How the Real Estate Market Will Change in 2016
source: http://www.inc.com/aj-agrawal/how-real-estate-will-change-in-2016.html

The only constant is change. That's just as true of the real estate market as it is of anything else. As a result, you can expect to see some changes in the industry in 2016.   
Here's how real estate will change this year.             
           
1. High Rents Will Go Higher         
A character known only as "Brandon S." made news recently when he decided to set up his permanent residence on the parking lot of his employer. In this case, his employer is none other than the search engine giant Google.                    
Why did Brandon decide to live in a truck in a parking lot instead of buying or renting a house in the Bay Area? Because, as a famous ex-politician once put it, the rent was too damn high.  
"For all the money I'm spending on this apartment, I'm hardly ever there!" Brandon wrote on his blog. "I wake up, catch the first GBus to Google, work out, eat breakfast, work, eat lunch, work, eat dinner, hang out at Google, and eventually take a bus home, pack my gym bag for the next day, and go to sleep."     
Although property prices in San Francisco aren't reflective of the rest of the country (the median price for a home in San Francisco as of last year was $1.36 million, compared with a median price of $223,000 for a home in the entire U.S.), it's still true that people are getting squeezed in rent.
That's not going to change. Expect rents to go even higher in 2016. That doesn't necessarily bode well for residential real estate investors. If people find that it's more affordable to buy than rent, they'll start shopping for homes quickly.                   
As noted at ThinkConveyancing: "We're seeing more renters buy houses than we've ever seen. They're pricing out mortgages at low rates and realizing that they can save money and build equity by purchasing a home instead of renting an apartment."            

2. Mortgage Rates Will Go Higher 
As of this writing, the current rate on a 30-year fixed mortgage stands at 4.05 percent. By the end of 2016, expect that number to go higher.          
In 2015, we saw a great deal of volatility in mortgage rates. The average rate went up, but then it came back down again. You can expect those types of swings to continue.       
However, by December you should expect to see the average mortgage rate stand at 4.5 or 4.6 percent. Those higher rates will, of course, drive mortgage payments higher. That's going to put more of a squeeze on homeowners and also make it a little more challenging for people to build their net worth. It's also going to put a damper on sales of higher-priced homes. Look for luxury home sales to suffer a mild slump as homebuyers look for more affordable options because of higher rates.         

3. Millennials Will Drive Sales, But Not as Much as in 2015        
Millennials bought almost two million homes in 2015. They were the largest plurality of homebuyers at 32 percent. They were also by far the largest percentage of first-time homebuyers at 68 percent.                   
Expect that trend to continue this year as a housing industry hungry for sales develops homes for the Millennial market. Keep in mind also that college-educated Millennials, while not flush with cash, often enjoy a comfortable income. It's not uncommon for them to be able to afford mortgage payments on top of their college loan payments.                        
However, it's not likely that Millennials can keep pace with the staggering figures that they reported last year. While the market certainly offers opportunity for a younger generation, they're not going to dominate like they did in 2015.           

4. Gen-Xers Will Be There Too      
Gen-Xers are often in the "financially recovering" category. That is, they've made some mistakes with their money or struggled during the Great Recession. In 2016, look for them to emerge as viable homebuyers.        
In some cases, Gen-Xers will sell their primary residence to move to a better neighborhood. In other cases, they'll sell so they don't have to pay rent anymore (see point No. 1). In either case, they'll provide a boost to the real estate market that will certainly be appreciated.      

5. It's a Good Year to Sell    
Overall, expect real estate prices to jump 3 to 5 percent in 2016. That means it's going to be a very good year to sell.               
Supply is still tight, which is advantageous to the seller. The buyer doesn't have a lot of choices and may have to settle on paying a little more than originally planned just to get into a great place.

Wrapping It Up          
It's impossible to predict the future in any market. Although there certainly will be changes, the real estate market looks to stand strong in 2016.

The 10 Best U.S. Markets to Get Rich From Real Estate           
source:www.entrepreneur.com/article/251871

Real estate is funny. Historically, it's been one of the best ways to build wealth, yet it scares the pants off most people. Everyone has an uncle or cousin who "lost big" in one of the real-estate crashes, yet admit it: A part of you still wants to invest.         
The truth is, real estate can definitely be dangerous. However, with proper education, patience and a little bit of luck, big wealth can be made through real-estate investing. Oh, and one more thing helps: location.                    
Some areas naturally do better. That's why we at BiggerPockets.com recently put our heads down in data for months to develop an algorithm that looks at all the major markets in America in an attempt to determine what the best and worst locations have been recently for real-estate investors. We call this "The BiggerPockets Real Estate Investment Market Index."            
This index seeks to determine which of the 50 most populous U.S. metro markets were most likely to have provided strong returns for residential real-estate investors between early 2014 and early 2015. This index measures both appreciation and gross rents as a percentage of average purchase prices       .          
Within the dates studied by the index, let's look at the 10 biggest real estate winners.

1. Dallas

Dallas tops the list of real-estate markets over the period studied, exhibiting strong price appreciation, while remaining a market in which investors saw strong rents relative to property values. Investors in Dallas stood to earn an almost 20 percent unleveraged return for residential real-estate investments before expenses.   

2. Denver

Falling closely behind Dallas, Denver takes the number-two spot, driven largely by the strongest appreciation in home values of any major market studied over the period. Residential real-estate prices increased a staggering 13.4 percent year over year across the Denver metro region.

3. Miami

Miami is one of three Florida markets on the top ten list, boasting an impressive 18.6 percent year-over-year return for investors.

4. Houston

Houston is the most populous city in the top 10 list, with more than 2.2 million residents. Investors on average saw a gross return of 18.5 percent over the past year.

5. Atlanta

Investors in the Atlanta market saw a 16.4 percent return over the past year, led by almost even gains in cash flow and appreciation.

 6. Tampa, Fla. 
        
Tampa, Fla., probably best known for its football team, made the number-six spot on our index, led by strong cash flow. Like its neighbor Atlanta, investors in Tampa saw a 16.4 percent return. 

7. Detroit

Detroit has had an interesting real-estate past, and it's still possible to buy real estate for less than the cost of a used car. However, Detroit is also clearly climbing its way out of the pit, emerging as number seven on the list for overall return for investors, sporting a cool 16.2 percent return.       

8. Austin, Texas

Austin, perhaps best known for its hipsters, weirdness and SXSW festival, comes in at number eight due to the incredible rise in values across the Austin metro area. Both house flippers and home owners have had a great year in Austin, seeing their property values climb an average of nearly 9 percent in just a year. Combining cash flow with appreciation, investors saw a 15.6 percent return.

9. Las Vegas

Gambling and the weather are not the only things hot in Vegas these days, as investors are seeing huge gains in their properties' value, accompanied by strong cash flow due to relatively low house prices yet strong rental rates, leading to an overall return of 15.3 percent.

10. Orlando, Fla.

Rounding out the list is everyone's favorite cartoon-themed vacation destination spot: Orlando, Fla. Orlando investors saw an average overall return of 14.9 percent over the past year, due largely to Orlando's higher-than-average rental prices.

Methodology 

It will be obvious to any investor looking at this data to note that expenses are not included in this study. Expenses vary widely across the 50 metros studied and are impacted by factors such as taxes, insurance, weather/climate, cost of living, landlord friendly/unfriendly laws, contractor costs and other similar variables.     
Furthermore, even if accurate data on each of the many expenses listed were readily available to the public, expenses can also vary from investor to investor based on non-market forces such as diligence in property management, variations in tenant-screening processes, experience with contractors and other experience-related advantages. Because of the complexity in creating any kind of index measuring expenses in the top 50 metro areas, expenses were excluded from this study entirely.

4 Simple Tips for Finding Incredible Real Estate Deals
Source: www.entrepreneur.com/article/272845

When I was a child, every Saturday morning was the same: Wake up early, pile into the minivan with my mom and three siblings and start looking for garage sales! Yes. I was raised by a "garage sale mom."

Because we didn't have a lot of money, we bought nearly all of our clothes, furniture, toys and pretty much everything else from someone who no longer wanted those items. And, let me tell you -- my mom was the master at those sales. She knew how to find the coolest gadgets, toys, games and appliances for pennies on the dollar. She could negotiate a 50-cent t-shirt down to 10 cents, and regularly did. She would even buy far more than we needed, just so she could resell those items at her own garage sales and make a profit to fund our family vacations.

Today, I do far less garage-sale shopping than my mom, but the lessons I learned from her haven't changed. I still want to find a great deal. Today, however, instead of 50-cent t-shirts, I spend much of my time hunting down great real estate deals, because I'm a real estate investor.

Whether I plan to flip that house, hold the property as a rental or go for something entirely different: Everything begins with a great deal. Here are four simple tips you too can use to find better deals on your own real estate, whether you're looking for an investment, a property for your business or simply a home for your family.

1. Consider buying a bank-foreclosed property.

When someone fails to pay a mortgage payment for an extended period of time, the lender will ultimately repossess the home and remove the occupants. Once the home is empty, the lender generally lists the house for sale on the market, using a local real estate to list it.

While the foreclosure, in itself, is of course sad (no one rejoices when someone loses a home), once the deed has been done, these properties can be some of the best deals you’ll find in real estate. Banks want to be in the business of lending money, not managing property, so they are often quick to offer large discounts just to get the deal off their books. Translation: You can get a great deal on foreclosed properties, if you know how to buy foreclosures right.

Because the foreclosure process can take several years, these properties are often in need of some serious repair or updating. So, further discounts may be given to compensate -- for buyers willing to brave a rehab.

Talk to a local real estate agent about the foreclosures in your area, and start checking some out. You might be surprised at the deals you can get.

2. Be the first . . . or the last.

In real estate, often the old adage holds true: The early bird gets the worm.

Oftentimes, it’s not the highest offer for a property that gets accepted, it’s simply the first. Therefore, if you are looking for a great deal, be quick about it! Get a pre-approval from a bank so you can jump at any property right away, and have your real estate agent set you up with automatic email alerts notifying you of any new property that hits the market.

Then, don’t delay -- check it out quickly, and make an offer the same day if possible.

Conversely, another way to find great deals is to look for properties that have been on the market for a long time. Those owners are often far more willing to sell for a discount, because they are tired of holding on to that property. Many times, they will have been making two mortgage payments for months (or years) and will entertain almost any offer.

3. Approach absentee owners privately.

In a hot real estate market, like the one most of the United States is experiencing today, great deals can be hard to find because of the large number of people looking for a home. In some areas, a single house for sale might get a dozen or more offers in the first several days.

Therefore, one of the best tactics real estate investors use today is to look outside your multiple listing service and instead contact owners directly, asking them to consider selling. At any given time, a good percentage of the population will entertain that option, so why not reach out before they list the home with a real estate agent?

One of the best kinds of people to target is absentee owners, which simply means someone who owns a property but doesn't live there. They might be landlords (who hate their tenants) or owners who inherited their houses and are simply unsure what to do with them. You can find these deals in a number of ways, such as:

-Driving around, looking for houses that look vacant, and using online public records to track down the owner

-Buying a public record list using an aggregate-list site like ListSource.com

-Calling mom-and-pop landlords who are listing properties “for rent” on Craigslist. Let them know you aren't interested in renting, but you would like to talk to them about buying.

4. Look at a lot of deals.

Finally, understand that finding good deals is largely a “numbers game.” You often have to kiss a lot of frogs to find the prince!

For me, I look at deals in terms of a funnel. At its top, numerous leads come in, but at the bottom, only a few come out. Therefore, if I want more deals at the bottom, I need to improve each aspect of my funnel, including the quality and number of leads at the top. For example, my funnel might look like the following:

Raw leads from my real estate agent – 200
The location is somewhere I would buy – 100
A quick analysis shows promise – 20
A deeper analysis still shows promise – 10
Deals I've made an offer on – 8
Offers I've made that have been accepted - 1

Notice that, in the above funnel, my agent sent me 200 possible properties, but at the end, I ended up making offers on only eight and only one offer was accepted. If I wanted to buy two properties, I know I'd need to look back on my funnel and find a way to increase my numbers. Because, again, it’s just a numbers game.

Whether you are looking to buy an investment property, purchase a home for yourself or buy real estate for another reason, remember: You make your money when you buy. If you want to have immediate equity in your property, which can help you build wealth in the future, or save you in case of an economic turndown, you must find great real estate deals. 

So, don’t settle for paying market-price for a house. Instead, follow the four tips here to get a deal so good even a "garage-sale mom" would be proud!