GI187: Real Estate as an Inflation Hedge with Patrick Grimes

GI187 Real Estate as an Inflation Hedge with Patrick Grimes

Patrick Grimes has 15 years of active real estate investing experience; purchasing distressed assets, renovating, and stabilizing for long term cashflow. His portfolio includes ownership in over 4,000 units across the South Eastern United States.

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Transcript:

Announcer:
Welcome to the Global Investor Podcast, a show that focuses on helping foreign investors enter the lucrative US real estate market. Host Charles Carillo combines decades of real estate investing experience with a professional background in international banking to interview experts in all areas of US real estate investing. Now, here’s your host, Charles Carillo.

Charles:
Do you have money sitting in the stock market? And you’re worried about it or worse. You have money sitting at the bank, not keeping up with inflation. My name is Charles Carillo, founder and managing partner of Harborside Partners. And since 2006, I’ve been investing my money and my family’s money into income producing properties. These are real assets, real properties with real addresses that produce real cash flow. At Harborside Partners, we provide passive investors who love real estate with a turnkey investing solution. If you want to put your money to work in real estate, but can’t find deals, don’t have the time to get funding in. The last thing that productive people want to do is manage real estate. We find the deals. We fund the deals and we manage the tenants, the termites and the properties. Partner with us at investwithharborside.com. That’s investwithharborside.com. Go to investwithharborside.com. If you love real estate, you like the idea of passive income and believe that income producing properties will appreciate over time. Go to investwithharborside.com. That’s investwithharborside.com.

Charles:
Welcome to another episode of the Global Investors Podcast; I’m your host Charles Carillo. Today we have Patrick Grimes. Patrick has 15 years of active real estate investing experience; purchasing distressed assets, renovating, and stabilizing for long term cashflow. His portfolio includes ownership in over 4,000 units across the South Eastern United States. So thank you so much for coming on the show today, Patrick.

Patrick:
I’m excited to be here. I just had a baby just a few days back, so I’m, I’m very committed and I’ve got my espresso in hand, so if I stutter a little bit, that’s the reason why

Charles:
Congratulations. That’s great to hear. So Patrick, give us a little background on yourself, both personally and professionally prior to starting your 15 year career in real estate investing.

Patrick:
Well, so I came from a machine design automation and robotics background. I did mechanical engineering, bachelor’s degree. And where everything went wrong was <laugh>. When I was doing very well, one of the owners of the automation company I was working for said, Hey, you need to get into real estate as soon as you can, as quick as you can. And I took the advice, invested big high per high returning deals, lost everything in 2008, nine, <laugh>, circled back around, got back into the swing of things in single family, ultimately traded up to multi-family. And we also invest in oil and gas. So I’m, I’m really about diversifying in alternative assets.

Charles:
Nice. Mm-hmm. <Affirmative>. So when you when you heard from your boss was there, what was the, what else was he telling you to make your decision to go into real estate and make that your investment vehicle? Was there what he like kind of his per his past performance in doing it, how it helped him or anything like that that made you make the decision?

Patrick:
Well, he was a little further along in life than I was, and he said that while he’s built a high tech company that has done well, which he did sell, and he still invests with me today. Nice. But that, he said, that’s a very volatile business. And while he can see me loving it, cuz you know, I have that inner inner engineering geek in me. And it’s very cognitively rewarding. It was very demanding and it wasn’t gonna create that, that future with financial freedom that I really would want for my future family. And he was right.

Charles:
So when you when you started, you said you were doing some very high risk things. What were you doing that led you to losing a lot of it or all of it? In, in 2008,

Patrick:
When I was doing it at the time, I didn’t realize it was high risk <laugh>. And once you lose it all, a lot more things become high risk as it is. Right. And so I was actually doing residential pre-development. I was, I was, I was invested into, into land with developed dirt and we were working towards building and it would’ve been incredible. And most development deals, they have a high returns, but the reality is you’re buying dirt and you’re hoping that’s something happens to that dirt and, and that bridge of time where you’re paying without cash flow and you’re hoping that something gets zoned and permitted and built and then, you know, you get something you can sell or rent, you’re hoping the market doesn’t crash during that whole time <laugh>. And so I was not one of the lucky ones. I was personally guaranteed on all of that and wrote it down pretty hard.

Charles:
Wow. Yeah, I was speaking to a lender about that about construction. They’re like, we, you know, we make sure that the borrowers can get all the way through the project cuz they’re like, if it stops, I mean, it could be anywhere in that process. There’s no, there’s, there’s no value. You know what I mean? Half-Built property, no matter what you have, you know, it’s, there’s no value in that. And it’s, it’s interesting how you have it compared to acquiring properties and how it’s a lot. I I feel it’s a lot less risky. You know, and the returns show that as well, like you were saying.

Patrick:
Yeah. Well, you know what, I, I was all about the hair, not the tortoise. Right. I was young and ambitious and <laugh>. I was like, let’s get, I mean, I did a ton of analysis and I did a ton of research, found exactly what I wanted to do. And then that all changed. And now my analysis is about recession resilience and it’s about diversification, non-correlated assets balance. And if you read my Passive Investor guide on my website, it shows all that it, it’s free download, invest on main street.com. And it maps out my, my mental picture of where you need to be to have, what is, what will give you freedom and that cash flow quadrant, that legacy wealth building.

Charles:
So your company focuses on energy portfolios, as you mentioned, and multi-family apartment complexes. Mm-Hmm. <affirmative>. So can you tell us kind of what your firm’s current real estate and investment let’s say criteria and strategy is currently?

Patrick:
Yeah, so I’m looking for, I do deals that will outlast another 2008. Really. That’s, that’s, and if you can’t, if it won’t outlast another, I’m not interested, I don’t think the deals should be done maybe by somebody else, but not me and my investors. So we’re looking for markets areas where they’ve shown past resilience in downturns or they bounce back. And typically that’s because they have certain employment and employers who are really paying you your ends through their employees. But you wanna make sure that those employers are, have built in resilience, their finance or logistics or healthcare and education, but a balance in all of those. And not just a mining town or an old school Detroit or one that’s heavy in retail trade and, and like in Orlando or Las Vegas kind of thing. And so you wanna find that balance in the markets.

Patrick:
You wanna find places that are on the growth curve and expansion curve, which means people are moving there. And why is that? Well, typically because jobs are created, income is growing and the cost of living is low. And when you, and typically that’s because the laws are friendly, it’s legislative friendly, not just to the, the the residents, but to businesses. Both the employers in the area and the landlords. So are they attracting employers? Is it favorably taxed? And do they allow a landlord like me to collect rents to evict if I have to, and to they don’t have rent control and permit when I need to make improvements. Right? And so you kind of combine when it’s a win for the employers, it’s a win for the residents and it’s a win for the landlord. With a market that has resilience and is currently expanding and growing, that’s when you find a big win.

Charles:
So how does your company sourcing deals? And I mean, are you, are you doing this in-house or are you mainly partnering with with other operators to source deals?

Patrick:
So I started out in, out there traveling, meeting with brokers, underwriting different deals all the time. And so what I realized when I traded from single family to multi, it actually took me two and a half years to make that bridge. Cuz with a little bit of analysis paralysis, engineer guy here with a background that leads me to be ultra conservative, right? It’s like the perfect storm <laugh>. And so I walked away from a lot of stuff. Maybe it was that market, the wrong team, the wrong partners. But when I traded up to larger, I went from three bedroom, two bath to over 80 units, which is where they’re the criteria, commercial, onsite property management, and all these things that I’m looking for. I realized over time after trying to do it myself, like I was single family, I needed to partner up. And so then I did, I partnered up, I started bringing deals to partners, ones that had more le liquidity and net worth more favorable for lending than I did. Ones that had broker broker relationships and a track rate of closing. So piggybacking those for a while, it worked out very well. And now we’re at a private equity firm where we have lots of opportunities handed to us on a regular basis and we turn down if dozens, if not hundreds of them. <Laugh>, define the ones that really align.

Charles:
So what is the benefit to past investors to work with co-sponsors like yourself versus working directly with, with the operator?

Patrick:
So I, so I am an issuer and an operator so on all of my multifamily deals. So it to me, the, if they’re planning on doing the operating and doing it themselves and kind of being the active guy versus putting themselves in a passive position I have articles in Forbes Patrick Grimes, Forbes, and active versus passive, single Family versus Multi and Asset Protection. Those articles all address that. What I was experiencing in 2009 and 10, and then I replicated on a single family basis after that, is that every time I did a deal, I was subtracting from time with my family, friends and hobbies to do that. I was trying to be active, I was trying to do it all myself. I was trying to not trust in others and trying to do it all with my own money and control it.

Patrick:
And I was trying to be something I’m not. And that’s skillsets that I don’t have. I, I mean, acquiring deals, relationships that decades that source good deals, how to manage the properties or even manage a property manager, how to do construction, how to, how to do all the things necessary to do a single family home was like giving it the old college try. And I realized that if I, after a while that I was just trading more and more time away from my family, friends and hobbies, that if I just trusted and partnered with people that had decades of experience, that would put me in a safer deal where I didn’t have to sign on the property, I didn’t have to sign on loan, they did all that. And I was limited in liability and I had better tax advantages in better markets that weren’t near me and lower risk. And so I found that by doing that trade from active to passive, it was a huge win.

Charles:
So let’s talk about how you’re identifying properties and you’re saying you have kind of a criteria of what you’re looking at where it’s something that you’d want to do and or something that you would pass on and you said you, you’d pass on so many different deals. First off, how are you? These are very hot markets you’re talking about where you’re talking about the growth and you’re talking about landlord friendly states. I mean, it only leaves, you know, a small percentage, let’s say 10 per 10, 15, 20% of the United States, right? Where you’re gonna be actually investing into and with these properties, where are you finding deals in markets where most people are are first of all overpaying?

Patrick:
So that is the secret sauce, right? <Laugh>. And it comes down to back, back winding back a little bit that there are a lot of people clamoring for those deals that are in quote the right markets and the, you know, the booming. And we don’t really go for any of those ones that are publicly marketed. Typically it’s the fact that we’ve bought a property with a broker, sold it with that same broker, and then we’ve followed through one or two times. But until they’re like, Hey look, when a deal comes around and there’s somebody who wants to sell and he wants to do it quick and I don’t wanna mass market it, but I need to lock it up fast and I need somebody that even though it’s a little distressed and it needs some work that can make sure that they have a reputation for closing, I’m gonna give that pocket listing or that off market listing to these guys because I know not only if I give it to them, they’re gonna turn back around and give it to me when they sell and I’m gonna build a partner.

Patrick:
And that just puts food on their plate. I mean, if the broker fails to sell a property, they oftentimes get get fired cuz they guided the, the owner into the wrong person and didn’t make it happen. They need closers and they need people that’ll follow through. And if they don’t have to spend months going to market, getting a ton of offers and then trying to tell the owner not to go for the highest ri highest bid because they’re not gonna close and they can just hand it off in an off market pocket listing to us and we’ll do it quietly and quickly. It’s better when,

Charles:
Yeah, make sure that it can close because you’re gonna have a lot of sellers out there that that’s their number one thing. Maybe not the highest price, but I want to close it, I wanna sell it. We have other opportunities that we’re trying to get involved with. So mm-hmm. <Affirmative> makes perfect sense. Can you share some of those main standards criteria that you’re looking for? We talked a lot about markets that makes perfect sense what you’re looking at on that kind of like larger level. But what kind of getting down the deal specific level or things that you want to see in a deal before your team, let’s say goes to the next level of due diligence or actually pulls the trigger and purchases it?

Patrick:
So I can really answer this on the, the two sides, right? One is on multi-family and then one is on the diversified energy right side. On the multi-family side, we’re looking for properties that are below market rents. We’re looking for properties after we found the right market in the right neighborhood, we’re looking for properties which has, which have clear neighboring properties which have similar vintage and similar in age or age in size that we can say, Hey look, these, these have been renovated, they’re just as old, they look similar, but we haven’t been fixed up and we can fix it up. So we wanna see a clear path. That engineering analyst in me between, okay, same exact product, just one’s been polished, this one sells for more. And we wanna look at those rent bumps that we are achievable, already proven in the market, not kind of build something outta nothing like I was back in 2000 trying to do in six and seven.

Patrick:
Right? And then we wanna look at, okay, within those properties, the capital in we can put, does it justify the, the rent bump that we can achieve to meet current market rates? Right? we already know the tide’s rising in the area, we already know the market’s lifting, but we don’t wanna project that again cuz I wanna, I wanna work for my appreciation and not hope that the market’s gonna go up. And so if we can find a property that is like that, typically there’s a storyline. I could tell you, we could sit here all day and I could tell you stories about sellers. I mean this last one we have open in Atlanta. It was an operator that struggled during covid. He wasn’t, he wasn’t the, the properties that we succeeded in the best during covid were once we vertically managed because we could control it all the way to the door.

Patrick:
We could help them with the gover, government assistantship applications and control the whole process without a third party property manager. But this guy was self-managing, he struggled at it. He had a 14% of the residents bad debt, they call it 14% not paying, which at the best, I mean that means your cash flow drops. And if he didn’t get low enough leverage, which, which it put him in a tough spot, meaning that he couldn’t pay his bills or he could barely pay his bills, right? Then all of a sudden he, a building burned down and he had the insurance money, but he didn’t rebuild the building cuz he needed the money to keep the, keep the property afloat through this trying time. So, and so that means he obviously wasn’t renovating the interiors were outdated, property dropped significantly, six to 800 dollars per unit.

Patrick:
That’s like 30, 40% below market rates, right? 3,600 to 800 per unit below the nearby comparables. Similar in age, similar in amenities, just they were fixed up in his wasn’t. So we can, we got in there off market, locked it up immediately, mostly with our own capital actually. And then we backfilled it with our investors so we can move fast, lock in the biggest, the quickest, the lowest interest rate and the best price. And now we get to, we get to get in better residents, right? We get to use our criteria to get in our marketing, get better residents, better management, take care of those residents. We make cleaner, safer and improved living experience. So they’re happy to pay the rents to us by fixing up the pool and the amenities that he let that closed down and let die and rebuilding the ice or of a building that’s a blank pad. And not only we’re gonna rebuild eight units, which were there pre zone, we’re gonna do 16, right? And then we get to renovate all the other units over, over a couple year period. So there’s aggregated things there that allow us to come in and just demonstrate to work hard, not just hope, but work hard to create incredible value for our investors through making in a cleaner, safer and improved living experience for the residents. I I mean there’s also a story on the energy stuff as well.

Charles:
Well, that’s, that’s very interesting. Yeah. You’re really forced in that appreciation. One thing I love about when you’re, when you start talking about what you’re looking for, and I, I’ve asked this question a number of times, but when you’re talking about comps, and that’s such a big thing and I never hear that before. And I love that because I turned down a deal with partners for our firm like two years ago because the only comps we get was like a mile and a half away. Mm-Hmm. And it was a beautiful property, you know what I mean? But it’s like, you know, all this kinda stuff is great, but you, there was no, there wasn’t any accurate comps. Like a, you know, an accurate comp is not a mile and a half away. It’s just not. So for you, that’s great that you’re not just looking at that property, you’re looking at similar vintage.

Charles:
Cause I was wondering where you’re going with that. And then I go, oh, you know, if we’re doing your comps for your rent, because that makes it the safest. Cuz if across the street that’s built two years before or two years after and they’ve done all this and they’ve got this rent, you know, it’s pretty safe, they’re gonna be getting that rent too. So it’s, it’s that’s great. That’s, that’s a really great way of going through the whole thing. What, what are some ways would you say that you mitigate risk when you’re investing in? Or what are the best ways, let’s say, to mitigate risk when investing into multi-family?

Patrick:
Well, so that’s a good point and maybe the best it’s a good, great topic and maybe the best way to explain it is to talk about all the reasons people become distressed, you know? Mm-Hmm. <Affirmative> if we stack already the better market property that we know has proven comparables and we know we can renovate it and our budget to meet those proven comparables to meet today’s rinse and not hope you stack all that up, well then you have to take in environmental factors, right? So it has to do with the how, it’s how the financially modeling is put together for the property. And I say if you we’re digging down deep, right? We’re talking market, we’re talking about property now what, what is the foundation of the deal? And really this is a finance question, right? How is it underwritten or analyzed?

Patrick:
What are all the assumptions? And so you wanna look at people, deals that we’ve found that have faltered or people that in that didn’t cap or fix their interest rates, right? Right. Now the cash flow’s gone and they’re distressed. They need to sell right away. Investors are upset. They, they promised cash flow and appreciation and they can’t, maybe they, they didn’t know how to manage. So we put in, we put in very conservative, we call ’em breakeven occupancies, right? Mm-Hmm. <affirmative>, we put enough debt down, enough down payment so that our abil we can tolerate a significant amount of vacancy in still cash flow. And that’s oftentimes in that 60 to 70% occupancy and we’re fine, we can ride out a downturn, right? That means you have to put enough capital as a down payment that might lower your investor returns. You wanna higher returns.

Patrick:
You’re probably not a good investor for me cuz I went through 2009 and 10 and I know what happened to those deals <laugh>. So, and then that occupancy that, like I said, only makes sense that breakeven occupancy, if you’ve capture interest rate or gotten a fixed interest rates, you gotta, but then look what happened to that guy as well. Not only did he mismanagement and, and people stop paying rent, but and he, he, and it, maybe he didn’t fix his interest, right? But he also had a natural, not only a financial disaster, but a natural disaster, right? We’ve had, it’s, so we gotta protect ourselves to not be the distressed operators of tomorrow really by two ways. We have to build into the cost structure reserves. And so we’ll put six months worth in reserves. What does that mean? That means we’re raising an extra million or two or 3 million, we’re depending on the size of the deal and we’re just socking it away into an account.

Patrick:
And you’re Charles like, Hey, that’s inflation affected. That’s gonna lower my return. I I don’t want you to do that. I would rather risk it. Well again, don’t mess with me because I’m about capital preservation. We have enough capital sitting in a site account that if we got nothing for six months, no rich for six months, we could still float the property. Now that’s not gonna happen because rent, if we get to our breakeven occupancy, which would mean another 2008 would happen, the only way that would happen is we also get hit by a tornado, a flood, a fire, just like that other owner. But that means we still have the capital on the sidelines to start rebuilding right away. Not only start rebuilding right away, but float the property if we need through the temporary dip. And the next part of that is have sufficient insurance policies because they don’t pay up upfront.

Patrick:
We gotta have that capital up front and the insurance policies will give us, will replace the rents we would’ve gotten on that building and it’ll give us replacement costs on that building. But not, not right away <laugh> it takes time for them to commit, but in order to not be the distressed operators, you gotta have those capital reserves. So I think those are kind of the major key points and the differences behind people that have been through a downturn and seen disasters and seen things happen and that are giving lower risk returns that they can stand by.

Charles:
Yeah, that’s great. Yeah, the reserves, there’s, there’s tons of operators out there that I don’t think take enough have enough reserves and it’s really like a big question when I’m passively investing. And then when working with our group, it’s, it’s usually pretty set that we have six months of reserves like you do. But it’s yeah, it’s, it’s amazing. Most people don’t do it cause they’re just trying to claw through to, to acquire the property and they don’t think that there’ll ever be a pull down or that the break even will ever be a, be an issue. But it does happen. So it’s, it’s great that you’re able to protect your investors like that. Patrick, one thing you mentioned a few minutes back was you’re talking about vertically integrated meaning that you have you or your partners have their own property management company that is managing a property itself, right? You don’t have a third party management company. And what I’ve found in sometimes in, I have partners that do this and I have some that we still use third party management, but what I’ve found sometimes is that yes, it provides more control, but sometimes the savings are kind of negligible and sometimes minimal, if any. So my question is, is having more control most important when you’re getting into a deal like that, even if it costs slightly more, let’s say?

Patrick:
That’s a really good question. And actually prior to Covid, I was more a believer in third party management because I thought, well they have hundreds of thousands of units. They have a, they have a, a flow of maintenance tax and leasing agents. They, they have, we have a lot to learn from these guys. This is their business. Us as a private equity firm, that’s not our business. We’re in the business of putting together deals, we’re entrepreneurs, we’re we’re there. But, but the day-to-day operations, that is not our business. I mean, we’ll asset manage, but constantly now it takes two different people to do those jobs. And, and if you kind of go back to my automation engineering career where I don’t do any, I stopped a while back, but, but there were some people when I was working at the Toyota plant that focused on one little piece of the windshield molding for 15 years and they fine tuned the perfection of this from 90 to 98 to 99 to 99.9.

Patrick:
And then there was some people in the design box which we’re inventing and creating the next vehicle of the following year. Now for a, for a private equity firm to do both create the deal and do property management, you need to have both of those pro you need to both those guys, you have a project guy which can create and launch a program and you, you need to have the process guy right now provided it can be done well. And you can find that e people that can run this other vertical in your organization. I think you can be successful at it. But the problem is these, these project guys trying to pretend like they’re also process guys, right? Mm-Hmm. <affirmative> and that’s when things can fault. Now, when I hear bad things about internal management, that’s typically what I see as happening. Now on the other side of it, it is not cheaper for a private equity firm cuz we don’t have the scale that a lot of these other large property management firms do.

Patrick:
And so, and it takes time. So it may slow down your private equity firm cuz it’s completely different behemoth with hundreds and hundreds of employees where you’re a little more light and agile on the private equity side. So it’s not cheaper at all and it, but to, what I believe it provides, if you have all these other check boxes and you have the right people is the ability for one to have a better resident experience. Because those, you can hang on to your people because they have loyalty to you you can pay them better cuz you don’t have the middle man between the two and they’re not a commodity anymore. They’re part of a larger company and you have alignment of interests, right? I mean when a cleaner, safer and improved living experience. Now what does that mean? That means when we go through a downturn, they’re still talking to us and as we go through a downturn, they answer our calls because we’re actively improving the property and we’re looking out for them and they know that we’re not just churning through people and they’re not a commo.

Patrick:
So the downside protection for the investor is the passive investor is, is much better if you have somebody that can do property management and do it right, because we could control all the way to the door. We weren’t relying on some other person that’s going through their own problems during a financial crisis to help us out amongst hundreds of other clients they have, right? So I think the downside is there. And so the responsibility from a recession resilience perspective is for a private equity firm to get good at that. Or like you said, bring on partners that have already feet on the ground, regional and area positions in place a feeder for the right people and knowledge of the area and then you can provide a, a lower risk return for your investors.

Charles:
That’s great. That’s a, that’s a great answer there. What are some common mistakes that you see real estate investors make, Patrick?

Patrick:
Well, so if you read my articles in Forbes, it’s gonna be all about trying, not trying to manage it all and do it all yourself. I it, yeah. The, I went through the single family thing, I went through development, then I went single family thing. And if you’re a high income earner and you’re out there great at doing something, then the faster you learn to be able to partner and let others experts work your investment portfolio in private equity instead of trying to keep that small control and the, the faster you’re gonna scale. And so I would say the, the, the earlier you learned to partner and how to choose the right partners and trust and verify and, and that kind of thing, that the, the better off you’ll be if you’re already to that point where you’re investing in some of these alternative assets like multi-family and energy.

Patrick:
If you’re still stuck in, maybe I have a 401k, maybe I’ve graduated to an IRA and or maybe I’m kind of big now and I’ve got a financial planner and I’m trading on stocks, right? Well all of those are correlated assets and one vertical and you’re gonna be working until you die and you’re gonna dwindle those accounts down through retirement until you pass. And by investing in the real estate, you’re in a whole nother vertical which has a different, has more security. But in 2008 we lost everything, right? I lost and everybody did. I mean it was terrible. Yeah. One vertical doesn’t mean diversification. You’re in a, inflation has asset. If you’re in low risk assets like the ones I’m structuring, you’re in reasonably returning capital preserved ones. But I suggest get into more non-correlated investments and that is energy for example, because that completely untied interest rates, debt free, diversified portfolio, many states, oil and gas, even better tax advantages. Oh yeah. My recommendation is to grow that comfortability even though you know less and less, but you will know less and less about those assets cuz they’re not correlated to each other. But on the other side, you’re gonna sleep better because while one’s down the other’s up,

Charles:
Right? Yeah. And it’s not, these aren’t assets that you’re typically gonna find through your financial advisor because they can’t get paid on it. So it’s a different thing that you also have to, interesting how that works. Right. <laugh>. So Patrick, over 15 years of investing in real estate through some lows and now through some highs and with the W two n job before all this kind of stuff, how has your relationship towards money changed over the years?

Patrick:
Well, so at this point, when we reached a 500 million portfolio in multi-family we, my wife and I were choosing to do what we do now and we have that choice. We actually moved to Hawaii during Covid and we have just had such a great time and for the first time the the flights back and forth to the mainland weren’t a huge bear. In fact, I was able to do the lay flat seats <laugh>. And so we’re able to make life decisions because we have freedom with our finances. That wasn’t easy to come across. But, and we see a lot of our passive investors making that happen too. They’re retiring earlier and they’re growing their, retire their retirement as they’re in their golden years. And so I think that relationship with money has given us that freedom. We just started a family, we got a baby on the way. I get to see the baby all day, every day, any in between, every meeting. And right after this podcast I’ll be able to take whenever I want to go in there and be involved in Emory’s life from the very beginning and through. And so that kind of value comes from the passive investments and the active investments we’ve made.

Charles:
Nice. And what do you think are the main factors that have contributed to yours success over the years?

Patrick:
Well, so I have a book on persistence and pivots <laugh> that, that where I tell my stories specifically about that. And I’m happy to give a free copy to your listeners at the end here if you’d like me to. Yeah. But yeah, my so I I to a fall, I mean I, I’m an an engineer kind of analyst kind of dude. I, I love getting in and figuring things out. And I’m very persistent and so you’ve known me for too long, you’d be like, are you still working on that? Took me two and a half years to trade from single family to multi because I had this analysis paralysis thing going on. And then, and then I realized, I was like, holy crap, this is so much better. And I 10 31 exchanged and I’ve got Forbes articles on that too. But yeah, I think that that persistence is definitely one of the traits. Also a daily routine. I run every morning fact around the lake here behind me with my puppy and we you know, i, I believe in that helps me center and listen to self-help podcast, all that kind of stuff every morning.

Charles:
Awesome Patrick. So how can our listeners learn more about you and your business and your book and you have a number of different resources on your website and also with all your article writing on Forbes?

Patrick:
Yeah, so I, yeah. I am on Forbes, Patrick Grimes Forbes. My company’s site is invest on main street.com, that’s invest on Main and then street all spelled out.com. And you’ll see we have a diversified energy portfolio upright now, great tax advantages off your ordinary income. We have multi-family available right at the top, either one of those next in fact first quarter of 2023, we’re launching a preferred equity fund with 12 and a half percent which pays currently 12 and a half immediately after investments. It’s cash flow a year where it’s gonna be really hard to provide cash flow. Love to see if any of those are interesting for you. I have a book it’s persistence Pivots and Game Changers Turning Challenges and Opportunities. I co-wrote it with some really cool guys. We got me with Hair, for example, Russell Gray with the real estate guys.

Patrick:
You got Phil Collins League, guitarist of Deb Leer, N F L N B A players. Just really fun project. We all tell our stories tell all kind of thing and no holds Barr the journey through all of it. The thick and thin, the ups and downs and the pivots and the persistence and how it changed the game. Free an Amazon number one best seller. I’ll sign it and ship you a copy just cuz I believe in the stories in here. Happy to give back and this is part of my time freedom. I get to spend time talking to you and I get to spend time talking to investors and contribute to their life. So pa invest on main street.com/book and use promo code. What promo code are we using?

Charles:
Global investors?

Patrick:
Use promo code Global investors so my team knows who you are. You’re not somebody random and you really did get offered <laugh> this book for free. And we’ll send you a sign signed copy of it Patrick at invest on main streete.com as my email and on my website, you can set up a call. I’d be happy to discuss your goals wherever you’re at and get you pointed in the right direction.

Charles:
Awesome Patrick, well thank you so much for coming on today and looking forward to connecting with you here in the near future.

Patrick:
Absolutely. Thanks so much, Charles.

Charles:
Talk to you soon.

Charles:
Hi guys! It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in get involved with real estate, but you don’t know where to begin, set up a free 30 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com. Thank you.

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About Patrick Grimes

Patrick has fifteen years of experience in active real estate investment: purchasing distressed assets, renovating, and stabilizing for long term cashflow. His portfolio includes controlling ownership over 4000 units in the emerging markets across Texas and the South Eastern United States.

In addition to his real estate experience, Patrick holds a Bachelor of Science in Mechanical Engineering from University of the Pacific, and a Master of Business Administration and a Master of Science in Engineering from San Jose State University. He has spent 15 years in corporate America working for machine design firms to concept, design, and build one-of-a-kind custom manufacturing automation and robotic systems. In addition to working closely with the technical engineering teams, he travels globally working to negotiate contracts and secure multi-million dollar investment for automation programs. He has been able to leverage his corporate experience and real estate knowledge to help pave the way for future success.

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