Pod Insights The Moneywise Guys 5/6/26 Taxes, Trump IRAs & Creative Lending in Today's Housing Market About this episode The Moneywise Radio Show and Podcast Wednesday, May 6th BE MONEYWISE. Moneywise Wealth Management I "The Moneywise Radio Show & Podcast" call: 661-847-1000 text in anytime: 661-396-1000 website: www. MoneywiseGuys.com facebook: Moneywise_Wealth_Management LinkedIn: Moneywise_Wealth_Management Guest: Ashley Weaver, Mortgage Broker & Owner of Esteem Lending Group website: https://elglending.com/ phone: 661-809-6508 The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision. Nick Gonzalez & The Bakersfield Symphony Orchestra are not affiliated with nor endorsed by LPL Financial or Moneywise Wealth Management].
Transcript 0:00 Speaker 00 Live from the basement inside the historic Woolworths Building in downtown Bakersfield. Call or text in at 661-396-1000.
0:09 Speaker 01 I need a dollar, dollar, dollar, that's what I need. Hey, hey. Well, I need a dollar, dollar, dollar, that's what I need. Hey, hey. Said I need a dollar, dollar, dollar, that's what I need. And if I share with you my story, would you share your dollar with me? Securities offered through LPL Financial, member FINRA/SIPC. Investment advisory services offered through LPL Financial. LPL Financial and MoneyWise Wealth Management are independently owned and operated.
0:37 Speaker 00 Now, let's start the MoneyWise Show.
0:40 Speaker 02 And welcome to the MoneyWise Show. We are live from the basement of the historic Woolworths Building in downtown Bakersfield. For the next hour, you are on News Talk 96.1 and 1230 AM, KERN, streaming live at MoneyWiseGuys.com. You can call or text into the show 24 hours a day at 661-396-1000. We are your hosts. I'm Sharad Wait and...
1:07 Speaker 03 Seth Perry.
1:07 Speaker 02 Hey Seth.
1:09 Speaker 03 How are you, sir?
1:09 Speaker 02 I'm great. How you doing? You're running, I see you running around the office a lot this morning.
1:14 Speaker 03 Just cruising around, running around.
1:15 Speaker 02 Yeah, yeah, just running around.
1:16 Speaker 03 Like I tell everyone, I've learned very good to give the appearance of you're working hard so that, you know, people don't bug you, you know?
1:23 Speaker 02 That is not you. I know you better than that, Seth. Hardworking man. You do a lot at MoneyWise. Great doing the show here with you.
1:31 Speaker 03 Yes, sir.
1:32 Speaker 02 We got a listener question. I want to remind all our listeners, this is, this is something that really does power our show is listener interaction. Texting is the easiest way to do that, 661-396-1000. Let's read this message.
1:48 Speaker 03 Let's do it. Enjoyed the show yesterday, or the day before, where you guys got into some tax help. As a business owner out here in construct, in the construction world... Are there deductions or some tax rules you may see that are being missed because they don't realize?
2:06 Speaker 03 I think that's so how to apply them with the cost of everything from service, equipment costs, just trying to save without hurting our style of business.
2:15 Speaker 02 Ah, good question.
2:16 Speaker 03 Mr. Dominguez.
2:17 Speaker 02 Thank you. Thank you for that question and bless your heart for being a construction person, owner. That is a business that I have so much respect for. It is the, you know, the, the so much of the lifeblood of our society are, are general contractors.
2:39 Speaker 03 Is there a more cyclical or like, um, gosh, what's, what's more cyclical than that or not cyclical, but unpredictable ups and downs.
2:47 Speaker 02 It is.
2:47 Speaker 03 Hire people, then you gotta get rid of them and.
2:49 Speaker 02 Yeah.
2:50 Speaker 03 It's difficult.
2:51 Speaker 02 It's definitely a difficult, difficult business. It is certainly not recession proof. Obviously, you know, construction business can be pretty diverse and broad in terms of what kind of construction. There's lots of different kinds. There's obviously more risky types of construction than there are than others. And so, but there, what I have found in my experience over the years and working with individuals and families and business owners is that with construction workers, it is a, you have generally a lot of capital expenses or investments that you have to make in not just personnel, but also in equipment.
3:35 Speaker 02 And there, there's also a lot of regulation and.
3:41 Speaker 03 Insurance.
3:41 Speaker 02 Insurance risks that, I mean, anytime you're dealing with people and you have employees that are driving around.
3:49 Speaker 03 Using equipment that can cut your hand off in a second.
3:51 Speaker 02 Or you could die.
3:52 Speaker 03 Swinging things or yeah, on the bigger jobs. Yeah. You can get, there's really no construction job that you can't get.
3:59 Speaker 02 That's right.
3:59 Speaker 03 Badly hurt on.
4:00 Speaker 02 Yeah, I mean, it's just, you know, it's just, it's very, very difficult business and, and then, you know, to, to succeed, not succeed, but generally, construction business owners aren't just one person, you know, they have lots of employees, or they have to hire a lot of people to, to do the jobs, and so that just equals more risk. But the listener question Seth is really asking more specifically about tax rules. And this is a common theme that we've gotten in questions this week is people asking about how we can take advantage of the tax codes.
4:40 Speaker 02 I think a lot of people are now just getting their tax returns or paying their tax debts.
4:46 Speaker 03 Yeah.
4:46 Speaker 02 So it's top of mind right now.
4:48 Speaker 03 Yep.
4:48 Speaker 02 And the good news is, is that the tax code, at least in our country, here in the United States, still requires a lot of art and nuance. And that nuance can benefit not just the ultra wealthy, but it can also benefit the average or middle-class person. You just kind of, you need to know some of these things. And my first recommendation is, especially if you're a business owner, be, I would recommend hiring a professional to help you with your taxes.
5:20 Speaker 03 The right professional.
5:21 Speaker 02 The right professional.
5:22 Speaker 03 The right professional.
5:22 Speaker 02 But I mean, just get a professional.
5:24 Speaker 03 Yes.
5:24 Speaker 02 Because some, some do it there on their own. And that is just mind-boggling to me. Business owners, I get it, you're trying to save money and CPAs are not cheap, but you're just gonna have to bite the bullet. That's just a mandatory expense.
5:38 Speaker 03 It's cliche, but you get what you pay for, especially when hiring a highly qualified CPA, just in the tax savings they can save you over two, three, four, five years, more than, usually will more than cover. That's what might seem like a big price tag, but when you look at the amount of money you're saving.
5:55 Speaker 02 Yeah, yeah, definitely. Right? That's a good point. Same thing with attorneys. I mean, nobody likes to have to pay your attorney to do whatever it is that you need legally, but the idea is that you get your, you at least save money by hiring that professional versus just trying to do it on your own. The same is with CPAs and tax accounts. So the things that I want to mention now that you should, all business owners should be aware of, but specifically if you're in the construction business, I'm going to list some of these things, but be aware that your CPA or your tax professional should be aware of all of these things. If they are not aware of some of these things, then you need a new tax professional.
6:35 Speaker 02 I'm not saying that all these things will apply to you, but these are things that are commonly, I'm not a CPA, you're not a CPA, but these are things that we're aware of. So CPA should definitely be aware of these things. Now, as I mentioned, construction workers, there's a lot of equipment and vehicles. So that means deductions. That means when you buy a heavy truck or a work van or a trailer or an excavator, whatever it is, whatever that big piece of equipment is, you qualify what's called Section 179 expensing or a bonus depreciation. This is, this is used primarily by business owners, but it's a way that you can deduct a very large portion,
7:15 Speaker 02 if not the entire portion of what you paid for that equipment right up front, rather than doing it over time and, and, and having that deduction phased in over time. You can take it right up the front. Now, that's a great benefit, but what some business owners do is come December, the end of the year, they think, well, I gotta buy some equipment so that I can get that deduction. What's the problem with that?
7:39 Speaker 03 Spending money, maybe borrowing money to try to.
7:42 Speaker 02 Just to save, you know, save 30%.
7:45 Speaker 03 Yep.
7:45 Speaker 02 You know, so it's like, well, it's like the old, you know, joke about, well, I'm going to go, this is on sale, so I'm going to go buy it so that I can save 30%. It's like, yeah, but you still lost the 70% and whatever crap that you bought.
7:56 Speaker 03 I have been very victim to that even, even recently. If there's, you know, you just. It's 30% off, right?
8:03 Speaker 02 Yeah, I'm making money off of this.
8:05 Speaker 03 I tell my wife, just hey, love, just because it's on sale does not necessarily mean it's something that we need at this point.
8:11 Speaker 02 Yeah.
8:12 Speaker 03 She'll buy it anyway, but.
8:13 Speaker 02 Never, never buy equipment, and this includes a house or anything just for taxes.
8:18 Speaker 03 Yeah.
8:19 Speaker 02 You know, $100,000 purchase to save $30,000 still means you spent $70,000. And it's likely because you're trying to get it in before the end of the tax year. You're thinking, I just want to get that tax deduction. It's like, no, what you should be thinking about is this purchase going to improve productivity? Is it going to, is it going to improve our capacity? Is it going to make us more money?
8:39 Speaker 03 Yeah, more revenue.
8:40 Speaker 02 How we can make our money back from this? It just, it's a benefit that you're going to get a tax break on it. But at the end of the day, what you're spending, you need to make sure that that makes sense first. And I think that can be easy to fall prey to, especially if you see that nice new fancy truck and you're going, oh, I want to do it. And it's like, well, now keep your old truck. Don't, don't worry about that new deduction yet. Some things that a lot of business owners and self-employed people forget about or leery of is the home office deduction. So many contractors avoid this because they're thinking that's going to trigger an audit. When actually there's legitimate reasons that you can deduct a home office if you're doing things at home. For example, you're, you're managing the schedule, you're doing bookkeeping.
9:23 Speaker 03 Emailing clients, putting bids together.
9:26 Speaker 02 Dispatching crews, you're giving, you're, you're making estimates, you're doing things from there. So if you have a dedicated home office space, it can absolutely qualify for that deduction as well as mileage expenses and actual expenses. A lot of contractors and construction owners under track their mileage or they mix their personal and business driving, or they just failed to document it at all. The good news there is technology definitely helps. There's apps now that you could just, you don't even have to do anything. It runs in the background. It knows when you're driving. It knows where you're driving and it can kind of figure out what your mileage is so that you're reporting that and getting all of that deduction as needed. Of course, all your cell phones, internet, tablets.
10:10 Speaker 02 Let's offer that's often commonly under claimed. And another thing is as a business owner, there are some perks there is you. That means you can hire who you want to hire, which includes hiring family members. This could be a total nightmare. Don't hire a family member again, just to get the tax break. But if you know your immediate family, I'm talking your, you know, your spouse, your kids. Paying your children for legitimate work or for administrative support from a spouse. Just for bookkeeping help, for example, has some big benefits. You can shift that income into a lower tax bracket. You can, this can also provide the opportunity for you to fund a Roth IRA for your kids.
10:55 Speaker 02 You know, and they don't have, they have to do legitimate work, but it doesn't have to be complicated. And that can be huge because Roth IRAs are also a great way to save for college. And if you, I'm sure I know you're familiar with this, but.
11:11 Speaker 02 A 529 plan, which is that college savings plan is, is good. It's not for everybody, but it comes with some downsides in that you have to use it for education. Or higher education or, or training. And.
11:31 Speaker 03 It can be used for K 12 now.
11:33 Speaker 02 Yes.
11:34 Speaker 03 Federally, but not, you still have to pay the gains in state tax.
11:37 Speaker 02 In California?
11:38 Speaker 03 Yeah.
11:39 Speaker 02 That's a bummer. California needs to fix that. But the, but there's, there's still a situation where maybe it's not K through 12. Maybe your kid doesn't go to college and so he's like, well, why did you save this? And then all you got was the tax, tax deferral. And, and, and you're not getting that tax free growth. Whereas with a Roth, you could pull the principal out of your Roth IRA and use it for whatever you want. Right? There's no, there's no penalty or problems with that. And that means that you could save, or if you started a Roth for your kids, they could use that money for college, or if they don't go to college, they could use it for their wedding, or they could use it for something else, right? And it has a little more flexible. So if you qualify, remember, not everybody qualifies to contribute to a Roth,
12:23 Speaker 02 but if you qualify, I think it's a great way to help save for retirement.
12:27 Speaker 03 Typically, if you're, I think it's your modified adjusted gross is less than 242, something like that, if, if that family you're bringing in less than 242, then you can contribute to a Roth.
12:37 Speaker 02 Yeah, yeah.
12:38 Speaker 03 So, great, great tool, great vehicle. I, I wanted to add to something I was unaware of at the time, but I used to take a home office deduction. So it's 10% of all of the fees associated in expenses, not fees, expenses with your house. So if I have a home office, that's 10% of my total square footage, then again, consult with your, your CPA. But you should be able to take 10% off of the utilities, internet, if you have HOA fees, homeowner's insurance, general maintenance and repairs, and, and property taxes as well.
13:12 Speaker 02 That can add up.
13:12 Speaker 03 Oh, yes.
13:13 Speaker 02 It can be pretty decent.
13:14 Speaker 03 If it's a big office, you know, you don't, you're not gonna lie, but if it's a, one of your larger rooms, say it's 15%, that's a, that's a nice, very nice deduction.
13:22 Speaker 02 Yeah, very nice. And a lot of self-employed people do that work at home. You can't escape it. You're, you're kind of forced to work from home regularly. So, there you go. You know, I think there's some, there's some, some tips for you. All of these are questions that you should be able to bring up to your accountant or your tax professional, including how your business is set up. Maybe you're an LLC, maybe you are a C corp. There are, for certain income levels and certain companies, an S corp, especially for contractors, could potentially reduce some of your self-employment taxes significantly. So that's another question to ask your accountant is,
14:03 Speaker 02 you know, do we need to convert or change the, the structure of your company?
14:09 Speaker 03 I don't know if it's this way across the US, but particularly here in Bakersfield, one of the common things I see with business owners is they don't take advantage. Of any retirement plan, especially if they're a sole proprietor or, you know, they're, they're excited and rightfully so, want to reinvest a lot of the money back into their business. But if they could start to sock some money away into these various retirement plans, that comes right off the top, right?
14:34 Speaker 02 It does. Yeah. And, you know, it's, I think the, I think what stops people from going into some of these retirement plans is they think that it's going to lock up or tie up their money and there's going to be penalties. And the, the truth of the matter is if you can save money and taxes upfront, that oftentimes will be a far greater benefit than whatever penalty you may experience. We have a listener, another message here, Seth, that says, I'll go ahead and read it, says, will, will these Trump IRAs be allowed in all states? So I don't know if you're even aware of this because this was just announced yesterday. So I don't know if you even saw this, but-
15:13 Speaker 03 Is this the same as the, like, the, the Trump child account?
15:16 Speaker 02 No.
15:16 Speaker 03 It was a separate?
15:17 Speaker 02 It's separate.
15:18 Speaker 03 Interesting.
15:18 Speaker 02 It was just announced yesterday or day before yesterday. Yeah. And it is really interesting. It is a, they're calling it a Trump IRA. This was announced by an executive order just a few days ago. And what it is, is it's establishing a, a, a method for Americans to save their, into their IRA and then have the government match up to a certain amount. For an individual, it can be a thousand dollars. For a, a household, it's $2,000. So that's a significant bump, right?
15:55 Speaker 03 It's huge. Sounds great, but how in the heck are they going to afford it?
15:58 Speaker 02 I know. I, well-
15:59 Speaker 03 It's going to come as a, probably a tax deduction. So it's less revenue they're going to earn, the government that is.
16:05 Speaker 02 That's right. Yeah. I mean, it's definitely like money out of our taxpayers' pockets. But what else are we paying out of our pockets right now? We're paying for Medi-Cal, we're paying for poverty programs because people don't, didn't save. We have to incentivize them to save some. And I would prefer there to be this private-public cooperation-
16:27 Speaker 02 And so that the so that at least privately, they have some money rather than
16:32 Speaker 03 You have control over how it's invested.
16:33 Speaker 02 You do.
16:34 Speaker 03 You do.
16:34 Speaker 02 Yeah, so what's gonna happen is, and again, this was just explained the other day by President Trump, is that the the government is going to set up a website, trumpira.gov, and it's going to connect workers with high-quality, low-cost IRAs that are offered by financial companies that are in the private sector, so they're not government companies. They'll be private-sector financial companies that the government is going to vet, so that they're low-cost. And they will, starting in 2027, so starting next year, this is this will go live. There's income limits that are attached to this.
17:18 Speaker 02 That means not everybody can contribute to these Trump IRAs. You have to essentially be below the poverty line.
17:26 Speaker 03 Okay.
17:27 Speaker 02 For an individual, that means you can't have income that exceeds $20,500 a year. And that's where you can get that full $1,000 match. If you're a married couple, then a joint, if you're filing jointly, then it can't be more than $41,000 to qualify for the full match.
17:48 Speaker 03 Yep.
17:50 Speaker 02 The reason that this kind of got some media attention the other day is because in this announcement, President Trump had mentioned that this was going to build an estimated, that people would get rich from this, but that this is gonna make a lot of people rich. And Trump threw out the figure of $465,000 nest egg. And that's assuming that somebody starts contributing when they're 21 and goes all the way till they're 65, and puts the maximum amount into the Trump IRA, and then qualifies for that maximum match
18:27 Speaker 03 Yeah.
18:27 Speaker 02 for those for those years. And so that that kind of sounds good on the surface until you start thinking about, well, who's the individual that's making $21,000 a year and saving $7,000 a year?
18:42 Speaker 03 Exactly.
18:42 Speaker 02 And then never making more than that so that they can qualify for that full match. Like it's not.
18:48 Speaker 03 Especially here in California, if you are holding down a job at Jack in the Box, since they're part of a large corporation, they're held to the $20 an hour minimum wage. If you work full time there, 40 hours at $20 an hour, 40 hours a week, 48 weeks, that's $38,000 a year. So basically for the folks working less than 20 hours, it might make sense here in California, but.
19:13 Speaker 02 Right.
19:14 Speaker 03 Interesting.
19:14 Speaker 02 Yeah, it's just not, not, not a realistic number to throw out there. I mean, if somebody can go 40 years and keep that low of an income and save a third of their income, then bravo.
19:26 Speaker 03 I haven't heard much buzz about the, the child accounts, the.
19:30 Speaker 02 Yeah.
19:31 Speaker 03 I know they're still working it out. I don't know if anything's been.
19:34 Speaker 02 Yeah, I wonder if there's anything new. You're talking about the child.
19:36 Speaker 03 Yeah, yeah.
19:37 Speaker 02 It's a.
19:38 Speaker 03 What's the name?
19:39 Speaker 02 Yeah, it's.
19:40 Speaker 03 That was a cooler name than that, but.
19:41 Speaker 02 It does, it say, that's another interesting program. I can't even remember now if there are income limits on that.
19:50 Speaker 03 I think so. I think there were.
19:52 Speaker 02 Hmm. Yeah. So, yeah, this is different. This is different than that, that the, the child, you know, just somebody, a kid that's born. After last year, they become eligible for that Trump credit, child Trump credit. And that's, that's a totally separate program. I'm, I'm all for responsible, small government. That is, you know, I'm a big advocate for that, very fiscally conservative. I consider myself very conservative in terms of, of fiscal management.
20:34 Speaker 02 But this is an area, there's a couple of areas here where I think I, I, I disagree with some of my fellow conservative finance people. And that is, there's, there are, there are places where the government can spend money that is an investment, where we get a true return. From the money. I think these types of programs that incentivizes people to individually contribute their own money for their long-term savings is going to be essential. Since we are now in a time when 401ks and individual retirement accounts have overtaken traditional pensions that no longer really exist.
21:17 Speaker 03 Yeah.
21:17 Speaker 02 And, and you know, starting in the, in the seventies and eighties, we started, when 401ks were created, we essentially saw a huge decline and continue to see a huge decline in companies or employers that offer a pension. That's put all of the burden on the individual and how well are we doing with that? Not great.
21:35 Speaker 03 It's not looking good.
21:36 Speaker 02 It's not looking good.
21:37 Speaker 03 It's not looking good. If you don't believe us, just look up, you know, average retirement savings by age. And that's always kind of a, there's a few different studies out there, but it gives you kind of a rough idea of where you stand against your peers. And those averages are very low, very low.
21:52 Speaker 02 Yeah.
21:52 Speaker 03 For someone that wants to, you know, hang it up and start collecting social security and then
21:57 Speaker 02 Yeah.
21:57 Speaker 03 Have enough money to live even 60 or 70% of the lifestyle they're used to.
22:03 Speaker 02 Yeah.
22:03 Speaker 03 You really do have to have a plan.
22:06 Speaker 02 The other, the other place that I, I feel like the government, it's a good way for the government to spend money is in infrastructure projects.
22:13 Speaker 03 Oh, yeah.
22:13 Speaker 02 I know they're not popular because you're looking at the government spending hundreds of millions of dollars on some bridge that you're never going to go across. Or some highway that you're never going to drive down. But even if it's not in your state or in your city, it, it studies have shown that the return on investment for infrastructure projects is, is really good.
22:33 Speaker 03 Yeah.
22:34 Speaker 02 It's decent. It's somewhere around six or seven percent annualized return for every dollar that goes into these types of projects. Now they just don't come back in the way that people expect.
22:43 Speaker 03 Yeah.
22:43 Speaker 02 You're getting a check in the mail.
22:44 Speaker 03 Yeah.
22:45 Speaker 02 But you're, you're, you're getting less wear and tear on your car and your tires. You're getting to work quicker.
22:50 Speaker 03 Look at the freeway, look at the, the West Side Parkway. How many years has it been now? I mean, it seems like, it's been a few years.
22:55 Speaker 02 But doesn't like, can you imagine now Bakersfield without the West Side Parkway?
22:59 Speaker 03 No.
23:00 Speaker 02 Like I remember getting stuck on. Roseville Highway, you know, or
23:04 Speaker 03 I remember a coffee, the, there wasn't an overpass. You drove right through the, right through the train tracks right there.
23:09 Speaker 02 Yeah.
23:10 Speaker 03 Remember that?
23:10 Speaker 02 Yeah, it's, I mean, that's thing still happens, but at least now I'm shocked. I've seen, I've been in traffic jams on West Side Parkway now.
23:17 Speaker 03 Oh, yeah.
23:18 Speaker 02 It's crazy.
23:18 Speaker 03 So the key for those westsiders coming in to work downtown, I haven't figured out, you just stay in the slow lane.
23:24 Speaker 02 Oh, yeah.
23:24 Speaker 03 And you'll see cars jockeying for position and I'm just sitting there.
23:27 Speaker 02 Yeah.
23:28 Speaker 03 Mind of my own business in that middle lane.
23:30 Speaker 02 Yeah.
23:31 Speaker 03 When you cross over, you just, you play the long game.
23:33 Speaker 02 Yeah.
23:33 Speaker 03 And then I'll pull up next to somebody that was darting around, you know, and I have less stress, less anxiety.
23:38 Speaker 02 How about getting out, like going home from downtown, from working downtown, if you leave like around five?
23:44 Speaker 03 Oh, it's, it's, it's bananas.
23:45 Speaker 02 It's a little bananas.
23:46 Speaker 03 Stay a little later sometime.
23:47 Speaker 00 I've learned to not do that. Yeah.
23:48 Speaker 03 You either leave at 4:30 or you leave at 5:20.
23:52 Speaker 02 Yeah, 5:20 and then you're fine.
23:54 Speaker 03 Don't leave it.
23:54 Speaker 02 But even at that, like Truxton, Truxton will get backed up a little bit until you get past Oak and you get closer to the West Side Parkway. But even then, like worst case scenario is an extra five minutes.
24:07 Speaker 03 Yeah.
24:07 Speaker 02 You know?
24:08 Speaker 03 Yeah.
24:08 Speaker 02 You're stopping at the lights and it looks bad because you're looking down Truxton and you're going, oh.
24:12 Speaker 03 I was so cautious moving downtown and I love my commute downtown now.
24:16 Speaker 02 I do too.
24:17 Speaker 03 It's a little unwind time on the way in and the way out.
24:20 Speaker 02 I love it too. I love it too. I love working downtown. I love it. Been so great. Well, thank you listeners for those questions and comments. Please keep them coming our way. 661-396-1000. That's the number that you can call or text 24 hours a day. Again, 661-396-1000. We're gonna take a quick break. When we come back, we're excited to be joined by our guest, Ashley Weaver. She is owner of Esteem Lending Group. We're gonna talk to Ashley about borrowing and about owning a business. She's an entrepreneur and a local lender here in town. We'll be right back. We're Money Wise.
25:09 Speaker 02 Thanks for tuning in. We're Money Wise. 661-396-1000. That's the number you can call or text anytime. Doesn't have to be during the show. It could be 24 hours a day. We're excited right now for our guest today, Ashley Weaver. She is a mortgage broker and owner of Esteem Lending Group, friend of the show, longtime friend, first time guest. Ashley, welcome to the show.
25:34 Speaker 04 Thank you. Nice to be here.
25:35 Speaker 02 It's great having you. I woke up this morning and I read an article that popped up in my news feed. And the article mentioned a growing trend among home buyers in the state of California, a trending home option. And this is, the article went on to talk about the challenge that we have as Californians to get into a home just in the first place. Part of the problem is Prop 13, which is the proposition that essentially keeps our property tax stable,
26:12 Speaker 02 has also created the unintentional consequence of people staying in their home for a long, long time because they don't want to get a new tax basis. And so it hasn't freed up some of the inventory. And of course, we just continue to see home prices go up and up. So you came at a perfect time because we want to talk about the creative ways. Let's talk about some of the creative ways that we have that are available to people to be able to finance a home, buy a home.
26:44 Speaker 04 So we're just jumping into the creative financing.
26:46 Speaker 02 Yeah.
26:47 Speaker 04 I think that's great because a lot of, you know, potential buyers out there that wish to be homeowners, they know conventional, you know, they need to have W2s, they need to be on their job for, you know, two years plus. They need to have exceptional credit. This is the perception that people have that want to buy a home. And they don't know that now there are so many different loan programs out there that can allow them the option to not only buy a home, but even those buyers that... Couldn't, you know, when we talk about affordability, right here in Kern County, we have the opportunity to still purchase a home here in California, but the affordability
27:31 Speaker 04 is an issue. And these alternative financing options allow people the opportunity to buy without fitting into that conventional mold.
27:41 Speaker 02 I've heard, it's like nails on a chalkboard when I hear somebody say, I'm saving for a home, I'm saving for a down payment on a home. Oh, how much money have you saved? Well, I've got $30,000 saved. I'm thinking, why are you saving so much money for a down payment? It seems like an old way of thinking is you don't need that much money down payment to buy a house, correct?
28:04 Speaker 04 Yes, absolutely. And, you know, I've actually had this recently from one of my buyers that I met through an open house. And talking with them at the open house, they had that same mentality that they need to save all of this money in order to get into a home. And they said, during our time saving, we've watched home prices rise, we've watched interest rates rise, and now we're at a place where if we would have bought a few years ago with the minimum down, we would have made so much more in equity.
28:38 Speaker 02 Yes. And they wouldn't have had that money tied up in a home. Now, I'm all for home ownership and home purchasing, but homes on average, the rate of gains, the average appreciation of a residential home, about 4%, right? Yeah, just above inflation. Homes have essentially just kept up with inflation. Now, I know recently that people aren't going to believe that because they're looking at the last 10 years. Oh, that's impossible. Or they're just looking at Bakersfield or whatever. But the truth is, the real moneymaker for owning a home is the fact that you're paying your own mortgage. You're not renting and paying your landlord's mortgage. Like you're accruing and accumulating equity on
29:21 Speaker 02 your own. That's where the real power is. It's not that because homes are just going to continue to go up at double-digit rates.
29:30 Speaker 04 Well, and I think even right now, people are looking at the market as a whole. And I've had a lot of buyers, when we look at 2026 and where we started, right? Interest rates on the conventional side had started to go down. I mean, we were, I was quoting conventional interest rates in the 5.6, 5.75. We haven't seen that in a minute. And so then people start calling and the market starts to shift a little bit. And that, that opportunity window was very short. And now we've already, you know, gone back up to the lower 6% on conventional loans. But really the difference between that, and I think this is where the education to, to not just homeowners
30:14 Speaker 04 that are looking to refinance, but for people looking to get into a home. The difference between a 5.875 and a 6.125 in a payment is not significant when you look at the monthly payment.
30:28 Speaker 02 Yeah.
30:29 Speaker 04 It's all about the understanding of where this fits into someone's budget. And they wouldn't know that unless they, you know, took that first step to call a lender and, and talk through numbers.
30:40 Speaker 02 Yeah, let's talk about maybe some of the other misconceptions that people have about buying a home. We, we, we addressed the, the down payment, the interest rate. It's, you say six and a quarter, let's say it's six or six and a quarter for a 30 year fix. That's like, that's right on average, historic average, right? Do you know what it is?
31:00 Speaker 03 Last 50 years, conventional 7.7. So we see.
31:04 Speaker 02 It's like a deal.
31:05 Speaker 03 I'm just waiting until interest rates go back down to where they were in, in 2021, which was historically, probably never will see that again. What do you think though? Like what, if you had, I know you don't have a crystal ball, but will we get into the fours or fives?
31:20 Speaker 04 I mean, I would like to hope so. I, I think the fives definitely, and I mean, if we look at history, did we ever think we would see the, the 2%? And we did. And so to say that that will never happen again, um, you know, I, I think, and I hope that, you know, definitely the, the 3% again.
31:40 Speaker 04 But waiting for that, the opportunity you're missing.
31:43 Speaker 02 Yeah, that's a mistake.
31:44 Speaker 03 Yep.
31:45 Speaker 04 Yeah.
31:45 Speaker 02 We've always said the right time to buy a home is when you can afford it. It's not when you think the markets are going to go up or down. It's when your own personal finances can't afford it.
31:59 Speaker 03 That's it. And a lot of, you rarely hear someone say, oh, man, I can't believe I bought my home. The only time is if they got into too much house they can't afford and it's come back to bite them. Or maybe a balloon payment or interest rate of some kind. And so, just like we were talking CPAs earlier, it pays off to work with a professional. When it comes to, you know, whatever the other rocket mortgage or whatnot, you know, that you can get online. You want to work with a pro, local pro, so that you can have all of those other options available to you.
32:30 Speaker 04 Well, I'm glad you said that because this is my, 2026 will be my second year. Opening my own mortgage brokerage and in doing that, you know, I had an idea and this vision of what I wanted the company to represent. And mean, and you know, the level of trust and integrity that goes into a mortgage. When you qualify somebody for a home loan, a lot of times you're using gross income to qualify them. Do you know anyone who sees gross income in their bank account each time they get paid?
33:05 Speaker 03 Right.
33:06 Speaker 04 So when you talk about, you know, it fitting into somebody's budget. Finding a lender that cares enough to ask you, instead of telling you what you qualify for. Let that lender say, what are you comfortable with? If you can envision and wave your magic wand, what do you envision your mortgage payment not exceeding? Where are you comfortable? And based on that, you kind of work backwards. Okay, this is where you're comfortable, this is how much home you can afford.
33:35 Speaker 02 Yeah.
33:36 Speaker 04 And then that way, the buyer has a sense of comfort and trust. And when they go out there and they start shelling out money for appraisals and inspections and all of this, at the 10th hour, they're not saying, oh, hold on.
33:48 Speaker 03 Yeah.
33:50 Speaker 04 Can I do this? Should I do this?
33:52 Speaker 03 Yeah, they go in confident. I like that.
33:53 Speaker 04 Yeah.
33:54 Speaker 02 And so maybe can you can you share with our listeners some of the creative ways? Or you mentioned when you started the mortgage brokerage company, you wanted to kind of do it differently. How, what are some different ways that maybe people haven't thought of that they can qualify or buy a home?
34:14 Speaker 04 So typically, when we talk about home loans, we're thinking conventional FHA, VA. Those are the normal, right? The ones that have been around forever that have these guidelines that we have to fit into. There are now loan programs that, you know, tailor to, let's say, self-employed buyers, okay? Self-employed buyers don't like to give their tax returns.
34:40 Speaker 02 I wonder why?
34:42 Speaker 04 Because they don't necessarily show the income that truly represents what that business is doing.
34:48 Speaker 02 Yeah.
34:49 Speaker 04 So they've come out with something called the bank statement loan, where based on the financials, you can provide a two-year or a 12-month bank statement, bank statements that will then take into consideration the business's deposits minus an expense ratio. And that is how we can calculate income in lieu of doing tax returns.
35:13 Speaker 02 Nice.
35:14 Speaker 04 So not only does it help increase someone's income to help them qualify for a home, but it also decreases how much paperwork and documentation we're asking of a buyer.
35:26 Speaker 02 Yeah. What about hard money loans? When, when would that, when would that be appropriate?
35:32 Speaker 04 Hard money loans are one of my favorite.
35:35 Speaker 02 Do tell.
35:36 Speaker 04 Yes, I've been doing hard money loans since 2012.
35:43 Speaker 02 Nice.
35:44 Speaker 04 And it's great when you get a buyer that can benefit from a hard money loan that had never heard of one before. Hard money, what it is in definition is it's a, it follows a regular loan. There's nothing funny. There's, you know, an actual deed of trust. There's a note, the same as you would in a regular conventional loan. The difference is, instead of a bank that has all of these guidelines and these restrictions in order to qualify, the hard money is funded by personal investors and it's equity based. So you do have to have a higher down payment in order to qualify for the loan. But if it's an investment property, that's all we're asking of you.
36:26 Speaker 04 So the guidelines and the qualifications to get into this type of loan are significantly less than conventional. So then let's say who would benefit, who would do a hard money loan?
36:37 Speaker 02 Yeah.
36:38 Speaker 04 So if you have an investor that wants to pick up a rental property that may be a distressed property, it needs some rehabilitation, like it's not going to pass conventional appraisal, hard money will do it as is.
36:51 Speaker 02 Yeah.
36:52 Speaker 04 You can-
36:53 Speaker 02 It's almost like a stopgap or like a, you know, just, it's like a temporary, nobody keeps a hard money loan for too long. I don't, I'm guessing, but it's kind of like to get them through, to get other kind of financing or to flip a property.
37:08 Speaker 04 So for that first scenario, I would say yes.
37:10 Speaker 02 Yeah.
37:10 Speaker 04 But on the sec, on the flip side of that, you also have people who have a tax identification number, not a social, and will hold that loan for a full 30 year term.
37:20 Speaker 02 Oh, wow.
37:21 Speaker 04 Yeah. So there are some people who take advantage of hard money that just can't go conventional and it will be a regular, fully amortized, you know, whatever they need, the 10, the 15, 20 or 30 year loan.
37:35 Speaker 02 Gotcha.
37:36 Speaker 03 Interesting.
37:36 Speaker 02 What's a non-QM?
37:38 Speaker 04 So non-qualifying mortgage is any loan that's outside of your conventional guideline.
37:44 Speaker 02 I see, I see. And, you know, back in the day before the great financial crisis, a lot of the blame for the, for the crisis was the fact that lending standards were so loose, right? You know, if you could fog a mirror-
37:59 Speaker 03 If you had a pulse, we'll give you half a million dollars.
38:02 Speaker 02 Yeah, and it was like, I mean, it was so crazy. And of course, locally, we had lots of issues, the Crisp and Cole thing.
38:09 Speaker 03 All kinds.
38:10 Speaker 02 The, are there any of these sort of exotic loans out there again? I'm thinking of like, you know,
38:22 Speaker 04 Stated income?
38:23 Speaker 02 Yeah, stated income, but also the, um, where it's like adjustable rates, you know, like, like severe adjustable rates, you know, like after, you know, one year or three year adjustable rates. Are those still popular?
38:36 Speaker 04 So, I think, so yes, adjustable rate mortgages are still around. Stated income loans are also still around. What you don't see are those two together anymore. So, a lot of loans that were happening back during the crash were a combination of them. They were adjustable rate mortgages that were qualifying people on the lower amount, and they were using stated income, and they were also doing a minimum down payment. You put all of those together and you have a not so good loan, once that loan starts adjusting and that payment increases. Nowadays, when you do an adjustable rate mortgage, you're basically just offering that buyer the lower, you know, interest rate initially, and then there is that risk
39:21 Speaker 04 based on whatever the market is gonna do at the time that it starts adjusting. But, it's not as risky because typically that buyer's being evaluated, you know, to, to be able to qualify for the higher amount, and so, it's a different level of qualification that wasn't there in the past.
39:41 Speaker 02 Yeah, it's good to know. I think for our listeners, financial security, a huge part of financial stability and security is owning your own home, so getting into that home is the, is, is key. You don't want to be irresponsible, but, you know, get into a home as soon as you-
39:59 Speaker 03 And it doesn't have to be the perfect dream home you've just always wanted, or just the right neighborhood. If you can just get in to a house that's relatively safe neighborhood, like, you're never, almost never gonna regret that, as an appreciating investment.
40:13 Speaker 02 Right.
40:13 Speaker 03 And for those of you who haven't owned your own home, one of the coolest things I always share with people is when I, when I swept my, or swept, when I swept my sidewalk the first time, my driveway. It just feels different.
40:24 Speaker 02 You got excited about that.
40:26 Speaker 03 You're not, you're not, you're not, you know, you're not, it's your driveway, that's your tree, that's your, you know, whatever, right?
40:31 Speaker 02 Yeah, nobody can tell you what to do with it.
40:32 Speaker 03 But it's just so special.
40:33 Speaker 02 Yeah.
40:33 Speaker 03 Couple of really good, uh, comments and questions, so-
40:35 Speaker 02 Yeah, let's go.
40:36 Speaker 03 Listener says, "How is the local housing market compared to five or six years ago? Almost typed six to seven, but catching myself to stop using that term, lol."
40:47 Speaker 03 So they're wondering how is, how's the housing market compared to five or six years ago? Is it better, worse, or is it about the same?
40:56 Speaker 04 How to describe that? I would say, let's start with where we are now, which is the market is healthier. And home prices, even though you hear a lot of talk and chatter about the, you know, market crashing, we're going to see another crash and people waiting on that. I would say that home prices right now are staying steady. We have not seen a rapid decline, although we do not have, a lot of times, or we still do, but we don't have as much a multiple buyer, multiple buyers offering on the same home, which gives the buyers more opportunity to negotiate.
41:39 Speaker 04 The market itself compared to, you know, if you would say five years ago, I mean, we have appreciated and we have held strong. So even though interest rates are higher than what they were, five or six years ago, home prices in general have stayed steady.
41:58 Speaker 02 Yeah, that's, that's kind of what I've been seeing too. The, it's so easy to get trapped, think, getting caught up with the interest rate and what you're paying in interest rates, because it's still on people's minds. Like five or six years ago, it was, you know, there were people at like 3%, you know, but below 3% even. And so now they're going, oh, it's 6%.
42:21 Speaker 03 Still historically a little bit below average.
42:23 Speaker 02 I know, and you don't marry your mortgage. You marry the, you marry the house, but you don't, you're dating the mortgage.
42:30 Speaker 03 I like that.
42:30 Speaker 02 You know, you can, you can refi, you know, give it, be in the house for a little while. After, after a few years, you're going to have a little bit of equity in there. It opens up your options. And then we also generally make more money as we get older. Right? So the more, the more years that you have in that house, you should be increasing your income.
42:50 Speaker 03 Should be, should be, should be paying off your debts.
42:53 Speaker 02 That's right.
42:53 Speaker 03 You should be lowering.
42:54 Speaker 02 Yeah, or getting rid of that student loan, or, you know, things, things improve over time. And so, you know, again, it's just one of the most important financial decisions that somebody can make, because it just, it just brings so much financial security.
43:10 Speaker 04 I want to piggyback off that for a minute. That made me think of a client that I had recently that they were looking to purchase a home. And right now, while they're working, they feel comfortable with where the mortgage payment was that I quoted them right now. But they said when they retire, which is supposed to be in the next, would she say about eight years from now? In eight years from now, I'm not sure that that mortgage payment will be comfortable for me. And so we talked about that a little more and they were saying how they're going to start taking, you know, disbursements. They can pull a little money out to put down, but not until they reach a certain age. So right now they wouldn't be able to pull that money to make that lower mortgage payment.
43:55 Speaker 04 And something that I was able to educate them on is there's something on a home loan called a recast. Have you guys heard of that?
44:01 Speaker 03 No.
44:02 Speaker 04 So let's use this buyer as an example. They're buying a home now that they can afford because they're working. But then let's say they retire eight years from now and they're able to, you know, now pull out a little bit of money. I think the minimum on a recast is $10,000. You can call your servicer, the person you're making your mortgage payment to, and you can tell them, I'd like to make a principal payment. And I would like you to recast the loan, which means it's going to re-amortize that payment according to the new lower balance of the loan. And so what that does is it allows them to buy the house now, afford and pay as much as you can to get that paid down. And then when you're ready to retire, we can recast that loan.
44:45 Speaker 04 And, and what that is too, is it's a fee that's associated with it. I want to say the fee is anywhere, it depends on the servicer, between, you know, $200 and $400 to do a recast. This is not a full refinance.
44:58 Speaker 03 So it's just resetting, so if they've paid down so much and the, the principal and interest is doing this, right? It just resets that to lower their.
45:06 Speaker 04 Monthly payment.
45:07 Speaker 03 Got it.
45:08 Speaker 02 Right.
45:08 Speaker 04 So that's great for somebody that's in the, the stress factor of knowing what's coming in their near future and being able to know whether they can afford it.
45:16 Speaker 02 Interesting. Very nice. Got another message here for you, question for you, Ashley. It says, are there regulatory changes on the horizon that could make hard money loans more consumer friendly? And what is the guest's business name again?
45:33 Speaker 04 So my business name is Esteem Lending Group. And with hard money, we're talking about, the question again was, how do we make it?
45:44 Speaker 02 Any regulatory changes to make it more consumer friendly? And I, this is a good, you know, it seems like hard money loans to me always kind of seem like something that's just kind of like out there. It almost seems like it's for wealthy people.
45:56 Speaker 03 Just for the wealthy.
45:57 Speaker 02 Yeah, yeah, but is there any, like, what are the, what are the, how is it regulated? And is there anything that's changing in how those loans are done?
46:08 Speaker 04 So we, yes, hard money is regulated. They are not regulated the same as a bank would be, but we still, I say we, hard money still has to comply. So when we talk about QM loans, the conventional, you know, qualified mortgage loans, for example, if someone is using a hard money loan to purchase a primary residence, a home they're going to live in, you now are required to provide financials. You have to show that you income qualify for the loan. So it runs very similar to, you know, a regular conventional loan in that aspect.
46:49 Speaker 04 So there, they are regulated and they do have guidelines when we're talking about consumer loans. If you look at a hard money loan on an investment standpoint, that's where you have less restriction and you don't have to provide those documents.
47:05 Speaker 02 Right.
47:05 Speaker 03 The risk is more shifted to the investors putting the money in, right?
47:09 Speaker 04 Correct, yes, and you're typically getting rental income to offset some of that.
47:13 Speaker 02 What's the, what's the average rate of a hard money loan these days, roughly?
47:18 Speaker 04 I would say, you know, hard money is anywhere between, I'll give you a bigger range, 10 and 12%.
47:25 Speaker 02 Okay, yeah, yeah, so I mean, it's definitely more than a conventional loan or FHA loan, but it's not, it's not like a credit card loan or payday loan.
47:36 Speaker 03 The person flipping the house and they've done it before and they know they're going to get X amount of return, that's reasonable.
47:42 Speaker 02 Are you seeing any increase in, in flips and home investment, like?
47:49 Speaker 02 Flip flipping properties.
47:50 Speaker 04 Properties, you know, I have to say yes. Even in last year in 2025, a lot of my loans were, you know, hard money, but also the DSCR loans, which are debt service ratio. Meaning you're going to get a better interest rate than you went on hard money. But what we're using to qualify you for the loan is the rental income on the property. So you don't have to show the tax returns, the pay stubs, none of that. It's a great loan for investors and I did see an increase in that as well as into 2026. I would say that is still going. Yeah.
48:27 Speaker 02 Yeah, it seems like we've had a really stable market, the real estate market since the recovery from the great recession, right? It's been pretty, just kind of chugging along. Yeah. Well, Ashley, good job. Thanks so much. Thanks for coming on the show.
48:45 Speaker 03 Say hi to your husband for me, too.
48:46 Speaker 02 Yeah.
48:47 Speaker 03 Old Dustin.
48:48 Speaker 02 Say hi to Dustin for us.
48:49 Speaker 04 Thank you for having me.
48:50 Speaker 02 Oh, great job. That's Ashley Weaver. She is a mortgage broker and owner of Esteem Lending Group. You can find out more about her and about her company by just Google Esteem Lending Group here in Bakersfield. We want to thank all of our listeners for tuning in today. We want to remind you that if you've missed this program or any of our past programs and would like to hear them, go ahead and subscribe to the Money Wise Podcast. It's commercial free and it's on all major podcast platforms like iTunes, Apple Podcasts or Spotify. Remember these three things, be smart, be safe and always be money wise.
49:31 Speaker 01 Securities offered through LPL Financial, member FINRA, SIPC. Investment advisory services offered through LPL Financial. LPL Financial and Money Wise Wealth Management are independently owned and operated.
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