Another thing to consider is your ability to even get decent financing on investment properties as time goes on. I have been working in lending for six years and every week brings even tighter guidelines. For example, you cannot get a conventional or FHA loan on a new home purchase as a primary residence if you currently own a home that does not have equity. This is good in the long run because it at least slows down some of the "buy and bail" problems, but it makes it difficult for legitimate investors of course.

I definitely think it is a good time to start investing if you have the money. Try seeing what the current value of the home is compared to what he wants to sell it for. Obviously if he is selling it for below current market value it would be a good time to invest if you want to hold onto the property for a number of years.

You could also always rent it out while you wait for the economy to pick back up.