Patrick Featured on the #1 Commercial Real Estate Investing Podcast, Lifetime Cashflow,
Hosted by Rod Kheilf

Patrick Featured on the #1 Commercial Real Estate Investing Podcast, Lifetime Cashflow, Hosted by Rod Kheilf

Patrick Featured on the #1 Commercial Real Estate Investing Podcast, Lifetime Cashflow, Hosted by Rod Kheilf

#1 commercial real estate investing podcast
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Here’s some of the topics we covered:

  • Single family vs multifamily
  • One man band
  • Bringing your superpower to a team
  • Aligning your passion with your superpower
  • Overcoming analysis paralysis
  • Massive Freakin’ Action
  • Definition of Success
  • The power of adding value
  • The subjectivity of underwriting
  • The importance of scalability
  • Velocity of Capital
  • Patrick’s Book: Persistence, Pivots and Game Changers
  •  

Full Transcript Below

Rod
Welcome back to Multifamily Rockstars. So, as you know, this is where we interview people that are truly crushing it in this business. And we show you the inside scoop as to how multifamily investors are creating massive success not just in their businesses but also in their lives. And as always, I’ve got my co-host, who is the director of my massive action team for my warrior program. Mark Nagy on the call. Mark, what’s happening, bud?

Mark
Oh man, the boot camp. I keep talking about it, but the boot camp coming up, hundreds and hundreds of people meeting up in Orlando. For people listening, if you haven’t gotten a ticket yet, get it. It’ll sell out. It’s going to be an awesome time. Three days. And yeah, I’m just finishing out the year strong. It’s going to be a lot of fun.

Rod
Yeah, I’m very excited about that, too. It’s so nice to have you know, be back to live events again, and it’s been– good Lord, it’s been almost two years since we’ve been able to have one, so I’m very excited. You know, of course, I’ve done all those virtual events, but you know, having the energy from a crowd just makes all the difference in the world. Well, I’m super excited to interview my friend and warrior and actually partner today. His name is Patrick Grimes and Patrick, his website is InvestonMainstream.com, and he’s got a ton of experience, incredibly intelligent guy. He’s a general partner in 1200 doors and has been in real estate in general for you know, a good bit. And I’m just going to butcher his bio. So, Patrick, I’m just going to let you tell us your story and talk about your experience. Welcome to the show, my friend.

Patrick
Well, thank you. I’m excited to be on. Obviously, you’ve played a big role in help guiding me into pivoting from, say, single-family to multifamily. And you know, I’m grateful for the opportunity. My wife and I live out in Honolulu, originally from California, and I come from the high tech business and have been doing that for about as long as I did, as I’ve been doing real estate, but currently today, the CEO and founder of Invest in Main Street, and we’re purchasing multifamily properties with partners throughout Southeastern Texas. And as you know, Rod said, probably by the end of this year, we’re approaching about 2,000 units and 150,000,000 in management.

Rod
Yeah. Awesome. I know you’ve been involved in deals with us, and you’re going to be in some future deals with my ex-partner and me that I’m still involved in as well. So just a lot of exciting stuff happening. And I know that you just co-authored the best selling book as well. Amazon bestseller in, like, 20 categories called “Persistence, Pivots and Game Changers”. And you’re one of the authors on that, which I’m very excited. So guys, check that out on Amazon, “Persistence, Pivots and Game Changers”. So that’s super exciting. I saw your emails on that very recently. So let me ask you this. Talk a little bit more about your background because it’s fascinating. And you know, I know that you know, you add so much value to a multifamily team. I’d like you to talk about where that experience came from, because I know you’re huge in digital marketing and all that and how that has transitioned into what you’re doing now, those skill sets. So if you speak about that a little bit.

Patrick
Yeah. Absolutely. Well, you know, I come from an engineering background. I have you know, two master’s degrees, and so I tend to keep my head pretty close to the grinding stone. So getting my story out there isn’t something I do too often, but it really comes from this kind of dueling try to escape from the job. But the high-tech and real estate kind of battle throughout my career. I mean, I was raised up in the mountains and became technical pretty quick in my younger years, and got into mechanical engineering and got my first job doing machine design, automation, and robotics for a car manufacturer, the Toyota plant. And it was going great, but immediately moved into some more machine design for manufacturing. And the owner said, hey, look, you need to put all your money in real estate because this high tech business, while it’s profitable and a lot of fun cognitively, it’s not really going to get you to where you want to be and you’re going to work until you die and all this stuff and buy as much property as soon as you can. And my old trusted friend that’s still investing with me today. Dave told me that. And so I was off working on and at that time, you know, the market was just going like this. And you know, I was going to invest as much as I can, as soon as I can, got involved with some development projects.

Rod
When was this, by the way, he went like this and put his hand up. Those of you listening didn’t know he was like– it was rising. When was this timeline?

Patrick
That’s part of the punchline. And I think me and you have some things in common because the punchline was this was when the market was never going to go down.

Rod
Oh, 06, 07.

Patrick
It was exactly you know, seven. I saved up every penny I had. You know, I come from a middle-class background. Working hard, and I put it all into these pre-development– the developer had a perfect track record, and we were going to make it and make it big. And then you know, eight, nine, 10, happened. And you know, I had made all the mistakes that now I know were mistakes. But I didn’t have the right kind of mentorship to tell me that. And I personally guaranteed all the loans. They came after me, that my loan had been bought and sold four or five times. They wouldn’t take the deed in lieu and just– Rod, you tell me similar things.

Rod
Oh, times 800 in my case. But yes.

Patrick
Oh, yeah, for sure. No, in a very smaller way, you know. But they say, you know, don’t lose half your money you know, and don’t lose money because you lose half of it. It takes 100% return to get back. Right. But what happens when you lose it all? What percent? It’s a pot quiz. What percent does it take to get it all back? The infinite return to get back. So I came crawling out of that hole, and it was a very humbling, very trying time. And then I realized there’s a difference between speculating and calculated investing, right. And that sort of new construction, new development was a little bit more like going to Vegas. And I just didn’t want to put my big stack again on green and roll and roll the dice. And so, you know, I was determined not to go bankrupt. But the foreclosure on my record, I had to pay the taxes on the debt, forgiveness, and everything. And then I came back to the table. Many years later, I got two master’s degrees called three years, four years later, one in business and one in engineering really started rocketing my career and doing projects like Tesla. And I just realized I was working 60 plus hours a week. And I heard those words that I needed to get into real estate. And so at that point, I started researching the lowest risk places and asset classes. And that’s when I learned about the ability to buy distress in a place where comparables were known, things could be calculated. And then I learned about what markets were resilient, hedged against things like market volatility, and have diversified employment. And I started doing– I’m out of California at the time I started buying in Houston, Texas, right? Buying these single-family properties, fixing them up remotely. But you know, moonlighting that it was successful. But moonlighting was challenging.

Rod
Sure.

Patrick
And I saw that I needed to do, like, 20 more times before I would get to a spot. And then each time I did one, there was more management headache. So within a year or two, I knew I needed to pivot. And then I met my wife, which, you know, sure. And that was a game-changer because I was no longer moonlighting single-family. She was there when we closed on our last single-family. And that way, I said, I’m taking a break. And then I proceeded to marry her in California and then in Beijing. And we had a great– and after that, I said, hey, look, we’re going to go do multifamily. And that’s when– the winning through scale– it really came through. And that’s when I became introduced to your warrior program. It was out of a California event.

Rod
Oh, you were at the L.A. event. Okay. Fantastic. I couldn’t remember when you joined in.

Patrick
We actually joined before the vote is because of that that we learned about your organization because there aren’t a lot of them you know, doing things in California.

Rod
Right.

Patrick
And then we got integrated. And I’ll tell you what, I am a hard worker. So I had bought a ton of programs. I had been nights and weekends just learning at this point, all these– but it was really the message of the massive action. Just go do it, just get it out there. And it was the network of the warriors. I think that really immersed me in okay, accountability. Let’s make it happen. Just massive action. And I knew all the information because I had studied and studied and studied, and I knew all the academics, but it was about in the mechanics about making it happen. And at that point, you know, before Covid, we travel all over the United States, you know, still, weekends and stuff because I’m still doing high tech. And we had found a lot of deals just didn’t feel right because obviously, I’m very conservative. And there was a lot of deals people went forward with and you’re like, well, just pass, we’ll pass. And that went on for a while. And it wasn’t until you know, I was passing all my deals to your team and they were underwriting them and say, well, maybe this isn’t conservative enough. And it wasn’t until Covid hit and some of the deals we were head going kind of vaporized and through Covid, your deals started coming up. And since I had brought so many to the table to your team, they had said, hey, look, why don’t you work with us on one. And at that point, I just dove in. I didn’t have any idea what role I was playing. I just dove in. I was you know, working with–

Rod
The first one was Brighton place, right?

Patrick
Yeah.

Rod
This one is Brighton place. Okay. Yeah. And you did so much work for us, too. You really rolled up your sleeves to due diligence. You did the offering memorandum for the investors. You’re fantastic with you know, laying out an incredibly impressive PowerPoint. You did the research, you just added a tremendous amount of value. And I know since then– I mean, you’re on track just with us, I think, to be on track in general, to be over 2,000 doors by the end of the year. And I don’t know how many of those are with us, but there’s a bunch. And so you know, we’ve been super impressed with the job you did. Both Robert and I. And you’ve added tremendous value.

Patrick
I appreciate it. Go ahead, Mark.

Mark
I was just going to say on top of that, yes, the most successful people that we always see are the ones that just continuously try and add value to others with nothing expected in return. And then somehow magically, by coincidence, they’re successful two or three years later. Right? So that’s a clue.

Rod
Right.

Patrick
Yeah. It was constantly traveling out to deals, underwriting deals, bringing deals to the table, and showing up consistently as getting it done and consistently showing up. That actually put me even on the radar, I think. And then in a very troubling time, your deals were as conservative as I was looking for and quite a bit more conservative than the majority of all of them out there. And I’m an ultra-conservative individual. Very good fit. Right. And I can fully wrap myself and I even signed on many of those loans. Right?

Rod
Right.

Patrick
So you know, that just shows an extra level of, hey, I’m 1000% in on this. Let’s do it. I think that I didn’t know what partnership percentage, or what was going to happen. I wasn’t looking for a handout and I wasn’t leading with let’s get a contract signed. Let’s just go get it done, you know.

Rod
That approach was– I’m going to tell you really refreshing because it wasn’t about what’s in it for me, it was the whole adding value thing like Mark just talked about. It was all about that and Robert, and I saw it and it was a no-brainer to bring you in.

Mark
I want to jump back. I know you talked about the aha moment from the single-family jumping into the multifamily. For the listeners, what triggered that? Was it a certain amount of doors? Was it a certain amount of time period? Were there too many headaches with certain tenants? What triggered that aha moment that made you jump from single to multifamily?

Patrick
Well, I was listening to quite a few different podcasts at the time. I run every morning. And so, as I said, I learned a lot. At the time I started really struggling with the reach of trying to manage things from afar while having a high-tech job that wasn’t anywhere nearby. With the single-family, I had to do every single job. I had to go find the deals, underwrite the deals, I had to show up, do the due diligence on the deals. I had to manage the construction of the deals and then even manage the property manager of the deals. And every time you would add a new one it would be– it’s not a team sport. Single-family is just a one-man-band. And I wasn’t passionate about a lot of that stuff, right? And it got to be just a ton of work every time I added one. Whereas, when we did Brighton Place, doing the entire 86 unit first deals a little bit smaller than you know, 2-300 units that we’re doing now. And I think this last one is $700, but that one deal is equivalent to, like, two single-family deals. And the deals are large in terms of the work that I put in. Right. But in terms of the enjoyment– now, I’m doing a team sport with the most amazing players who are perfecting their craft and doing what they want to do, and they’re in their niche passionate about it. And they’re not forced to kind of work in all these other areas if they want. It’s a much better– and I was going to have to do another 20 different single-families. I can only do you know, four a year, right with this incredibly demanding job. But once you get into single-family and you get in your sweet spot, you figure out where you add value and where you’re super–

Rod
Multifamily you mean.

Patrick
Yeah, once you get into multifamily and I say, hey, this is my superpower. You know, I just tell you what. I have a passion for helping people that are in a single-family dealing with tenants, toilets, and trash and trying to get their property managers to deal with their scattered portfolio because the property manager is making, like, $100, $200 a month that barely pays for them to just get to the properties. You know, with multifamily, you have the economy of skill. You have them on-site, calling you every Monday, reporting to you instead of the other way around. You chasing them. And also with busy professionals, I have a passion for helping busy professionals because I am one, right? And I know what it’s like to have to work you know, to see a path where you’re going to basically work until you die. I see my stocks have been gutted by the volatility of the market in the past, I’ve seen really the bad– the wrong kind of real estate deals go south. And you know, in the multifamily space, I see a path where you have limited exposure to market volatility. You have inflation hedging, you have extraordinary tax advantages because of the bonus depreciation and cost that you would otherwise wouldn’t have. And the smaller– and you can be in a purely passive position because the assets are large enough to fund incredibly experienced people that have been doing this for decades with the track record.

Rod
Right? Let’s talk about that for a minute. Hold on, Mark. I want to drill down on– you talked about superpower, and we talk about that on a fairly consistent basis here. And I just want to hammer that home. So you know, in your case, you brought a unique set of skills. Reminded me of that movie with Liam Neeson. I have a special set of skills. You brought some incredible skills to the table, and that’s what’s so beautiful about this business is you don’t have to do it all. You work in, what you’re powerful in, what you love, what you’re passionate about. And you bring that energy to a team that handles the things that you’re not as passionate about. And success is, frankly, it’s a given. It’s inevitable. I just want to hammer that home guys. You don’t have to know everything. There are so many different roles in the multifamily realm that you know, you align with a good team. Patrick was you know, blessed and so talented to you know, align with our team, and it was obvious that we wanted him. But there are lots of teams out there, and you bring the value. You figure out how you can add value, by finding deals, by building relationships, by doing the analysis, by doing the due diligence, the property management, maybe helping with creating the offering memorandum like Patrick did that as well and doing the research on a deal. There are so many ways that you can add value. You don’t have to do it all. I just want to hammer that home for a minute. So, Patrick, let me ask you this. I know you’re still working your core job. Yes. I mean, you’re still doing you know, the digital, so you’ve got 40 hours for someone else and you’ll have 2,000 doors as a general partner. KP, by the end of the year. The first question I have is how do you manage all that? You know, you’re going and visiting properties. You’re doing research. You’re doing due diligence. How do you get all that done? So speak to that first.

Patrick
Well, Covid helped out a lot, right? Because everything became remote. It became harder to travel on-site. So where I would normally be traveling to sites for machine design, robotics projects. I’m doing a little bit less now, right. And that helped. But it also on weekends I’m able to travel out, and you know, I’m able to take vacation days or you know, stuff like that to account for the days that I can’t be away. But the reality is you know, I can chunk away like you’re talking to a guy who was working full-time and did two master’s degrees. So for me, getting the work done has never been the problem, right? I think it was really just taking that leap and just hearing the massive action and then just doing it. Right. Getting over the analysis paralysis, I think, was really what was the least–

Rod
Did you suffer from that for a while? Curious.

Patrick
Yeah. Well, it was a combination of analysis paralysis and just kind of altered conservatism because of my past. And I think those things serve me because I– very careful steps. But also it meant you know when we wanted to start doing multifamily. It was years before we actually got into a deal, right. And I don’t think that that’s bad, but it did take a while. Some people are way past where I’m at.

Rod
Well, yeah. And some people are making mistakes right now, too. And you are very conservative, as are we, because of our you know, the baggage that we dealt with in the past. So let me ask you a more global question because I know you moved to Honolulu. Which is a big deal. Talk about that. I don’t want to put words in your mouth, but are you starting to look through more of a lifestyle filter?

Patrick
Well, yeah. So how does that go down? Because it’s in the book is we were in Los Angeles. The fires were coming through constantly. We were not only on quarantine, but we were on a curfew because of the riots that were happening and the looting and the whole city was boarded up, and my wife came out. We were working at home saying, let’s move to Honolulu. I just had us on a plane two and a half weeks later. It was just massive– everyone was packed up, moved out. We woke up in Lanikai two and a half weeks, and one morning after, you know. And ever since then, she’s been getting promoted. Animations have taken off, and we’ve been killing it. And I’ve been red-eyeing back and forth. Right. It’s another six hours between here and just California, much less. And we’ve been making it happen.

Rod
Massive freaking action. Well, let me ask you one more question. I don’t want to steal all of Mark’s thunder. What is your definition of success? What’s driving all this? How far are you going to take all of this?

Patrick
Well, my definition of success is making careful steps and bringing people with me. I think my whole life has been–you know, even my birthdays for 12 years before Covid, I took a group of people to the wine country in California for the whole weekend, and my version of success is surrounding myself with the right people and creating an adventure and bringing them with me. And so that’s what I love about it. I love the team, and I love the partners, active and passive, and making it happen. And right now I feel like we’re adding value, right? They’re adding value to us by enabling the deals, and we’re adding value back by providing good returns. You know, to me, I’m not a greedy individual. I come from you know, middle-class, multifamily. We’re doing just fine. My wife is doing great, but I think we just love the road we’re on, and we love the people we’re working with, so we’re just going to keep after it.

Rod
Love it. Love it. Well, listen, I know you’ve added tremendous value to the warrior community and those of you listening. If you have any interest in the warrior program, text the word “CRUSH” to “72345” so we can help you crush it in this business. Like Patrick is knocking it out of the park with and again, text “CRUSH” to “72345” to apply, and then we check you out and you check us out. If it’s a fit, we’re off to the races. So we’d love to have you check it out if you’re interested. Mark, I’ve kind of been monopolizing the conversation.

Mark
Well, I know you mentioned the analysis paralysis. That’s one more thing that I wanted to ask you is what role has mentors like Rod or anybody played in your business in life? Was it something where you wanted accountability or someone to push you or what made you decide hey, I want to get a mentor rather than just do things on your own?

Patrick
Well, I want to do accelerate things because first of all, I feel like I had already done the academics, right. I’d already gone through so much myself. I didn’t need somebody to do it for me. I just needed somebody to kind of push me over the line. And I think that the mentorship programs are an accelerator. If you’re the right person, you know, they say, when the students are ready, the teacher will arrive, right.

Rod
Really good point.

Patrick
That’s the reality. I see a lot of people in the program just show up being like, okay, let’s do this. And I’m like, do what are you bringing? What direction are you going? I was bringing deals to the coaches, you know, just like I was bringing deals to people before, and I think it helped out with, is this a good deal or is a bad deal and what is a good deal, bad deal? Underwriting is subjective sometimes it’s open to interpretation, and everybody’s concept of risk is different and they have different– and they believe– so it’s a judgment call at the end of the day. And that kind of wisdom and that kind of experience comes from sometimes having some failures and having a coach there that has done that and been through some failures or seen things go wrong and been humbled and that to them to say, okay, this is a good deal and why and why these aren’t. That really is I think what kind of helped me out I think. It really pushed me over the edge.

Rod
Good. Awesome. So let me ask you this. And you’re the kind of person I could ask this of. I asked this on the other portion of our show if you went back with the knowledge that you have right now based on you know, the incredible success that you’re manifesting and making happen and went back to you know, ten years ago, what might you do differently? What might you tell that version of yourself about this business or life in general that you might do differently?

Patrick
So, yeah, ten years ago or 15 years ago.

Rod
15. Whatever. You pick.

Patrick
As you say, you know, it’s the experiences that were tough. That hardens you, that you know, kind of built makes you stronger, right? I don’t regret where I was, but probably I did have people saying, well, why don’t you think of multifamily, multifamily multiple years ago and back when even when I was doing single-family in Houston, right. They were saying, well, have you considered multifamily? I was like, well I’d rather have control. I’d rather be calculated. I’d rather kind of do it on my own. And I would rather just kind of hold invest and just buy you know, buy, renovate refinance and hold.

Rod
Right.

Patrick
And then, I wasn’t listening and really diving into you know, scaling in a way where you use other partners and what that would mean. And how– instead of hold investing, which actually just drives your returns down and down while I’m in a growth mode, keep my velocity capital higher by buying properties that could renovate and then roll those into the next and then renovate and roll those into the next, renovate. And so I wasn’t doing that. And I would say, those are great deals. I’m selling them for you know, for four times what I paid for them now. But I could have been so much further had I just taken the leap and took the risk and maybe got a little bigger and allowed myself to trust and just kind of take the time. Instead of just getting into my most single-family today with my own money, I spent two years learning how to learn, how to do it with other people’s money. And there was an investment there too. Right?

Rod
Sure. Time and learning investment. Sure.

Patrick
Exactly.

Rod
But the velocity is there. Now, look at you. Since you have almost 2,000 units and as a GP, and this is not a limited partner either. This is a GP and KP, which is just extraordinary. Well, listen, brother is great to see you. Please, as I said, give Shuo a hug for me. I really appreciate you coming to the show. You added a ton of value. Guys, check out his Amazon best-selling book, “Persistence, Pivots and Game Changers”. I’m excited to get that myself, and I really appreciate you coming on the show, my friend. Thank you.

Patrick
Absolutely happy to do it. Thanks, Rod and Mark.

Mark
Take care.

Rod
Thanks.

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