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 :
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.
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