Buyers: Cardinal rule # 1 be patient before you buy

Let the market do its work.

Last week, I had coffee with an investor and a good friend.  He bought five investment properties in 2007 and early 2008. He told me how if he just waited, he could've gotten better homes this year.

Back in mid-2007 I showed him this graph:

Reno Homes Median Price April 2007 - April 2009 :

(click image to enlarge)

He planned on having the five homes rented out in hopes for a good return after five years.  I told him he was getting too early in the game.  The market was still going down.  I advised him to wait until the market gave us the go signal.

I don't enjoy writing a blog like this--it's never fun to see your friend and client lose tens of thousands of dollars.  But there is a great lesson to be learned here:

Listen to the market above all.

"What does that mean Joe?"

First, study if the market is going up or down.  Second, avoid thinking in terms like:  "the market is cheap, it can't go any lower." Third, it pays to be alert, interested and open-minded.