All Forum Posts by: John Romero

Give Chris Granger with Maison Title a call, I think he can help: 337.662.3902

Leadville is one of the last mountain towns to get expensive. Historically it is a mining town (the Climax molybdenum (steel hardener) mine is still active there and is still the biggest employer, although they just announced they're reducing operations by 50%). Contrary to Denver, the economy has been bad in Leadville for a long time, and the population is decreasing not growing like Denver. Leadville is a cool historical town (Doc Holliday lived there for a while) which also means it has an aged housing stock with poor quality construction (miner's cabins built 140 years ago). It's just starting to catch up to other mountain towns now as weekend warriors who are priced out of the more expensive mountain towns have recently started building and buying places there. However Leadville is too far from the quality ski resorts, too far from Denver, too high elevation (at 10,152 feet it's too high for weekenders from Denver to adjust to in a weekend, which is actually a big deal and causes many people to sell when they realize it), too cold, and too windy to ever become as expensive as the more desirable mountain towns like Vail and those of Summit County. I can see prices going up there over time because it does have access to some amazing natural areas and it's still affordable compared to most other places in CO. There has been an uptick in outdoor recreation-based tourism there over the past few years (many of Colorado's 14ers are nearby), but the economy is still largely dependent on the Climax mine, which is dependent on the global demand for steel so it experiences large boom and bust cycles. Very different market than Denver. If you're looking for somewhere that's actually directly tied to the strong fundamentals of the Denver market you're going to want to look down on the Front Range closer to Denver. There are towns along the I-25 corridor that are still affordable, commutable to the Denver job market, and may be more in line with what you're looking for. Happy to chat CO real estate any time! 

I have been reading a ton of material (including Bigger Pockets books!) on real estate investing to educate myself before purchasing my first property.

I've been scanning the MLS and been in contact with my agent for the past two months looking for a small multifamily or single family home to house hack.

Based on my local market, it's looking like a single family home will be the most realistic first purchase.

My strategy is to put down about 10% (or lower) using a conventional or FHA loan, make value-add minor rehabs to the property where needed while living in the property (live-in-flip), and then move into a different property and place a tenant in the first (and repeat over several years to acquire multiple properties).

I know there are creative methods to finance real estate deals rather than using your own cash. However, for at least my first couple of deals, I want to use my own cash to learn the process from the inside-out (and pursue other financing methods later on).

To increase my cash savings rate in the short term to cover my future down payment(s) and rehab cost, I've considered lowering my 401(k) contribution to an amount that would meet my company's match but no more. This would provide me the capital necessary to fund my real estate business and get it off the ground and also provide a conservative reserve for unknown expenses.

Effectively, I'd be making the decision that I can actively manage my real estate portfolio in a way that will generate a return better than the stock market (index funds via 401(k)).

I've been a passive index fund investor for years and the thought of decreasing my retirement account contribution is painful. However, long-term real estate investing makes sense to me and I can see the value in actively working the business as an investor over a 20+ year period.

I can always increase my 401(k) contribution back to its original rate in the future once I feel solidified with my real estate portfolio foundation.

Has anyone else taken a similar approach when starting their real estate investment journey? Thoughts on deferring traditional retirement account capital to utilize it in the real estate market long-term?

Thank you all so much for being willing to share your expertise. I love BiggerPockets!

@John Romero, where is this deal located (what state)?

Also, have you ever considered just buying a multifamily property, with homes already set up?

@John Romero the key to any business , which a short term vacation rental is, is profits or cash flow not appreciation. Cash flow can be guaranteed with STVRs leased to a property manager.

@John Romero  - I'm curious what you ended up doing with your SDIRA? I've personally just invested my SDIRA and Solo 401K into various syndications.  For the syndications that I personally sponsor as a GP, we have a large percentage of our investors that also use their qualified retirement plans for investing passively. 

You can most certainly purchase an STR with your SDIRA as well. Here's a good site with info: https://www.trustetc.com/blog/... --- The obvious caught as listed above is avoiding any personal gain with the asset.  I'm sure you can work it though! 

It's also true that STR management fees can be brutal, and self management may be questionable if you're using your SDIRA to acquire the property.... plenty of variables at play! lol

Best of luck, my friend!

if you decide to look in Pensacola Myself and caleb drake are amazing agents here