I hear all the time that to invest in real estate you have to know your market. I understand that means knowing property values, vacancy rates as well as many other variables. What steps do you guys take to learn if a market is suitable for REI? I ask because as I’m working up the money and courage to buy a multifamily, I struggle to understand my market. I don’t know if I will have a 5% vacancy rate or 50%. I don’t know if I’m buying a good deal because properties vary so much in my town.

@Josh Thompson As for price, you need to look at a lot of houses.  At least pictures, and see as many as you can in person.  Then look at what houses have sold for.  You can see this on Zillow, but it is not always accurate.  Also, you don't know what selling concessions were made, whether it was cash or whatever.  But still it can give you a pretty good idea.

Pick some properties to "follow."  Open houses are great for this because you can go in and inspect for yourself.  See what they list for, how many days they stay on the market,  any price changes, and what they sell for.

Also, network with as many investors as you can.

For rentals, you can check craigslist and Zillow for listings.  See what other properties are asking / getting.  Here it is probably even more important to talk to other investors.  Call on rental ads and ask the owner some questions.

Do enough of all this and you'll start to develop a feel, not too dissimilar to the feel you get playing sports.  Muscle smarts.  It won't be perfect.  But you'll be better than most who don't "practice."  Like a batter you want to wait for your pitch, but eventually you'll have to swing. 

There are a couple good ways to learn your market. I would start by trying to network with other local investors in your area, see what investing strategies are commonly working there. In the same vein, I would find a local realtor that can put you on a daily MLS update for listings in the towns that you are interested in. By searching through these listings, you can get a very good idea of what properties are selling for in your area. If properties are very expensive in your town, it may not make sense to buy-and-hold there. You can then switch your focus to a neighboring town where the prices might be more conducive to your particular strategy (buy-and-hold, flips, etc...).

@Josh Thompson read this blogpost by Brandon Hall (he was on today’s podcast):

https://www.biggerpockets.com/renewsblog/2015/05/10/invest-out-of-state-how-to-analyze-a-city/

You can look up a city’s Comprehensive Annual Financial Report (CAFR) just by googling it. The blog post tells you what to specifically look for in the CAFR. This helps you to get a solid picture on who the big employers are, population growth, unemployment, the areas where the city will be investing etc