Templar Real Estate Radio Show Transcripts 5-8-2021

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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 can 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 973-240-8953 and we can answer any questions you may have or you could email us from our website and again, any questions you have or something you want discussed on this show, we’d be more than happy to look into it for you. 

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 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 and we’re very protective of our money and our investor’s money. I’m not a real estate agent and we’re not a brokerage but I have individuals on staff that are agents that could sell your house through the traditional Multiple Listing Service. This show’s 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 especially, how we learned from them. We’ll 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’ll provide you with my opinion. It’s only my opinion. I ask everyone to do lots of research and ask lots of questions for any referrals you’re given.

Remember, that’s very important. I was talking to a woman this week and she said that one of the reasons why she reached out to us was because we’re part of the Better Business Bureau and I said and you know how important that is and what goes into it and I also brought up about recommendations. I said looking at the better business bureau is because they’re going to back the company and back you in terms of if there’s an issue and they’ll pay, they’ll stand in the middle and they’ll arbitrate if there’s an issue. So, they’ll say, yes, the company should do this or the client should do this. So, it’s a very fair and impartial process. That’s what’s so good about it but I also said that sometimes you could get referrals from individuals and they might not be the best thing possible.

So, you just got to, again, ask lots of questions. That’s very, very important and I bring up the example sometimes when you have one of your friends is married to someone you’re going, how could they even do that? How would they even marry that person? So, sometimes just because you get a referral, doesn’t mean it’s a good thing, okay? So, just be wary of that. Just ask lots of questions because maybe they don’t have taste and other things as well. So, please be wary of that. Also, I’d like to do a shout out to some of my favorite listeners: Livingston’s famous crossing guard, Paulette and Tim over at Cedar Grove Water Department, as well as Cindy and John and the kids. Also, I’d like to thank some of my private investors. I have Paul and Cindy as well on that. So, thanks guys for everything when it comes to your investment and your confidence in our company. I will probably be doing some type of like educational seminar for individuals that want to invest in real estate and they might have a friend that’s doing fix and flips and they might want to invest money. So, I’m going to be giving like a tutorial type and just going over some of the things to look out for if you’re going to invest money in someone’s projects, okay? And the numbers might sound good but they’re not good. So, I’m going to go over a bunch of those things and what we look for and what you should be looking for. 

So, I’m going to probably do that in probably two or three weeks. I’m still trying to figure out the date and it’ll be via zoom call or in my office or a combination there of, I’m not sure yet. So, please stand by for that. I’ll give you an update on an apartment that I’m hunting down for a woman from Ecuador and her eight-year-old son. Now I’ve talked about it for the last two or three weeks and I’m still looking into finding a place for her. I think we have one, she’s got to come and take a look at it. It’s in Caldwell. So, there was a couple of Caldwell, some were strike outs, some were not. So, we’re hoping that this is going to work out. Also, if you do have some type of home, like basement, a room or something for rental, please give us a call. Maybe we could have her reside at one of your locations. That would be great. So, I’m still hunting. Like I said, I think we have it but I’m not sure. I will help also and Templar will help augment any price difference. So, I make sure that she has a place because she can’t afford a lot but we want to make sure she has a nice place for her and her son that’s safe and he’d go to school and not be afraid and get a good education. So, I think that’s really, really important. 

Couple of the other things is I’m still looking for one or two individuals help with our underwriting for some deals that we’re going to be getting in. Again, financial background, former CPA, current CPA, anyone that could crunch numbers really well, that’s someone we’re looking for and someone that’s a hard worker and can really roll up their sleeves and jump into it. That’s very, very important to us. Few other things. If you have any smoke alarms by Kidde, so it’s a Kidde TruSense smoke alarms and combination smoke and carbon monoxide, there’s a recall on them. So, they’re not always working when they should be. So, that’s very, very important. So, please, again, take a look. You could look on the Kidde website but I saw this come through and we have, I think, a couple of those Kiddes so we’re going to have to swap them out unfortunately. So, again, it’s a Kidde TruSense smoke alarm and combination also smoke and carbon monoxide. So, the two different types of Kidde alarms, okay? And they’ve been sold that everywhere from Home Depot, Walmart, major stores, as well as just regular department stores. So, if you look into that and you could probably just you could take it off, unmount it and then it should have the model number and everything on the backside there. So, take at look at that.

Next thing: April job numbers came in. So, right now, there’s this disappointment about the job numbers that came through. Basically, there was 266,000 new jobs and now you have like both sides; you have the progressive saying one thing and obviously the conservatives saying something else. So, anytime you have job numbers, they’re always revise either up or down, I think they’re going to be revised up. They were expecting a million. So, it came in at 266, which is really low and I think that number’s incorrect and they usually do revise them again. It could be up or down, I expect it to be up but the conservatives are saying and there’s partial truth in this is that unemployment money is coming in and people are very comfortable collecting the money and not have to work and some of it’s because it’s just easy and other ones are there’s trepidation going back with COVID, even if they did get the vaccine. So, that’s one scenario and that is definitely happening. The other one is the progressives are saying, well, companies need to be paying more. So, I guess, I don’t know. That one I’m not sure because you had a number of companies that did raise their wages and there’s still people out there and there’s lots of jobs starting to really hit the market and especially from big companies and there’s not a dash for them on certain things. So, there’s still a lot of openings. 

So, I don’t think it’s that you have to be paying more money. The other thing with that is, is that again, everything’s going up and we all see that and the so-called ‘ticking time bomb’ that I think a lot of people are concerned about, especially economists, the FED, A lot of people in business, is inflation and right now it hasn’t ticked up really but inflation is really based on increase in wages and raw materials, things like that. So, way back when, in the 70s, when they had the oil embargo, inflation ticked up because oil increased considerably. So, I expect and a lot of individuals are expecting that this will happen again and as a result of that, what’s going to happen is they’re going to have to raise interest rates. Now, interest rates are at historically low numbers and I’ve preached about this constantly, that people are used to the low interest rates and it’s just… it’s like a drug and when things change, it’s going to shake up the system and then people are going to have to think, what are we going to do? What are we going to do? Especially, if you’re used to cheap rates and especially, if you’re based on adjustable rate mortgages, things like that, all of a sudden they start bumping up and there might be some major problems as a result of that and that’s going to tighten the economy, it’s going to tighten possibly additional jobs.

Obviously, on the real estate side, right now, prices are through the roof and they’re able to be sustained because of cheap money and you could have an individual just putting for an FHA three and a half percent down and with the low rates, they could afford a really substantial sized house in terms of the numbers from a number perspective. So, when that changes, it’s going to impact real estate, I think that’ll pull back prices. So, we’ll see where it goes, we’ll see when it happens, I think it will happen. Always, the question is, time and time again is timing and no one can time it when. It’s just like the stock market, you cannot time when the stock market hit its peak and it’s going down because it could go down and then come back up again and go higher. So, you really don’t know that. That’s always the thing. If you could tell the future that, you could tell that then you’re really golden but that’s not the case. I’m going to close out the segment and I’ll be right back. Again, you could reach us at templarcashforhouses.com. That’s T-E-M-P-L-A-Rcashforhouses.com or 973-240-8593, okay? I’ll be right back. Thanks guys. Bye.

Joseph J. Zoppi:
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, it’s one word. A couple other things I wanted to talk about in the last segment. Again, a friend of mine Theresa Mara from Mara’s Italian Deli in Pinebrook, that’s the one in Pinebrook, there’s multiple locations so the one in Pinebrook. So, again, she’s given 10% off on our lunches and her catering orders. Just reference my name and the radio show and she’ll give you a 10% off. So, you got to ask her for it directly, she’s the owner. The other one is, do a shout out to Basilico, the individual’s name that owns it, his name’s Mario, it’s in Millburn. It’s one of my favorite Italian restaurants, it’s a great place. I’m having two parties there in June. So, that’s going to hurt my pocketbook a little bit. So, usually I have like these five course meals and wine pairings with it. So, I have two special days: one is my son’s graduating from nursing school so I’m very proud of him. Originally, I’ll tell you a short story. So, he went to Morris Catholic and we’d paid some decent money for that and he just…. he wasn’t applying himself and I was getting crazy, my ex-wife was getting crazy with him and then like senior year, he started doing better and we were happy about that but his grades were okay and we were worried he wasn’t going to be able to get into a good school. 

So, my ex-wife, she’s very diligent about certain… a lot of things, not certain things, a lot of things and we applied to 25 colleges because she was afraid that he wasn’t going to be able to get in and he got into Alvernia plus a few other ones, I don’t know how many and, like I said, we knew he had it in him but it just wasn’t applying himself in high school and so it would just get me crazy and all sudden he went to school there and he’s like getting A’s and B pluses and he’s like one of the top in his class and he just excelled over four years and it was just unbelievable. He joined… he was on the First Aid Squad. He just… he just did… it was unbelievable what he did. He saved lives, it was just unbelievable and all by himself and what he knows, I was just very impressed by it and so t’s a big thing for us for that graduation and we’re going to celebrate that at Basilico and usually, my parties are always over the top and like I said, we’re going to have like five courses and wine for each course and different wine and stuff. 

So, it’s a big thing for us and my son, my younger son, he’s getting his confirmation which is extremely big for me and my family that he’s getting it and we’re going to celebrate that as well in the same manner in terms of five courses and everything but usually, my saying always is “Go big or go home” and that’s what we do and that’s what I do in just about everything that I do in life. So, it’s always you know, go big and same thing with Templar and what we do and why we do it and how we do it. So, I just wanted to do a shout out to Mario and the great job he always does. So, one of the things I was talking about previously was this debate between conservatives and progressives about unemployment and getting people back into their jobs and like I said, conservators saying, let’s just cut the money out in terms of the unemployment, bonuses and things like that and the progressives are saying basically, that you need to pay more wages. Now, one last thing on that as Montana is going to pay individuals that were previously on unemployment, if they get a job then they’re going to get a one-time fee of, or bonus of $1,200. 

So, I guess that’s good but now everyone always expecting money, either not to work or to work or bonuses to get people to work. So, it just… it’s kind of degraded from what the original intent was and I think it’s unfortunate and I think it’s going to hurt us in the future with other things that could occur, whatever they may be. I don’t know but I’m kind of concerned about that, Concerned about potential for write-offs for student loans and things like that. When I went to college and I made sure that I was going into a field where I could get a job and I could pay off the loan and a lot of people were that way. So, now it’s not so much that way and people are graduating from college on things that they cannot even get a job in and unfortunately, who’s going to pay for it in the end and that’s just the question. So, another couple of things. Right now, President Bush is looking at some tax increases. I talked about a little bit last week and it’s based on capital gain tax. So, we have three scenarios. 

One of them is he wants to eliminate the 1031 exchange, 1031 exchange has been around for since, in some way or another, since like 1920 and 21, 22, something like that and it provides the ability where someone has a house or investment property and they sell it and if they purchase another one within a short duration, you have to find it like within 45 days and you’ve got to close within 180, forget my attorney takes care of all that but basically you won’t get taxed on the capital gains which is a good thing and it’s designed for individuals to continue to grow and make their real estate portfolio and make it bigger and invest more money into America, into real estate, so on and so forth. There’s a specific reason for that. So, now they want to eliminate that and I heard someone say it was a ‘remove the 1031 exchange loophole.’ There’s no loophole, people throw that word loophole around that it infuriates me. The individuals that write the law are the politicians. They could change it at any time but let’s not call it a loophole, that thing’s been there for a long time, it’s used constantly and it’s not something that’s secretive or anything else like that. It’s a big deal and it’s a big deal for real estate investors, it doesn’t matter. It’s mom and pop or anyone else. 

So, they’re going to basically tax you on that; capital gains. I think it’s over a million dollars or something to that extent but again, that… in the grand scheme of things, it’s not a lot since prices have been appreciating over the years. So, million dollars now is not the same as million dollars previously. The other things is that he’s going to be raising capital gains again from like 20% up to 40% and the other one is what’s called the elimination of the stepped up basis when you’re inheriting properties. 

So, basically, if you inherit a property from your parents or something else like that, someone that’s related like that and your combined income, plus the capital gains on that property, even if you don’t sell it, if it’s over a million dollars, you’re going to get taxed and hit hard, you’re going to get taxed on it, period. Previously, you were not. So, under all these scenarios, the government’s going to be taking substantial money on a number of individuals that also has to do with businesses, things like that, where these individuals have worked all their lives and they’re going to get hit hard. So, it’s going to hurt mostly small to mid-size, middle-class people and it’s just it’s going to be a shame. I’ll see if it goes through. I wouldn’t be surprised if it does but hopefully it doesn’t because this is just going to hurt a lot of people with these additional taxes like that and that’s the thing, you could spend on the one side but then they’re going to just tax you hard and it’s going to affect a lot of people as a result of it. Now, as a result of that, companies and smart business people will do certain things to counteract what’s going on. Case in point, Kroger, the supermarket chain, in Southern California, there was a one town or a couple of towns that wanted to give a four dollar an hour bump and they required it for any business like Kroger’s over, I think, a certain size that you had to pay an additional $4 for hero pay. 

So, Kroger said, okay, I can’t afford to have a supermarket here in this town anymore. I’m closing up. It was that simple. So, the government could impose certain things and then business is going to react accordingly. So, with these tax hikes and things like that, people are going to react and do certain things to counteract that and we’ll be looking into that ourselves very aggressively and seeing what we could do. Right now, I’m selling a property and I want to put it into a 1031 exchange. It’s a four unit I’ve been talking about in Bellville. I’ve got rid of a couple other ones and want to get rid of this one because we’re going bigger on these and then like I said, we’re usually doing a hundred plus units. I’m looking 50 units, there’s another one that I could line up that’s possibly 16 units. It’s a little smaller than I want but I want to roll this in and I don’t want to get taxed on it. So, I might buy the 16 unit as a result of that but you got to find the properties within 45 days and you got to specify it so on and so forth. There’s a bunch of rules around it. So, it’s always the mad dash but any of these things, you have to look at different ways not to get hit too hard with this and that just, hopefully, we could figure a few things out. 

I have a few ideas but I’ll have to talk to my tax attorneys and tax accountants and everything and see what we’re going to do as a result of that but there’s always this give and take and with the government and how they react and then you have to react accordingly. So, we’ll see where that goes. So, I’m going to close out today. There was one additional thing. I was talking to my architect and we were talking about homeowners insurance. So, real quickly, always check your insurance policy, all your insurance policies. I talked about this last year, when theywe’re talking about COVID and people thought they were going to get money for it but homeowners insurance. So, there’s… within the homeowners insurance. There’s like a perils policy and all risk policy. Perils is it’ll reimburse you for certain things where all risk policies will, for the most part, reimburse you if something happens to your home no matter what, like a tree falls on it. So, on and so forth. My architect had a tree fall on his house that he didn’t move into yet and it was like $320,000 worth of damage and the insurance company wanted to give him like $120,000 or something, some ridiculous number, they were scoping out the work and they were saying that individuals that would work on this would be paid like $8 an hour. You can’t get $8 an hour for anyone. This was like a year ago or year and a half ago. So, he’s going to maybe sue them and stuff but it was like something ridiculous and it was by one of these insurance companies that’s online and supposedly is very easy and pays out very easily. 

They don’t pay out easily when it’s a $320,000 problem. They don’t. If it’s a thousand, yes. 320, forget it. So, just be wary of who you have, look for reviews but some of these real quick ones where it’s easy to sign up, those are the ones you’re going to pay the most for in the end. So, that’s it for today. Again, you could reach us 973-240-8593 or templarcashforhouses.com. Go see Theresa Mara’s Italian Deli in Changebridge, on Changebridge road in Pinebrook or Mario at Basilico in Millburn. Thank you very much. Everyone got blessed and have a safe weekend.

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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