How to get started when living in luxury/niche market?

[Mike Timme]

I am just getting started and would love some advice or success stories from people whe live in a unique market like I do. I live in Aspen, CO. Prices range from $2000+ psf in the city core to $300-$400 psf down valley about 45 minutes away. Foreclosures seem to be non-existent and a robust affordable housing program seems to have eliminated the middle class market. It is also a small market, even when you consider the entire valley, and is comprised of a mix of full-time residents, second home owners, rental investors and unoccupied homes owned by the uber-wealthy. Free market rental rates are high (think NYC and SanFran) and certainly bounce around from luxury to upper-middle-class working folk prices. When I try to run the numbers on any investment they just don't seem to add up for normal investing. For instance, buying a cheaper 3bd 1bth home/condo in Aspen may cost $1.5M. This price is low end, so assume a low end rent of $4,500 per month. Unless you make a huge down payment, your rent isn't covering your mortgage, and if you make a huge down payment your cash on cash return is garbage. If you try to do a fix and flip instead of buy and hold the options are extremely limited and there is so much money here you are not going to get a great deal on the buy side.  I love living here and know the market, but I'm wondering if I need to explore a different or larger market to get started. Thoughts?....