommendation that maybe won’t suit you, so please do that.
Also, I’d like to do a shoutout to Paulette, as well as William and Bonnie R. We’ve been having and we continue to have private discussions, everything that you talk to us about is private. We’re very sensitive about that, whether you’re going through some financial problems, emotional problems, and how that’s impacting your house or an investment. So please give us a call, everything we do will be quiet and confidential so you don’t have to worry about any of those things. If you’re interested in selling your house fast for cash, please give us a call, we’ll buy your house as is and you pick the closing date. Usually the closing date needs to be within a couple months. Because if it goes out a little further than that, we really don’t know how the economy is going to be, whether things are going to go up, go down. So we sometimes will do it past two or three months but we’ll have to put certain contingencies in place just to protect us as well as yourself. If the market goes up, then obviously you’re going to reap those benefits. So that’s always very important.
Also, we’re looking at purchasing apartment buildings that are 100 plus units. If you know of anything, please give us a call. We will do smaller units 40, 50 sometimes even 20 but our sweet spot is really 100 plus. We will provide a finder’s fee for that, as well as if you know anyone that’s going to want to sell their house or sell their house for cash, please give us a call. Again, we will give you a finder’s fee for that. Obviously, as always, we’re very discreet about that.
As I’ve said before, based on experience, it tells us a lot of times about the probable outcome before it happens, and that’s very, very important with experience. One of our strongest suits, I always say, is our negotiating skills when we’re negotiating for a client. That’s very, very important when we’re selling a house for them. We’re just not going to be very passive about it, we’re going to give you our strong opinions on it, and why we think certain things should be done the way they are. When we bring someone on to sell their house, we, a lot of times, like to have our attorney to do the transaction for a couple reasons – they give us a good rate and you get that rate. That’s the first thing. Second thing is that we work very closely with the attorney, and yourself. So a lot of times you’ll have an agent, and the agent will be separate from the attorney. And a lot of times the attorney won’t pass certain things on to the agent, and the agent is left out. Sometimes the agent doesn’t want to be part of it. But for us, it’s very, very important that we work together on it, and we have a big say in terms of the recommendations. We’ll provide a lot of recommendations. It’s up to the client whether they want to take them, but we will show our opinions in terms of the approach that should be done and how it should be executed. And that’s, I think, one of our biggest suits. Again, we don’t take a laid back approach to this.
I’m going to discuss later on some of the things that we did from a negotiating perspective for one of our houses that we’ve been trying to sell for a little bit of time. And, again, I’ve talked about this a little bit, the area is one where it’s not as marketable as other areas, certain towns are more marketable than other towns, it’s just that simple. But we weren’t really concerned about selling it, it’s just that we knew it was going to take a little bit of time, and we were right about that. But everything’s really under control. I’ll talk a little bit about that later.
Today I’m going to talk a lot about inspections, negotiations, and tank sweeps. So I’ve talked about tank sweeps before. A lot of times when you purchase a house, you want to ensure that there’s no buried tanks, or if there is, that they were decommissioned or closed out correctly. So I’m going to talk about that, a couple other things with inspections. So inspections for houses are extremely important, you really need to do that. For condos, they are important but not as important as a house. So there’s a couple reasons for that. Again, I’m not saying don’t do an inspection, but they’re very, very critical for a house. For a townhome, for a condo, they’re not as critical but should be performed anyway. Also, if you have someone that’s not as good doing the inspection for a condo or a townhome, it’s not as bad as for a house. It’s just that’s the way it is, and I’ll explain that.
So for most townhomes, condos, you’re dealing with, first of all, gas-based furnaces as opposed to oil. That’s just the way it is. Most of the condos or townhomes are from the ’70s on up. For the most part, I really haven’t seen any that previously had oil tanks in them. So, again, you don’t have to do tank sweeps or anything associated with that. That’s all been taken care of by the association. So that’s, again, one big thing.
Next thing is roofs. Roofs are always taken care of by the HOA, the homeowners association, so you don’t really have to worry about it. Obviously, if you have water that’s coming in, the HOA needs to take care of that. But you just have to take care of the inside, and that’s probably the biggest thing about the townhomes and condos is you really only have to worry about the inside structure. Now, obviously, if you have water coming through, it is impacting the inside structure. But a lot of the things could be corrected on the outside first and then there’s minimal work that needs to be done on the inside. Again, from a water intrusion perspective, when it comes to basements, things like that, you’ll have to take care of some of that stuff. But in terms of fixing it, again, a lot of it has to do with the HOA and fixing it from the outside first, and then you have to fix the inside based on homeowners insurance, so on and so forth.
Sewer lines. Again, you’re only required for the sewer line within the house and sometimes even that depends. But definitely on the outside, if there’s a problem with the sewer line, again, it’s the HOA. Exterior, walkways, siding, all that, that’s all HOA. So what you’re really doing from an inspection perspective is you’re looking at the furnace, the plumbing, the AC, the water heater, the electrical. So with any of those devices, we’ll say, the furnace, water heater, or AC, it’s very easy for the inspector to come in, they’ll see when it was manufactured, and you’ll have a good idea of how much of a lifetime is left on that unit. So it’s very clear cut. They’ll look at the electrical box.
We had a situation where we had a townhome. We knew we had to replace the electrical box and the house was up for sale. We were working through getting that done. The inspector came in and he was a good inspector. He looked at the box, and knew that those boxes had problems and caused fires, and so did we. We didn’t say anything to him because you’re not supposed to talk to the inspector, you’re not supposed to influence them in any way. The buyer knew it but did not bring it up with the inspector and wanting to see what they said. And it was the case, and that’s why it’s good to have an inspector even for a townhome or condo, where they have to look at those things and make sure that they’re good. This townhome was probably from the ’70s, so there was a lot of history with those types of electrical boxes and they definitely cause fire sometimes. So it was very, very important.
The other thing that the inspectors will look at is the outlets and generally things like that, they’re not major things you really have to worry about, appliances, make sure they’re in good working water, so on, so forth. But the inspection is really a light inspection relative to one for a house which you do need a good qualified inspector for that because they’re going to look at, like I said, the roof and the grounds around it, the foundation, all those things are very, very important. Especially a condo, it’s almost like an apartment basically, so there’s very limited things you need to worry about, especially from a water intrusion perspective and all the outside is really being taken care of. So like I said, it’s not that important that if you make a mistake and get inspected that’s not that good, you’re very limited in terms of your impact. That’s a good thing. Most inspectors know, really, the lifetime of a water heater and when it was installed, and that’s very, very easy and basic information.
I had a house we were selling, and I was very impressed, a woman came by and it wasn’t because it was woman but just in general, this person came by and she started looking at all the different things, the water heater and looking at when it was manufactured and everything else, and no one does that. I was very impressed by it that she picked that up. She says, “Okay. This is 12 years old. This is two years old,” so on and so forth, she was very detailed and I was very impressed by the detail and the command she had to walk through a house and pick up certain things automatically, whereas, I just don’t see that with anyone. I was very impressed by what she did, how she handled it, and what she knew. It was good. The husband came by and he was just like, “Okay. Whatever she wants,” which was funny. He was taking care of the kids and she controlled everything and took care of everything. It was really pretty good the way she could handle herself and figure things out, like I said, better than most just about anyone I’ve seen. So it was really good.
So I’m going to be closing up on this segment and I’ll be right back shortly. Thank you very much, bye.
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 at templarcashforhouses.com, that’s T-EM-P-L-A-Rcashforhouses.com, that’s one word. Again, if you need to sell your house fast for cash, please give us a call. If you need to list your house, we would be more than happy to do that. If you have an investment that you’re looking at that you’re interested in partnering with us, please give us a call on that as well.
I’ve said this before but for first-time listeners, I always use my middle initial a lot of times because of another individual that is an agent that has the same name as me, except I don’t know what his middle initial is or if he has one, but I just want to distinguish myself from branding and who I am compared to the other person. So we’re both Joseph Zoppis floating around and we’re both in real estate, one is an agent and one is not, and that’s me, not.
So I wanted to discuss a couple of things on the second segment but the other segment took a little too long for me in terms of talking so it’s really cut down the content that I wanted on this one subject about negotiation, inspections, things like that. So I’m going to change directions a little bit and I’m going to first talk about, I was going to talk about tank sweeps and decommissioning tanks, and I’ll do a little bit of that. But on the negotiation side, inspection side, I will not and I’ll have to do that for next week.
Like I said before, tank sweeps are very important, they’re integral to looking for a house and when you’re putting an offer, and so on and so forth. Now, if you do a tank sweep and you have a reputable individual that does it, they’ll catch anything in terms of hidden tanks. Now, if you have a tank right now and you have oil in it, I’d recommend to remove it or make sure that there’s insurance on it. If you’re going to buy a house that has an oil tank in the ground, make sure it has insurance, okay, because as a result of that if there’s any leakage, well then, it’ll be taken care of by the insurance. But if you don’t have insurance, then you got an issue or could have a potential issue, and that that’s very important.
I’ve sold houses with oil tanks in the ground but they have insurance with it. That’s a big, big, big factor, super big. On the flip side, if there’s an oil tank in the ground and it doesn’t have insurance, I’d be pushing to have the homeowner take it out first. I think, really, that’s the best way. A number of homeowners will do that and that’s the best approach. You don’t want to purchase a house and then find out afterwards it’s leaking. Now, also, they could do soil samples, but that’s not 100%, so that’s something you need to remember. They do tests with pushing air into an oil tank and seeing if the air dissipates and/or yeah, dissipates, basically. And if it does dissipate, then they know that there is a hole in it. But there’s a fine line with that because basically, you could be pushing air in and it could be at a point where it’s going to break and it didn’t break, and all of a sudden you have that issue. So there are certain individuals that do tank sweeps and check for leaks and things like that will not do that. They will not do pressure test, others will. So it depends on the person, it could go either way on that, so that’s very important. So it’s not just a simple slam, bam, yup, that’s the way to go on it. In the end, it’s always best to have that tank taken out or have the seller take the tank out ahead of time, and then you’ll have to worry as much. And just ensure if you’re part of the transaction, who’s taken it out, make sure it’s being tested correctly, the soil, because there’s companies out there that do a shoddy job sometimes, so that’s very, very important. Even though it has to go through a process and things have to be checked, again, you just want to make sure that you’re protecting yourself.
Now we have a property, which is part of what I was going to talk about today. We did a tank sweep and there was no tank. Well, in the backyard, there was a tank but it was off to the side and was pretty far back. We had it dug up and it was a water tank. The individual that previously owned the house had a greenhouse and this buried water tank. It wasn’t that big. We figured it was a water tank before it was dug up, and we saw it was. It was based on the size and dimensions, so on, so forth. But we didn’t come back with any additional tanks on the property, which was good, but there was still a buried oil tank. So what happened was the tank was on the side of the house, we knew that. We saw the OPRE, which is open public records, and we saw that a tank was filled, it was decommissioned and filled. So when we did the sweep, we couldn’t find it. We knew where the furnace was, and what we figured is that it was on the side of the house but there was a structure on the side of the house, and that was a sunroom that was added later on.
So there was an oil tank and then there was a sunroom built over the oil tank. And when it was decommissioned, they couldn’t pull the tank out because it was underneath the structure and there was this slab there, if I’m not mistaken. I’m not sure. I think there was a slab there beforehand. So what they had to do is pump out all the oil, and this is normally what you do when you decommission a oil tank. And then they clean it with a solution and then pump out all the water and the solution that’s associated with it. And then they drill through the oil tank into the ground and see how much leakage there is or if there’s any at all, and there’ll be a little bit because no matter what, when they could drill through it, there might be some oil even though they clean it really well. And depending on how many parts per billion it is, it’s okay or not okay. Because when you’re going to get the leakage, you’re going to get it on the bottom first. All the other ones, you could kind of determine if there is a leakage. But as you go towards the center, that’s where the challenges are, and that’s why you can’t always guarantee that you’re going to be able to figure out if there’s a leak unless you go directly through the tank itself.
So what they did is they cleaned it, they drilled through it, they checked the soil, and then what they do is they fill it with like a gravel, and then depends on the situation, some dirt and a few other things, because they wanted to keep the integrity of the tank. That’s very important especially underneath the structure. Whereas traditionally, if the oil tank is on the outside, they’ll just fill it with sand and maybe they’ll fill it also with dirt on top of that as well inside the tank. But this was different, because it was underneath the structure, they couldn’t remove it. They had to fill it with the gravel. That’s standard operating procedure. So you can’t just guarantee that it’s always on the outside of the structure.
One thing though is that the structure was built on top of the oil tanks, so there was no basement associated with that. So you won’t really get a oil tank, which is below the basement. The basement might be 10 feet deep, and it’s not going to be further underneath there for the most part. I haven’t heard of anything like that. But it’s a few feet down and sometimes, unfortunately in the past, they just would build above it. That’s just the way things were done in the past. There was no environmental or the EPA wasn’t a big factor, so on and so forth. So that’s something that you have to realize. But we were able to tell by the OPRE because it was done. Now if there was nothing on the OPRE, we would not have caught that, it’s that simple. And there was no connections from the oil tank into the basement, where we could tell that. Because usually they’ll cut the connection but they’ll leave it sometimes where you could tell that there was originally an oil tank with the fuel lines going into the basement. But it didn’t have that either so we wouldn’t have caught that.
So, again, nothing is guaranteed but because they followed the process, we were able to determine there was a oil tank underneath the structure. We looked at the individuals that did the oil tank, closing it out and decommissioned it, and they were a very, very reputable company. We got their report back and everything else. So we did a lot of due diligence to make sure that we were comfortable with what was done and purchasing the house based on that.
I had a situation where we’re looking at a house in Newark, and we saw the oil lines in the basement. He did have a gas furnace and we said, “Well, you had a oil tank.” He said, “Yes, but it was decommissioned correctly. We went through all the necessary documentation and that was it.” So my buddy, which is a Newark cop, went down to City Hall and found out it wasn’t decommissioned. And then another individual that I know, I had him check a couple things out. We looked and he saw that the fuel pipe, which is for filling the oil tank, he opened that up and there was water inside the tank. So the water is probably seeping in there possibly from the street or sidewalk into the tank, so it wasn’t decommissioned and there was water in the tank. So we stepped away from that, that’s just a disaster waiting to happen. Subsequently, he tried to sell the property and he couldn’t. I don’t know where it is now but this was a couple years ago, and I kept tabs on it for a while and he didn’t do what they should have done. In the past, that’s what they always did, just cut the lines and maybe fill up the tank or just not use the tank anymore. And when you look at places like Newark or East Orange, Orange, some of the inner cities, Trenton, so on and so forth, this is especially prevalent, and that’s the way it was. But now, everybody looks for those things and it’s very, very important.
So I have to close out today. Thank you very much for everything. Again, you could reach us at 973-240-8593 or templarcashforhouses.com. Thank you very much. God bless and take care, 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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