James is a featured contributor to the 2025 Guide to Colorado Real Estate Investing Strategies book. In it he writes about Hybrid Investing, Alternative Asset investing, Partnership, Meetups, and Content.
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James Brown’s Colorado Real Estate Investing Strategy 2025
ABOUT ME
I caught the real estate investing bug when I realized the true power it had to transform my life. I also love infecting friends, family, and clients with the disease.
INTRODUCTION
I thought “Shiny Object Syndrome” would go away eventually when I first got started in real estate. I know a lot of people experience the same challenge because there are so many ways to make money in real estate. This book isn’t necessarily going to help this condition! My business partner Toby Hanson and I still struggle with it, but we also realize that markets are different, markets shift over time, and some seemingly different strategies can be complementary and powerful when combined. By combining strategies, you can protect yourself from downsides and take advantage of upsides. We understand there are risks in any kind of investing, and we can make tons of money quickly, but we, and other investors we partner with, say that it is paramount to focus on safety, security, and steady long-term growth. All investing has some level of risk, but we leave the high-risk stuff to others who have a stomach for that.
PARALLEL STRATEGIES
Investing is basically solving a problem and providing something of value in exchange for profit. We solve two main problems with CoLiving investing (helping renters) and Hybrid investing (helping buyers). I also mention alternative assets and other things we do below, so hang in there!
COLIVING INVESTING
CoLiving (rent-by-the-room) investing is providing affordable housing for the adult workforce. This is not to be confused with other group home models like student housing, sober-living (drug and alcohol recovery), assisted-living, halfway houses, re-entry from prison, or Section-8 homes. Imagine someone who makes $60k+/- per year and is barely scraping by. It may be a stretch to afford a $1,400/mo studio or $1,600/mo 1-bedroom apartment in Denver, plus the cost of owning and maintaining a vehicle, insurance, food, and clothing, and not having anything left for entertainment, let alone saving money to get ahead.
CoLiving isn’t a new model, but the way we do it is by taking it to another level of professionalism. I know many people that get started investing by buying a home and renting out the other rooms, also known these days as “house hacking”. It’s a great way to invest because if you live in the property, you can get a low-interest, low down payment FHA or VA loan and have roommates help cover the mortgage. If you rinse and repeat by buying another home and keep that original property as a rental you can build a portfolio and become financially free much sooner than most people if you start sooner than later. We call this “Nomad Investing” and I preach this model to every young, single person I meet that is smart enough to listen AND take action! It gives me a lot of pleasure helping people that see the light and want my help. I wish I had known about this strategy and did it when I was younger and more willing to live with roommates.
We take this model to another level in a few ways. First, we partner 50/50 with busy professionals and business owners who want to be passive by providing the funds while we handle finding the ideal properties, handling acquisitions, deal structuring, setup (adding extra bedrooms/baths, furnishings, kitchen utensils, cleaning supplies, security systems/cameras, keyless entry locks), finding and screening residents, move-ins/move-outs, payments/payouts, professional cleaning, maintenance, landscaping/snow removal and hosting. Acquisitions include identifying and converting existing long-term, short-term, and mid-term rentals that fit the model, or finding and buying properties that are currently available on market, or we market for off-market properties that we can buy creatively (subject-to the existing low interest rate or assumable loans). We also help people who want to house hack and get everything set up and running in with our professional systems.
HYBRID INVESTING
Hybrid (aka Rent-to-Own or Lease/Option) investing is helping people who want to buy a home and have gotten turned down by the banks for any number of reasons. Banks have strict guidelines, and a large portion of the population don’t check all the boxes. But many people have steady income and a chunk of money to pay upfront. That’s typically people who are self-employed and need a full two-years income and tax returns. Or they write off everything they can think of and don’t claim enough income, which is something I run into all the time. They just need to change their strategy to become bankable in a couple of years.
It’s a medium-term exit strategy. We get cash upfront from our resident-buyers. Then we get monthly cash flow from rent. And cash later when our residents get a bank loan to buy the home and cash us out. In the past, we exclusively focused on “buyer-first” where we find buyers who cannot get a traditional loan, and we buy homes for them. We still do that model because we get more cash upfront and do not have any risk of vacancy upfront. The problem is that we did not consistently find enough of those buyers so we added a proven property-first model because we can buy as many as we and our passive capital investors want. We can find more buyers since we require less down, but still enough for them to have skin in the game. What we like about it is we avoid doing risky remodels with high holding costs, dealing with contractors, or dealing with regular renters who do not have much skin in the game or the intention of becoming homeowners. We also reduce typical vacancy risk, capital expenses like maintenance and repairs, and paying for property management. Our returns are better than regular rentals too. Plus, we are helping deserving people become homeowners. There’s a lot more I could go into but those are some of the highlights.
ALTERNATIVE ASSET INVESTING
We love our Hybrid investing model but there are also other asset classes we like for different reasons. Diversifying within real estate is one reason. Another is because we, and our investor partners, need to have a full 20% down minimum and the ability to get bank financing for the rest when we buy single-family homes on-market, so that is a limitation. Of course, there are other ways to finance, like seller financing, buying subject-to existing loans, finding assumable loans, and DSCR loans. Sometimes, we just want to invest using the cash from our IRAs, home equity, or insurance policies for a straight return on debt without needing to qualify for a loan or put down $100k or more for a 20% down payment. So, we partner with experienced operators (GPs, aka General Partners) in real estate syndications. These operators are experts in buying, adding value, and operating specific asset classes like multifamily complexes (apartments) and have a track record in that space. Other syndication asset classes we like are self-storage, mobile home parks, and RV parks. All of the syndications we are involved in are outside Colorado (e.g. Florida, Kansas, Texas), but if the cash flow numbers work, of course, we’d like to have them here because we know that real wealth is built on long-term appreciation, which is historically strong in Colorado.
PARTNERSHIPS
We have formed partnerships in order to have “Family Office” level advisory support without having the full-time staff that is typically only available to ultra-wealthy families. As the saying goes “Your network is your net worth”.
Fund Managers: We are working with high-level fund managers who have a track record of getting double-digit returns with low treasury-level risk. They did even better during the last recession! I have a lot to learn about how they do it but that’s the beautiful thing about partnering with experts. We don’t have to know it all to be successful.
Trust Experts: We work with a team that has 40 years of experience setting up trust structures 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. We also like it because we never have to do a 1031 exchange again!
Infinite Banking Experts: Also known as “Bank on Yourself.” This is a tool that allows us to leverage the value of dividend-paying permanent life insurance policies. It’s a strategy that has become highly refined over the years to use specifically for real estate investing because the cash value is protected and liquid. We don’t have to wait for banks to approve loans or deal with underwriting. And the money in the account is always compounding.
SHOWS
2025 will be the second full year that I will host the “This Month in Real Estate Investing” show. I get to share and learn from a panel of three other experienced investors, where we talk about a wide variety of investing strategies, asset classes, and markets that appear in the news. I also Co-Host the Mr. Rent-to-Own Homes show with Domenic Danino where we dive into different topics related to, but not always, our rent-to-own investing strategies. I’ll also continue to be a guest on other shows where I primarily share my journey into our CoLiving and Hybrid investing models. A big part of investing is constantly learning, so hosting the shows and being a guest on other shows helps keep me on my toes.
MEETUPS
Starting in 2023 we joined forces with the “Magnificent 7” (seven like-minded real estate experts) to run the Colorado Cashflow Club. It’s a monthly, in-person mastermind where we and our guest speakers share different investing strategies, eat free tacos, share haves and wants, and network with other weirdos like us who don’t mind giving up a night of binge-watching Netflix to build wealth. We emphasize getting to know each other to build real, solid relationships since investing is a team sport and trust in our partners is key.
CONTENT
I am gearing up to create and post more video content, sharing my knowledge with anyone who wants to join me on this exciting journey.
