Ken Answers Inner Circle Mail

One of the best things about Ken’s Inner Circle is being able to ask Ken your questions about real estate. Ken answers these questions every Monday during his YouTube live. Moving forward, we’ll also include Ken’s responses here. Do you have a question for Ken? If so, you can ask here.

I have an investment property free and clear in Mississippi. I want to get a HELOC (home equity line of credit) on it. Do you know any resource to obtain a HELOC on an investment property? – Mario

Ken’s response:

I don’t in Mississippi, but I know there are plenty of resources out there. I wouldn’t go too high on the HELOC so you can keep some equity in your property. I’d also make sure that you’re able to . While most banks in Arizona, for example, don’t offer HELOCs on investment properties, National Bank of Arizona actually does and it’s worth looking into whether they’ll work with a property in Mississippi. Call all of the little banks around you and you may be able to find a bank that does offer HELOCs on an investment property.

Hi Ken, I just listened to your podcast episode “which housing markets are hot!” are you name dropped a few markets you are not in. One of those markets was Nebraska which is where I live. I am new to real estate and currently do not own any properties. Why do you recommend Nebraska and what do you suggest I do as I live here and am also new to this industry? Thanks! – Matthew

Ken’s response:

I’ve been to Nebraska, and some parts of the state are booming. While it isn’t my leading choice for areas to invest in, there are certain emerging cities, like Lincoln and Omaha, where salaries are growing and home prices are rising. The employment snapshot is always a critical piece I consider when weighing where to invest. Also, for investors who don’t have a lot of capital, properties in Nebraska are more attainable.

If I want to look at my unit, can I just let the tenant know and walk through? Is that weird? – Tara

Ken’s response:

To be blunt, yes. But it’s not weird that you want to. This is actually addressed in landlord-tenant law, which states that a landlord needs to give a certain amount of notice before entering. In most states, it’s 48 hours. There are legitimate reasons to visit a property – if you suspect someone else is living there who’s not on the lease, if they bought a pet without notifying you, etc. But if you’re just dropping in for the sake of curiosity, I would take a look at why you’re doing that. If you’re just doing this because you’re a new landlord and you’re anxious about what they’re doing with the property, I urge you to avoid the impulse to drop by because you’re probably going to just weird out the tenant.

If you were a first-time home buyer in Arizona, would you wait out the current market before going forward and buying a house? – Omar

Ken’s response:

Home markets are tough right now. Having said that, these home values aren’t likely to go down. Instead, they’ll slow down at the rate they appreciate. If you’re looking for a home you plan on living in for a long time, you should get in now because I don’t see prices regressing. If you only plan on owning for a few years, I wouldn’t buy a place. But if you’re planning on living in Arizona for the long haul, I wouldn’t wait.

I watched your video, “Here’s what happens as interest rates rise…The IMPACT on homebuilders, homeowners, and renters.” It was great content. How would multifamily be affected by all this? Will the cap rates increase? Is it still a good time to invest in multifamily? – S.T.

Ken’s response:

We always need to look at cap rates. For those of you who don’t know, a cap rate (short for “capitalization rate”), is the ratio between the annual rental income to its current market value. For example, if a property has a net operating income of $100,000 for the year, and the property is worth one million dollars, then the cap rate is 10%. That’s just an example of course. Right now, due to inflation and other factors, we’re looking at properties with a cap rate of less than 4%. I do believe that cap rates will go up from where they are now. I still believe it’s a good time for multifamily, but you’ve got to be very careful. There’s still a massive need for multifamily housing and it’s still a good investment, but you have to buy correctly. Be very careful with interest rates and NOI.

(Note: some questions and responses have been edited for clarity.)


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