James is a featured contributor to the 2023 Guide to Colorado Real Estate Investing Strategies book. In it he writes about earned income strategies, stocks, revenue share, referrals, coaching, tax and asset protection strategies, infinite banking, networking strategies, shows, meetup groups, reverse lease options (aka Hybrid investing), private money lending, creative financing, fractional investing, and fund investing.
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James Brown Colorado Real Estate Investing Strategy 2023
About Me
James Brown uses his knowledge of real estate investing strategies to create an Instagram-worthy Colorado lifestyle and a prosperous future for himself, his friends and clients.
Earned Income Strategies
COMMISSIONS
Investing can be done without using any of your own money, but it can really limit what you can do. Having a good W2 job or other solid source of income does open up a lot more opportunities. A big part of my overall strategy includes exponentially increasing my earned income and ability to get bank financing so I can use the power of leverage. To do that I am dialing in multiple lead sources to earn commissions as a licensed Realtor by helping primary home buyers and sellers, in addition to helping investors in my areas of expertise.
STOCKS, REVENUE SHARE AND REFERRALS
My brokerage is unique in the multiple ways it pays us company stock and actually shares revenue, not just profit share, which is totally different. These two things mean that I don’t have to rely solely on the hamster wheel of commissions to sustain my lifestyle until my investments outpace my income. My business partner Toby Hanson and I also have a brilliant strategy for creating very profitable referral business that can also lead to other investing opportunities.
COACHING
I am starting to help coach other Reverse Lease Option students in an official capacity alongside my mentor Jesse Mills.
Tax and Asset Protection Strategies
TRUSTS
Earning income from investing is fantastic unless you are needlessly paying huge amounts of income and capital gains taxes. Or lose it due to frivolous lawsuits. Luckily my business partner Toby specializes in helping people set up trusts that are designed and proven to provide tax savings, tax deferment and asset protection. In the past only the ultra-wealthy typically knew about or could afford to set these up and properly use them. One of the biggest advantages is that we never have to do a 1031 exchange again if we want to sell and then buy other properties. As anyone that has done a 1031 knows it requires hiring a Qualified Intermediary (QI) and it puts you under a ticking clock to identify and get your next property under contract. It is costly and puts you at a serious disadvantage in finding your next property and negotiating if the seller finds out you are under the gun. Yes, you can do a Reverse 1031 for more money to solve that problem, but why bother? The trusts also simplify and save time and money in reporting compared to using multiple LLCs. We are in the process of setting up two types of trusts for our own investing company.
INFINITE BANKING
We are setting up “Infinite Banking” for ourselves and our clients. This is a tool that allows us to become the bank by leveraging the value of dividend-paying permanent life insurance policies. As investors we benefit from the cash value being protected and liquid while being accessible at an attractive interest rate. We don’t have to wait on banks to approve loans or deal with underwriting. And the money in the account is always compounding.
Networking Strategies
SHOWS
Investing is a team sport and as they say “Your Network is Your Net Worth”. It is important for me to get to know, like and trust other investors in order to do deals and learn from each other. One of the best ways to meet high level investors from all different backgrounds is through “This Month in Real Estate Investing” – the show that I host every month. Many of those guests have their own investing shows and ask me to come on as a guest where we can continue getting to know each other.
MEETUP GROUPS
I’m one of the original founders of Pace Morby’s “Subto” Colorado accountability group where we have weekly Zoom calls and monthly in-person meetups to network and analyze deals. It’s a great way to meet others in the creative financing space that are actively marketing and doing deals.
Other meetups around town are ICOR, IRROC, John Fisher’s Breakfast Club, Badass Real Estate Investing and I hear the House Hacking meetup is good too!
Investing Strategies
REVERSE LEASE OPTIONS
If you’ve read my entries in previous editions, you know I focus on Hybrid Investing, which we also refer to as Reverse Lease Options. We have mostly created these deals for other investors but this year I want to focus on becoming the investor myself on more deals.
PRIVATE MONEY LENDING
We have recently started helping other investors through private money lending and I want to do more of that. I’m also starting to work with contractors and investors to do flips. I’ll help with acquisitions, private money lending and using our unique selling system to get the highest possible price when we sell on the market.
CREATIVE FINANCING
We’ve taken a break from direct marketing for creative finance deals like Subject To and Seller Financing but my passion lies there so Toby and I will continue helping others analyze deals and look for opportunities to fund them.
FRACTIONAL INVESTING
We’ve talked about some of the different investing platforms like Fundrise, Roofstock and Arrived Homes on my show. I’m going to dabble with that a bit just for fun. You don’t have any real control or direct contact with the decision-makers like traditional active real estate investing but I like the idea more than buying stocks, Crypto or NFTs.
FUND INVESTING
We are building relationships with high net-worth investors and fund managers that will allow us to take this to a whole other level with the creation of a fund that gets double-digit returns with Treasury-level risk. It’s based on a proven model so we aren’t reinventing the wheel. The future is getting interesting!
