2/20/25 Dogecoin, Gas Prices & Multifamily Investments with Marc Thurston

The Moneywise Radio Show and Podcast Thursday, February 20th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Guys" podcast call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Management instagram: MoneywiseWealthManagement Guest: Marc Thurston, President Multifamily Investment Group at ASU Commercial website: www.marcathurston.com/

• 0:00Speaker 00

  From the padded radio room off Stockdale Highway, here is Money Wise. Call or text in at 661-396-1000.

• 0:09Speaker 01

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• 0:29Speaker 02

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• 0:40Speaker 00

  Now, let's start the Money Wise Show.

• 0:44Speaker 01

  That's right. It is the Money Wise Show. We are live from the Garret Ellis padded radio room off Stockdale Highway. I am your host today, Chris Pelster, joined by...

• 0:56Speaker 00

  Seth Perry.

• 0:57Speaker 01

  Mr. Seth Perry, we've got to team up a couple of times, you know, as the changes have happened around here at Money Wise. We've continually tried to put the right people in the spot to make the Money Wise Show as good as can be. Answer your questions. We love it when the listeners or who make the show ask the questions, join in. Most people don't like to call and talk live anymore. So you definitely can also send in a message, 661-396-1000, if you do want to join. We have a great show today. I'm really excited. We're actually going to have Mark Thurston, who is the President, Multi-Family Investment Group at ASU Commercial. Going to come in and talk a little bit about, you know, kind of the, the, the commercial space, multi-family investments, different things.

• 1:42Speaker 01

  I think he's going to be speaking at the Bakersfield Realtors Association tomorrow morning for breakfast, which we're going to even go join that as well. Always good to educate yourself, learn. Obviously, multi-family investing is, is huge in all of America, but we get the, the here local perspective because that's where real estate is most important.

• 2:03Speaker 00

  Yes, sir.

• 2:03Speaker 01

  Is where either you live or where you're investing. And so excited to get some of that information. But before we do that, we're always going to do what we do. Some news came out today from a small, little mom and pop shop, Walmart.

• 2:19Speaker 00

  Who?

• 2:20Speaker 01

  Walmart. Have you...

• 2:21Speaker 00

  Is that a new thing?

• 2:22Speaker 01

  They have them in a couple of cities here and there. They're usually like over 15, you know, you know, or 1.5 million square foot little shops that they have. Little? Yeah, yeah. So anyways, one of the big things that came out today, Walmart came out and gave their outlook and they were not necessarily super positive. Definitely said that it's going to be a little challenging to continue to produce the profits they are. Obviously also, the President Trump tariffs and policy shifts. So they were kind of saying with some of these different factors going on, they weren't super, you know, super

• 3:02Speaker 01

  bright on continuing be able to produce the same profit margins that they've been seeing. So with that, the market did react, not necessarily crazy, but the biggest mover there was the Dow Jones, which we refer to as the dumb Dow, which the Walmart stock is one of the 30 on there. So it fell, what did I tell you, six and a half or seven percent or something? Walmart slid today. So sometimes a big stock like that can make that one index alone, you know, kind of be impacted. But it will, the Dow Jones fell roughly about 450 points, down about 1%.

• 3:42Speaker 01

  The S and P 500 and the, which is coming off of its second record close in a row on Wednesday, it pulled back about half a percent. And the same thing with the NASDAQ composite, which is tech-heavy. It's down about half a percent as well. So market, you know, is still positive for the year, still moving, you know, positive so far this year. And I think it just took a breather. Obviously, when you have a behemoth like Walmart, not necessarily trying to paint the rosiest of pictures. You know, and maybe it's a little bit of posturing. You know, sometimes we say that stocks and stock companies,

• 4:21Speaker 01

  when there's something like the tariffs floating around, which, which could have a negative impact, well, why not use that as a free excuse? Right? Why not, why not say, oh, well, you know, the tariffs and this and that. It's like, you know, that they still want to make, continue to make the same amount of profits. Walmart's got some pretty smart folks, you know, in, in their organization. Uh, and I'm sure they're not just gonna sit on their hands and, and, you know, have something happen. And we don't even know what those tariffs look like, or what the impact's gonna be of the tariffs. And so it is really tough, but, uh, sometimes, you know, uh, we throw out there that some of these companies, they're not dumb, you know, if, hey, if we're gonna have a bad quarter, we might as well start, you know, paving the, the possible excuses right now, and they might have a down quarter next year.

• 5:05Speaker 01

  And sometimes strategically, companies even shift things around when they know that they have a good excuse, or they can brush their issues under the rug and, and kind of fall in line with everybody else. Uh, might even be some of that going on right now with, with some very political hot buttons like DEI.

• 5:22Speaker 03

  Yeah, we were talking about that earlier.

• 5:23Speaker 01

  Yeah, and some different things that companies are doing, um, you know, because right now, well, that can all be, you know, if, if you're really mad about DEI issues going away in companies, or, or, or, you know, those things being dropped, well, these companies can do it, and if you're not happy about it, well, then you blame Trump.

• 5:40Speaker 03

  Yep.

• 5:41Speaker 01

  Not necessarily the company, uh, getting rid of, of the things. And so it's just, uh, kind of a unwinding of some things. And some of these companies are maybe using this as an opportunity to say, hey, you know, we have been spending a lot of money in this direction, and it's not necessarily, uh, you know, the best profitable move, and so we can change it now. And people will, instead of being mad at us, they'll be mad at an administration.

• 6:07Speaker 03

  Not that it's, uh, an administration that is, people are mad at very often, right?

• 6:13Speaker 01

  It's polarizing, polarizing.

• 6:15Speaker 03

  Yeah, and speaking of polarizing, we were talking before the show about, uh, DOGE, you know, Department of Government Efficiency, and I've, you know, through the research I've been doing, it's like, man, this is great. They're, they're cleaning house, they're cleaning up the government, they're getting rid of, uh, excess spending, just like you'd see in any company. I know when I worked for Halbert, and that was just a huge thing, man. When, when oil slowed down, you know, they just came in and, and it's smart. I mean, you're, you're getting rid of waste, essentially, right? But then, you know, you start digging in and doing the research, and it's, there's been a massive amount already of government employees who've been let go. Um, and one of the things I was reading about... Uh, seventy-seven thousand accepted the offer. They were basically given a, a federal buyout

• 7:00Speaker 03

  offer from Doge and Elon Musk, and they took it. They basically get their benefits all the way through October, gives them time to find some new jobs, but I wondered, how is that affecting our local economy? So if you, as a listener, know of any of your friends, or even you who are being impacted, um, by Doge, then let us know. With that said, something else new that I'm excited about are Doge dividends. Have you heard about this, Chris?

• 7:26Speaker 01

  Yeah, yeah, that's definitely, uh, this is, this is where we'll see, I mean, there's, there's the naysayers that are already coming out and saying that even based on the numbers and stuff that are being crunched right now, not sure how, uh, how Doge is going to be able to make this work. And the dividend is basically taking some of these savings and, and putting them back into the pockets of Americans. Um, you know, and I don't know what the criteria is, or who gets it, or, or whatever, but, uh, but yeah, it's, it's an interesting phenomenon. One of the things is, is, you know, I mean, I definitely, my heart goes out to anybody impacted by some of these decisions that are being made, and somebody may have just finally got a government job that they've been

• 8:08Speaker 01

  trying to get for a couple of years, and it, you know, absolutely breaks my heart, uh, you know, to think that like, you, you get on board and six months later, it's like, okay, never mind, your position's cut. Um, you know, but obviously, there's definitely been a sentiment that people have wanted to see at least some transparency, some changes, um, you know, you know, get some, be able to look in, in the books per se, but, uh, you know, and I think that they are trying to be very transparent. I think the one thing that is so different about what's going on, that, that the American people just don't kind of know about, or know what to do with is, for so long, like, literally behind the speaker could be on fire, but the, this, the speeches were so polished, and I had some professional writer, you know, like,

• 8:53Speaker 01

  and, and it's like, wait, you know, like, everything's on fire behind you, and you know, but this is just this polished, great speech. And now we have the kind of the opposite extreme, where you have comments being made, you have things being said about some of these things, you know, uh, they, they let some people go, they've hired them back on, and it's kind of like, um, hey, we're, we're not perfect, you know, and that's just not- What I think a lot of people are used to as far as, you know, how the political game has been played for a while. And so it's, it's just an interesting time because, you know, these are people's lives. People's lives are being impacted. You know, cutting the fat, you know, I heard one person say, it's like we're cutting the fat off a steak with a sledgehammer.

• 9:37Speaker 03

  Yep.

• 9:37Speaker 01

  And it's like, are we ruining the entire steak, trying to just get the little piece of fat off of it that, that needs to be cut off?

• 9:44Speaker 03

  A sledgehammer though, Chris, is that the best, is that what you heard? I just imagine this big old T-bone and getting a sledge from the garage and just, you know what I mean?

• 9:52Speaker 01

  Yeah. It's not good.

• 9:54Speaker 03

  That's gonna be messy. That's not good at all. They should have used a knife.

• 9:57Speaker 01

  Yeah.

• 9:58Speaker 03

  Some kind.

• 9:58Speaker 01

  Should have used a knife.

• 9:59Speaker 03

  Right. Yep. Probationary firings could affect 200,000 employees. And this is something else. Now it makes sense. I was, uh, uh, bird flu responders were accidentally sent termination notices. That's part of the sledgehammer, I think. These types of mistakes. You know, you, you wake up one morning and you have a termination notice in your inbox.

• 10:19Speaker 01

  Yeah.

• 10:20Speaker 03

  And, oh, it's not true. Yikes. Yikes.

• 10:23Speaker 01

  Yeah. So some of that stuff, obviously you want it cleaned up and, and there's, there's some people that are so excited about some of the ways being addressed that it's like, uh, you know, you almost forget the humanity side of, of things. And so, you know, here, here in, in this office, this radio show, we've always tried to be apolitical. We've always tried to talk about it from both sides. We've tried to, you know, be, uh, be a little bit in the middle as far as, uh, even if you, you have strong opinions one way or the other, it shouldn't change, you know, how, how, being money wise, it doesn't matter what side of the aisle you're on. It doesn't matter how you believe politically and stuff like that, like smart financial decisions, putting yourself in a good place for your financial future. All those things can take place regardless of who's in the White

• 11:04Speaker 01

  House, regardless of what's going on. You want to divorce yourself of making financial decisions based on, um, what's going on in the White House. Um, but, uh, but yeah, you know, cause we hear it all the time, you know, oh, like the market did so good under this presidency and the market did so good under the, you know, and it's like, at the end of the day, you know, chart after chart. There's all kinds of studies that have been shown that there's not really necessarily a direct correlation. A lot of times it's really mixed up on why the markets are moving the way they are. Now, a president is always going to claim it's doing good because of him, right?

• 11:38Speaker 03

  And if they didn't, they blame the previous.

• 11:40Speaker 01

  Right. You know, and it's, it's, it's just a blame game. Uh, but at the end of the day, it, it's the hundreds and hundreds and thousands of companies that are trading on the stock exchange. It's all the American people that are working for those companies that are making things happen inside of those companies. Um, you know, and you're getting to participate with, with the growth, the up and the down. Now, obviously some things can impact, you know, if taxes go higher and different things, you know, it, it can affect the economy, but, but we've had a long track record of pretty consistent gains and growth, um, on some of the major indexes, you know, that have, have spanned all kinds of issues, geopolitical issues, global issues, uh, tax situations, you know, even assassinations, assassination attempts now.

• 12:25Speaker 03

  Wars.

• 12:25Speaker 01

  Wars. You know, there's, there's all kinds of things that, you know, would make some people say, well, maybe I should not invest or maybe I should take, you know, it's like, nope, time in the market is still one of the best and easiest ways to let your wealth continue to grow for you. Stay disciplined, stay at your approach, um, you know, and then just know your situation and know your risk tolerance and what you're comfortable with and stick with it. So, um, but we're going to take a break real quick. When we come back, we are going to be joined with Mark Thurston from ASU Commercial, President of Multifamily Investment Group. We'll be right back.

• 12:59Speaker 00

  Are you nearing retirement and currently working with a financial advisor? Are you not sure if you're invested appropriately? Call our offices at 661-847-1000 to sit down with a MoneyWise Financial Advisor for a no obligation assessment of your investment.

• 13:24Speaker 01

  Welcome back. Thanks for joining the Money Wise Show. We're live from the Garo Ellis padded radio room off Stockdale Highway. It's me and Seth, and like I mentioned, we are joined now with Mark Thurston, who is the President of Multi-Family Investment Group at ASU Commercial. So, thanks for jumping on, Mark.

• 13:43Speaker 04

  Well, thank you for inviting me.

• 13:45Speaker 01

  Yeah, yeah, we're excited to get a little bit of education today on, on kind of the history of residential real estate, kind of how you got your start in it, and then even just educating our listeners. We were talking a little bit about before it went on here, the difference between commercial and residential. So, why don't you talk a little bit about what kind of got you in real estate and what got you going down this path?

• 14:13Speaker 04

  So, I started early, right out of college in real estate, and back in the early 90s, it was really interesting, much different market than it is today, in that younger agents were not really welcome in the residential space. And so, for about a year and a half, I really struggled and didn't sell anything, because everybody looked at me and goes, "Well, are you like, old enough to own a house?" But then, I ended up, one day, it was during the holidays, a friend of mine, we're looking through back when they had the actual MLS book, and we just decided, "You know what, we seem to be unable to sell a house, but I'll bet you we could sell something else." So, we looked for the most expensive listing in the MLS book. We found a $2.5 million multifamily property

• 14:55Speaker 04

  in Delano, and we sold it. And nobody questioned how old we were, and all of a sudden, I decided, "Okay, well, I might not be able to sell a house, but I can sell apartments, because nobody cares how old I am."

• 15:04Speaker 01

  Right. It boils down to the numbers.

• 15:06Speaker 04

  Yep, that's all numbers, and that was how I got started.

• 15:09Speaker 01

  Yeah, yeah, that's great. And so, one of the things, so, talk a little bit about, you mentioned going back and forth between residential and not. So, what constitutes the difference between residential, real estate, and those kinds of things, and commercial?

• 15:25Speaker 04

  So, in my space, the multifamily space, anything considered 1 to 4-unit rentals, that's considered a residential property, although typically a four-plex, if you're buying that, it's much more of a commercial property than it is an actual residential. Anything 5 units and above, that requires commercial financing, so that definitely falls within the commercial space.

• 15:48Speaker 03

  How does that commercial financing compare with, I'd say 99% of people are just thinking about their 30-year mortgage and the down payments require the 20% or FHA, what does that look like?

• 16:00Speaker 04

  So, commercial financing typically requires a much greater down payment. So, Bakersfield in the multifamily space right now, we're looking at anywhere from 35 to 45% down. And your loans are typically going to be a 10-year loan or with a balloon, but it'll be amortized depending upon the loan, anywhere from 20 to 30 years. But you do have that 10-year balloon.

• 16:22Speaker 03

  Gotcha.

• 16:23Speaker 01

  Hey, so, you know, real estate is most important. We talked about, obviously, where you're investing or where you're living, right? You know, you can talk about national averages and stuff like that, but why don't you talk a little bit about the status of, you know, commercial real estate, multifamily housing here in Kern County or Bakersfield? And how's that compare to what's going on in some of the other markets or across the nation?

• 16:47Speaker 04

  So, the last, since 2013, our market here in Bakersfield has been extremely robust. We have, with the exception of one year, we've had double-digit appreciation every single year since 2013.

• 17:00Speaker 03

  Wow.

• 17:01Speaker 04

  Our vacancy rate has, for at least the last five years, been under 3%. And we, up until the last two years, we've had double-digit rent appreciation. So, it's been an extremely healthy market. We are starting to see it slow down a little bit at the current market. But, you know, overall, I think the long-term outlook for Bakersfield is very healthy.

• 17:24Speaker 01

  Yeah. So, you've obviously seen tenant behaviors for a long time. What is some of the shifts that's happening with getting those spots filled? Is it still kind of the same thing that you've seen? Has technology entered into tenant behaviors, finding tenants, and those kinds of things?

• 17:44Speaker 04

  Absolutely. So, it used to be all reliable upon the newspaper or those little rental magazines. Now, everything's done online, so you've got to have, you know, professional quality photos. You can have video or virtual tours. And everybody's looking for reviews. And so, finding your tenants has become much more tech-centered than it used to be. But still, at the end of the day, when that tenant shows up at your building, it better show nice, and you better have a very nice person greeting them and making the process easy.

• 18:16Speaker 01

  So, go ahead. Yeah, I was just gonna say, COVID-19 created some interesting realities for landlords, right?

• 18:27Speaker 04

  Yes, it did.

• 18:28Speaker 01

  Luckily, I wasn't too extended in that world, but I felt it a little bit. But has that changed the thought process of investors? Has it changed investor behavior in that space? I mean, what did that do for folks, other than just kind of make them maybe a little bit more cautious or thoughtful on finding tenants?

• 18:48Speaker 04

  You know, cautious is a great word about that, because as we came out of COVID and so many people basically didn't have to pay their rent, obviously, that left a sour taste in a lot of the landlords' minds. And so, they are much more diligent about finding those residents. But at the same time, the state of California has really imposed a lot of new laws that make it more difficult to select tenants and screen tenants. And they're continuing to advocate for even, you know, greater transparency to basically, if somebody shows up with the money, they'd like to move it to a situation where you can't even run credit anymore or look for evictions. And obviously, for a landlord, that is a major concern.

• 19:32Speaker 04

  If somebody's been evicted before, you really want to dig deep into that and try to figure out why.

• 19:38Speaker 01

  Did you mention a little bit interest rate differences between residential and multifamily?

• 19:46Speaker 04

  There is a slight difference. So, you know, I would say typically, 1% to possibly 2% higher on a commercial loan than you're going to get on a residential loan.

• 19:57Speaker 03

  Gotcha. Are most of your investors local, or are they coming from LA? I know a lot of residential investors are coming from LA and just paying cash and outbidding people. Are you seeing that in your space?

• 20:10Speaker 04

  You know, we have seen quite a bit of that. This past year, in 2024, we actually saw a decline in the number of investors coming from out of the area. There were more local people that were probably active in the space. Although, overall, while the volume of sales was up in 2024, the number of transactions was a little bit lower.

• 20:33Speaker 04

  But historically, the majority of our out-of-town investors come from Southern California with a small trinkling coming from Northern California.

• 20:41Speaker 01

  So what is a, you know, a busy season for you? I mean, how many transactions are kind of taking place? And is it all you? Or is there a team? Or how do you guys handle that?

• 20:52Speaker 04

  So for myself right now, it's just currently me. But our busy, a typical busy year in a multifamily space is, you know, we're probably doing anywhere from a small low year would be 25 transactions to a busier year, we'd be probably closer to 40 transactions.

• 21:09Speaker 01

  Wow.

• 21:10Speaker 04

  So it's, you know, it's, it's a challenging career. But I've been doing it for 34 years. And I guess I finally figured out how to do it.

• 21:20Speaker 03

  One of the things I like to ask when we have, you know, these, you're an entrepreneur, right? Was there ever a low? I'm sure there was. What, would you mind sharing it? And how did you get out of it?

• 21:33Speaker 04

  So my low would have been probably November, December 2008, after Shearson Lehman had collapsed. I actually remember sitting in my office, listening to Scott Howe on the radio at K U Z Z, talking about how these experts were projecting that the market was going to be down for five years before it ever recovered. And I'm looking at no listings, no pending sales. And I'm thinking, how am I going to survive for the next five years? So I would say that that was definitely a low spot. Once I had become established.

• 22:06Speaker 01

  Yeah. How, how long were you in the industry before that?

• 22:08Speaker 04

  I had gotten in the industry in 1990. So I had quite a track record up to that point. And, you know, leading up to 2008, I had some, some major years. I had one year where we did 82 transactions. And you kind of get spoiled, you know, you're sitting or performing at a certain level. And then all of a sudden, the world collapses around you. And you're going, well, okay, well, why aren't I selling 82 transactions a year? What's going on here?

• 22:35Speaker 01

  Well, let's take a break real quick. And like I said, we're mentioned, we're joined right now with Mark Thurston, ASU Commercial. He is the president of the multifamily investor group over there and loving this conversation. So if you have any questions, you too can join 661-396-1000. We'll be right back.

• 22:52Speaker 00

  Don't forget, Money Wise is more than a radio show. We're an independently owned local wealth management firm with 60-plus years of collective experience. Our financial advisors are here to help you, Kern County. Together, let's be smart, be safe, be money wise.

• 23:13Speaker 01

  Welcome back. Excited to have you joining us today, The Money Wise Show. Chris Pelster, Seth Perry running it for you. In the Gero Ellis padded radio room off Stockton Highway, again, joined by Mark Thurston. Thanks for joining us, Mark. Great conversation, the first segment there. And one of the things that I kind of wanted to ask you about, because we've noticed it here in this office. We have an aging population. You know, we've had some great clients that have been part of Money Wise for a number of years. And you're starting to see some of these investors that you've been working with for a number of years, and they're going into new phases of life. And even that transition of wealth is starting to take place. So is that transition of wealth happening amongst,

• 23:56Speaker 01

  I mean, I would imagine amongst commercial or multifamily investors as well. And has that changed your business? Is it creating opportunity or working with the families?

• 24:05Speaker 04

  Yes, it is. So what we're going through is probably the exact same thing you are. The big thing in our space is we have a lot of people that are older that manage their own properties. And a lot of them are talking to their kids and their grandkids and their children don't have any interest in managing property. Their grandkids don't want to manage property. And so at that point, they typically will engage an agent such as myself to to come in and help them basically liquidate and turn that into cash.

• 24:35Speaker 01

  Yeah. And so then, I mean, is there a lot of good planning out there going on? Cause I feel like sometimes, you know, the, the, the original investor does such a great job, but not necessarily setting up. And we've talked about business owners and, and the same thing where it's like you, you do a great job of building the business, but then thinking about the exit plan or thinking about how you're going to hand these off and what that looks like. It, it can be difficult. You're wearing multiple hats, but do, are, are a lot of folks like thinking forward as far as how to get rid of those funds or?

• 25:09Speaker 04

  I think, I think they are, but the, the challenge that you run into on real estate is you're going to pay this massive capital gains. And for many of these people that are getting up there in age, they've owned these properties for 40 years. And so the equity that they have built up in there is massive and yet they're going to turn around and pay such a significant portion of taxes on that.

• 25:29Speaker 01

  Yeah.

• 25:29Speaker 04

  And a lot of them really don't want to exchange into something else. So they end up paying the taxes. The, the ones that have given it more forethought, and we see this a lot in the agriculture industry is where these farmers will own a farm for, you know, it'll be in their family for a hundred years. And what they're doing is selling those properties. And they're rolling them into a professionally managed, commercial real estate assets such as apartments.

• 25:56Speaker 01

  Right.

• 25:56Speaker 04

  And then they can do a 1031 exchange into that. And then it's just completely passive income. They don't have anything to do with the operations. But quarterly they get a, they get a check, mailbox money.

• 26:06Speaker 01

  Yeah. Yeah. You know, we have, we have some options like that for some of our clients and, and it's a way that when people are actively managing their, their holdings, they can basically put it in a placeholder and hold it until the exit happens, right? You know, and then, you know, when the eventual passing happens, then it's actually a little bit better too for the, the beneficiaries. Because a few of the beneficiaries might say, hey, I want to keep holding that investment. And the other two or three say, no, I want to sell it. You kind of have options to whereas if it's one commercial property or a multi-family housing, you know, type of a situation, it's, it's all or nothing. Typically, it's like if you have three that want to sell and one that doesn't.

• 26:48Speaker 01

  Well, guess what? We're going to sell it. You're going to get your money and you can go invest it if you want to. So. So yeah, there are some ways to extend that tax consequence on those and that's interesting.

• 26:57Speaker 03

  We had a question come in and just talking logistics about your business. It says, Mark is a great guy and we've done a lot of business with ASU over the years. Great snag, guys. Where is their office? Where is your office?

• 27:09Speaker 04

  We are out on Bolt House Drive next to the Halch and Blood Bank.

• 27:13Speaker 03

  Very cool.

• 27:13Speaker 01

  Bolt House.

• 27:15Speaker 03

  So we were talking earlier, I think it's worth mentioning. Around 1990, you mentioned the multiple listing book. Can you explain to our listeners how awesome that was? And then the conversation that we all started laughing at at the break?

• 27:29Speaker 04

  Yeah. So I believe it was every Tuesday morning when you walked into your office, there would be a pastel color book that was probably. Depending on the number of listings, anywhere from a half inch to an inch thick. And it was made up of like, um, almost like newspaper paper in there and it would have a picture of a listing and it would give you a short data. Information on the listing as well as who to contact. And you used to physically or manually have to thumb through that book to the price point in the neighborhood. And then scan all the listings and try to find something that might work for your customer.

• 28:01Speaker 03

  And then you're showing properties without a cell phone at this point in time. So you go and someone gets their wires crossed. You're going back to the office or you're hitting a payphone, right?

• 28:10Speaker 01

  Yes. I can just picture him walking around the office with the, uh, the, the, the wall phone, you know? Yeah. With the long string, you know, it's like he's walking over the desks and.

• 28:20Speaker 03

  Yes.

• 28:21Speaker 01

  Yeah. You know, and, and what it spilled into was a funny conversation we had here in this office where, um, one day there was a sales person. Well, we didn't know it was a salesperson at the time was sitting in the, uh, in, in the waiting room. And had a phone book on their lap on a, on a, his briefcase. And so, uh, somebody walked by and said, oh, I haven't seen one of those, you know, in years, you know? What in the world's that phone book thing for? Something like that. And he like rattled off the exact number of. Readers that actually are still reading it because lo and behold, it was the. Salesperson for the phone book that was here trying to get us. Buy an ad. So it was pretty funny, but obviously technology's changed in a lot of ways, but I bet in some ways you probably perfected how you would get that and how you would handle

• 29:04Speaker 01

  that. You'd go through it and, and, uh, you know, um, Seth's a little newer to the office. I said, I remember when we used to like, we'd open up a client account and we kept their paper application down at the end of the hall and we had, you know, uh, uh, manila folders and folders and folders of client data, of course locked and, you know, stored away. But, uh, but yeah, there's some things about the old systems that I still miss today. I don't know how much technology's made things easier, other than we're all juggling even more, uh, things it seems like.

• 29:35Speaker 03

  So it was the same with Kelly Blue Book. It was literally a, a blue book that they had. I don't know how often it was, it was listed, but it, it gave all the, you know, real time prices of used vehicles. And so you'd have to go to the dealer. They would be the only ones with the Kelly Blue Book, right? And then the rest is history. We had another, uh, another question come in or comments says, are commercial real estate prices falling here in town? And I know it's a reach, but any word on new apartments being built over by the marketplace? I heard it a couple of months ago and haven't heard of things since. Thank you, guys.

• 30:06Speaker 04

  So the values, um, definitely are slowing down at the moment, um, as far as from the multifamily world. Um, as far as new construction, there's going to be approximately 400 new units that will open sometime this year. Um, the following year, we're going to be up, we're going to bump that up to around 750 units, um, with some of those actually trailing into 2027. Um, as far as the, the units closer to the marketplace, I think that, that some of those 700 units will be in the southwest area of town. Um, but you know, not, not like right on top. In fact, the one they might be referencing is I've heard a rumor that they plan on knocking down the Edwards Theater and building units there. But I saw one article and I've not seen any subsequent.

• 30:52Speaker 01

  Yeah. I wonder if that's what this, I, cause I remember hearing that. So it was like, yeah, they're going to knock down them.

• 30:56Speaker 03

  That'd be a smart move. I mean, one of my first jobs, Kelly's Coffee and Fudge. You guys remember that place? Right over by the market? And I remember on Saturday nights, this is before Starbucks was around. The line would be out, you know, the place was just hopping and it was relatively safe, right?

• 31:10Speaker 00

  I know we had John Cox from the Californian on earlier this week and somebody kind of referred that same type of question and he didn't have anything. He did mention that they are removing the fountain. If they haven't yet.

• 31:22Speaker 03

  They already did.

• 31:22Speaker 00

  But there are, uh, they haven't had any movement with the, uh, the apartments yet.

• 31:28Speaker 03

  I think that's a, a little bit of cancel culture hitting home and it really, it really hit, hit close when the kids like to run around the fountain and now it's astroturf.

• 31:37Speaker 01

  Yeah. And I would say that, uh, I mean, I'm not a smart commercial investor or anything like that, but if you did put apartments in a location like where the theater is, it would make all the tenants happy, I imagine. If all of a sudden now you have, you know, hundreds of people living at your doorstep, uh, and hopefully buying your goods and services versus hoping that people are coming to movies, which, you know, it seems like most people. I mean, I don't know what's even going on with movies anymore. It seems like every time I'm like, oh, that movie looks good. It's like, it was in the theater for four days.

• 32:09Speaker 00

  Yeah, for a week.

• 32:10Speaker 01

  Yeah. I'm like, okay, well, I guess I'll just watch it at home.

• 32:13Speaker 00

  Well, yours, Edwards has kind of been outdated with these updated theaters and, uh,

• 32:19Speaker 01

  Yeah.

• 32:19Speaker 00

  Yeah, just kind of.

• 32:20Speaker 01

  Yeah. Have you shared your story of what you got to go do with your boy?

• 32:23Speaker 00

  Oh, not really. We got to go down to LA for a concert this last weekend and in LA over by Crypto Arena. They have a theater that's 40X, which is kind of like a Universal Studios ride for two and a half hours. So I believe that would probably be the next step.

• 32:37Speaker 01

  The whole theater picks up and shakes.

• 32:39Speaker 00

  The whole chairs shake. That has scents. When it was, when it was windy or raining, there's water dropping and the wind is, it was pretty insane.

• 32:47Speaker 01

  Yeah, that would be really, really cool. And I can see where it's like, if you're gonna go and you're gonna pay the money, you want to have some experience and, and that's, that's, uh, maybe worth, and you said it wasn't too crazy expensive.

• 32:58Speaker 00

  No, I mean, considering how, how these theaters are.

• 33:01Speaker 01

  The popcorn was a hundred and twenty dollars.

• 33:05Speaker 01

  Yeah. Yeah. Well, um, and, uh, I did mention, uh, tomorrow's event is actually mainly for agents. You're going to be speaking tomorrow at the Bakersfield Association Realtors.

• 33:16Speaker 03

  Yes, that's correct. And then next week will be the I Room event. That's actually open to the public.

• 33:21Speaker 04

  And they hold that at the downtown Marriott. You can still get tickets through Irem, which is the management association of all the management companies. And the neat thing about that particular event is not only will I be a speaker there, but also they'll have an office specialist, a retail specialist. Typically, they have a lender, somebody in the agriculture industry, talking about all aspects of real estate. So it's about a two hour, two and a half hour event where you can get an overview on the entire market.

• 33:53Speaker 03

  Would you mind sharing with listeners, let's say you have a, three families that, you know, have some money and they want to become, they want to become investors. What does the process look like working with you?

• 34:06Speaker 04

  So typically, the families will come in and kind of explain what type of investment, because within the multifamily space, you can buy, you know, a value-added property, which is basically a fixer-upper. Or a lot of people want to buy pride of ownership buildings, where you can drive your in-laws by and go, oh, look, I own that. So depending on what you're looking for and what your price point is, we have a conversation to determine what that is, what markets or areas of Bakersfield you want to be within. Usually, if they're not paying cash, I'll connect them with a lender at that point, and then we start searching for it. And, you know, right now, it's, part of it's being patient to find the right property.

• 34:43Speaker 01

  Yeah. Do you feel like most of the time, people come in wanting pride of ownership, and then you have to explain to them that based on your price point, we need to do a fixer-upper?

• 34:54Speaker 04

  Yes, that, that does happen. Sometimes it's champagne taste and beer budget.

• 34:58Speaker 01

  Yeah, we want, we want turnkey, beautiful, great location, nothing to do. And then you're like, okay, how much you guys have?

• 35:06Speaker 03

  Now, what if you had a couple of families, or let's say you, you have someone, they just don't have enough for that big 35% down payment. Can you pool investors together? Or does that get sticky?

• 35:17Speaker 04

  Yeah, that typically what I'll do is at that point is I'll recommend to them that they, you know, bring in a friend or an acquaintance and that, you know, you guys pull the money together, you come up with a operating agreement either through an LLC or an LP and, you know, clearly define who is what is everybody's responsibility and then you then you move forward. And that's a great way to actually get into a bigger property than you typically could afford by yourself.

• 35:45Speaker 01

  So some of these things like you mentioned, you know, you're not a legal professional, but obviously a lot of investors protect themselves through structuring and different things. How do you handle that as a professional? Do you outsource it? Do you work with a couple locals, people here? Or do you kind of leave it up to the investors to do on their own? How do you handle that?

• 36:03Speaker 04

  You know, we'll make the suggestion that they talk to a business attorney and figure out what's going to come work best for their scenario. And that that conversation might involve their, you know, their financial advisor, their CPA, their attorney, and they kind of bring that team together and figure out what that structure is going to look like.

• 36:20Speaker 01

  Cool. Good deal. Well, thank you so much for joining us and educating our listeners. Is there anything else you'd like to share with our listeners about what's going on in the multifamily space?

• 36:30Speaker 04

  You know, I think long-term Bakersfield multifamily is going to do really well. I think the valley in and of itself has got a lot of potential for growth. And, you know, fortunately here in Bakersfield, the market has been, it's slow and steady. And as long as you're good with slow and steady, you're going to do fine here.

• 36:47Speaker 01

  Yep. I agree. I agree. Well, thanks for joining us today. I'm excited. We're going to get to participate tomorrow morning. So we'll see you there. Looking forward to that. And stick around. We got one more segment. We'll be right back.

• 36:59Speaker 00

  Need to get your financial fix on the go? If so, subscribe to the Money Wise Podcast and catch up on all past shows.

• 37:15Speaker 01

  This may be because somebody brought up gas prices, so Steven's coming back in hot.

• 37:21Speaker 03

  Nicely done.

• 37:23Speaker 01

  Thanks for making the Money Wise Show what it is. We love you guys. Thinking about you, Gero. Um, we did have a couple more questions come in, so let's jump on the first one. Hey, guys. Any clue why gas prices are back on the rise? I thought they'd be going down, but I guess I was way off. Trying to be money wise, but might be time to trade in my big old pickup. Have a great day, gentlemen.

• 37:46Speaker 03

  I think it'd be important for the listener to describe said pickup, so we could, we could break it down by regular or diesel.

• 37:53Speaker 01

  Yeah. Diesel blows me away, man. I can't believe it.

• 37:56Speaker 03

  I think a lot of it is, uh, some refining issues. We're just experiencing a little bit of a bump the last couple of weeks on the west coast. The rest of the nation isn't experiencing this, and I checked, and the national average, hold your breath, is $3.11. Not the Bakersfield average, right?

• 38:15Speaker 01

  That sounds amazing.

• 38:15Speaker 03

  But yeah, there's, there's refining issues. Um, I guess maybe some refineries are down right now, but again, I think a lot of it comes down to, I won't talk politics, but California regulations on everything said oil and refining and gas, et cetera. I think that's also, uh, another potential cause. And then there's, um, speculation too with Trump, uh, trying to make peace with Ukraine and Russia. Uh, Russia supplies a tremendous amount of the world's oil, and there could be a little quote unquote trickle down effect.

• 38:48Speaker 01

  Yeah.

• 38:50Speaker 03

  Nobody got the joke. All right.

• 38:54Speaker 03

  Trickle down.

• 38:55Speaker 01

  Okay. All right. So let's, uh, I guess move on to the next, uh...

• 39:00Speaker 03

  Ouch.

• 39:02Speaker 01

  Next question is what age does RMD stop? Well, RMD, you're referring to their required minimum distributions. They are what the IRS requires us if you own a retirement account and you have money in there that you've never paid taxes on, you have deferred taxes. They do require you to start pulling out a certain amount at a certain age. It's been going through changes now for a couple of years. Sometimes, you know, people finally start to understand, okay, 70 and a half, I have to start taking money out. Well, then they changed it to 72 and then they actually changed it again with the Secure Act 2.0 to 73.

• 39:46Speaker 01

  I have heard that there's kind of a scale based on your birthday. It's going to go all the way up to 75, so they won't require you to start until age 75 if your birthday falls within a certain parameter. But regardless, just so that you understand that it is a required amount that they make you pull out of your retirement accounts on funds that you have not paid taxes on. It starts at about 3.5%. Don't quote me on that. It's, it's, it's close to 3.5, maybe a little bit higher because the age has gone up now. Every year they have a table and based on your longevity table that the IRS has and, and your age,

• 40:26Speaker 01

  they require you to pull a certain percentage out and it's based off your December 31st account value. So the year that you turn 73, they're going to look at your December 31st previous year ending balance. They're going to calculate what you should pull out of that account. You have to pull it out and pay taxes on it. If you've listened to the show for a while, we talk about a distribution rate, you know, or the 4% rule and this and that. So most people are pulling 4% or 5% out of their account to survive on, right? To pay their mortgage payment or to enjoy retirement, to spend their money the way that they see fit. So they're pulling 4% or 5% out of their account already per year, which means they're quote unquote, "meeting their RMD annually."

• 41:10Speaker 01

  What age does it stop? The IRS does not stop. It is until the beautiful day that you exit earth. And then even then, it doesn't stop because you have the option then to leave that money to a spouse. It will go into their account. Most likely, they're of RMD age, so they have to continue to pull that out. If you leave it to what's called a non-spouse, a non-spouse inheritance, they have to start pulling money out of that account at a certain tune. And they also have to completely deplete that account within 10 years.

• 41:50Speaker 01

  So the IRS allows you to not pay taxes on the money as you're putting it in and saving for your future. But at some point, they want their taxes back. They're requiring you to start pulling that out. There's ways to be efficient with it, but not completely avoid it altogether.

• 42:08Speaker 03

  While we're on the topic, I can't stress enough to anyone listening to double check your beneficiaries on any retirement account, any investment account. I have a buddy of mine who was working for a prominent oil company in town. And unfortunately, he went through a divorce and it took this guy a year and a half to realize that his ex-wife was named as beneficiary on his 401k plan. So should something have happened to him? If I'm not mistaken, Chris, there's nothing anyone could have done. The money would have gone, correct? That trumps anything.

• 42:37Speaker 01

  Yeah, it could have been, it could have been contested. But it's hard to argue with, with that's what's, you know, they would have said, you know, well, why didn't he change it? He had a year and a half to change it. So definitely one of those things. There's a really, you know, the fancy word that we talk about when we talk about this is like estate planning. And everybody thinks about a trust, which a trust is definitely part of having your plan together. But I tell so many people, they're so intimidated by putting a trust together and jumping through hoops and getting that done, that they don't address like 80% of their estate planning needs that they can do right now. Which is literally talk to your bank. If something happens to me, I want this money to go here. How do I do that? Your retirement accounts, your 401k account.

• 43:20Speaker 01

  Make sure your beneficiary information is updated as much as possible in as many places as possible because that's ultimately what an estate plan is is if I pass, where does all this money go? What happens to it? And you can accomplish so much of that through just making sure your IRAs, your Roth IRAs, your 401Ks or 403Bs, if you are participating in a pension, a lot of times you need to have a beneficiary attached to those and you would be surprised at how often even very, you know, organized, smart, financially sound people, you just, you just forget about it.

• 43:56Speaker 03

  I want to say I was reading yesterday 35% of people over the age of 65 don't have a will or a trust. It was something like that too. And I know in California, you can literally write out a, write out a will on a sheet of paper and put your wishes with who gets your belongings, et cetera, et cetera. And as long as it's, doesn't have to be notarized, but it has to be witnessed and signed by two different people, I believe.

• 44:21Speaker 01

  Yeah. And the will, like we've, we've mentioned before here on this show, we're not, you know, legal experts, but a will is still going to be set in front of a probate court, judge, attorney, I mean, a judge, excuse me. And then it's going to be handled and you can avoid probate court altogether by executing a trust. And that can all be done outside of probate court. And I don't know if you've dealt with government courts and court systems, they're not the most fastest or efficient.

• 44:49Speaker 03

  I know, I know Bel Air dealt with a will.

• 44:52Speaker 01

  Yeah.

• 44:54Speaker 03

  Fresh Prince.

• 44:56Speaker 01

  Well, there you go. Thanks for making the Money Wise Show what it is. Thanks for joining us today. We would love to have Mark Thurston on here talking about multifamily investments here locally. Keep.