Passive Alternative Investments For The Average Joe

Mike Cavaggioni:
Welcome back to the Average Joe Finances podcast. I’m your host Mike Cavaggioni, and today’s guest is Patrick Grimes. So Patrick, super excited to have you on the show, thanks for joining me today.

Patrick Grimes:
Mike, I’m excited to be here too. A lot of things about your show, and the fact that you’re in Hawaii, and everything else that I like about it.

Mike Cavaggioni:
We were actually just talking about that a little bit off camera how you spent some time out here during the pandemic. And in one of the nicest areas of the island when it comes to probably the best-kept secret of where our best beach is. I’m not going to say that publicly on here because then it’ll get swarmed. Again, thank you so much for joining me. I want to start this off the same way I start every podcast episode and we’d like to know more about you. So if you could tell us a little bit about yourself, what’s your backstory? Who is Patrick Grimes?

Patrick Grimes:
Sure. So today I’m the CEO and founder of Invest on Main Street, a private equity firm. We provide passive investments in various asset classes, specifically real estate, large apartment buildings, affordable housing funds, and single-family portfolios, as well as diversified energy fund. Really our thesis is to provide an inflation hedge, recession-resilient investments that are protected from interest rates and non-correlated to the stock market and each other. Better retirement, faster, that kind of thing.

I started out in mechanical engineering. I was a mechanical engineering student in college. I started out as machine design, first job, the guy sent me on a tailspin said, “Hey, you’re talented but you should spend your money in real estate because my only regret is I didn’t put more in real estate sooner.” So that led me to just dump everything I had, which wasn’t a whole lot, into these double my money real estate deals, really ones that development, pre-development. I personally guaranteed it. I was like ready to take on the world and slaving away at my job.

Then nine and 10 happened and I lost everything, rode it down hard. The big bust. Dove back in high-tech. Like many of your listeners, I was the average Joe working real hard. Got to the point where I made considerable income again, got a master’s in engineering and business, and I was like “Well, where am I going to invest?” Not in the stock market because I still remembered I got to diversify out.

So I got back into real estate but this time more the tortoise, not the hare. This time more recession resilient, this time more calculated risk by producing assets, not free development. So I then built a single-family portfolio buying, renovating, and holding, and renting, and then continued to do that until I traded up to larger apartment buildings toward … My first one was 86 units and then I did ones two plus 300 units, all recession-resilient markets. And then I diversified into energy portfolios to help further balance the portfolio into non-correlated assets. Invest on mainstream has grown from all that and now I’m full-time. Exited the high-tech space, and my wife and I have freedom to do things like move to Hawaii during COVID, and do all kinds of fun things.

Mike Cavaggioni:
Wow, Patrick, that’s awesome. And some background too, right? I mean, you don’t hear too many people … Or I don’t think I’ve heard anybody yet come on this show and talk about how their journey into real estate led into energy so that’s pretty interesting. I’d like to know more about what made you decide to diversify into energy instead of just sticking with the multifamily assets that you know were tried and true.

Patrick Grimes:
Real estate is an alternative asset. It’s alternative to what most … The average Joe would have their funds in a 401(k) or an IRA and that’s what their employer would tell them, and that’s what their parents did, and that’s all they would know. And then maybe they’ve graduated to getting a financial planner, but then that financial planner just dumps them more into similar indexes, sentiment-driven stock market, very few long-term inflation hedged. It’s a volatile space all in its one cyclic model. So alternative investing is real estate and other asset classes.

I believe in real estate, especially the fundamentals, and I think in any market you can make a good deal and find a good investment in real estate. And we can structure investments to outlive and to actually thrive in a down market such as our affordable housing portfolios and our workforce housing multifamily deals so that they don’t lose it all again. But that is still one correlated asset. And you’re talking to somebody who’s lost it all in real estate before.

If you read my passive investors guide on my website, which is a free download, it talks about how the middle class, really at the 8% of their wealth and alt asset, alternative investment. The high-income earners have 25 and the ultra-wealthy have 50. But if you look at the stack of where all those … Where 25 to 50% of their wealth is, it’s not all in real estate. In fact, that is one allocation of their capital stack, it’s in other alternative investments. And the wealthy invest for essential needs like housing, food, and energy. They invest for to pay no taxes. They invest in all kinds of assets that don’t rise and fall together, right?

And energy is the obvious next one, especially today in the supercycle when things are going up. Your investments, unlike in real estate energy, they come right off your ordinary income. So if you’re a high-income earner invest in energy, you don’t have to pay taxes on that investment for most of that investment. And we’re seeing cash flow and appreciation in a completely different market than real estate, where real estate’s center is reset and the stock market’s down. You can hang your hat somewhere, it’s still going up. Quite honestly, it’s the converging of quite a few different theories but the foundation of a healthy portfolio, especially when it comes to winning with inflation. Right now, the strongest inflation hedge is oil and gas.

Mike Cavaggioni:
Oh. That’s a great point, right? Everyone talks about how they diversify their portfolio, usually talking about paper assets, right? They’re talking about what you were talking about earlier, right, in the stock market you don’t hear too many people saying, “I’m diversifying my portfolio to not only be in these alternative assets of real estate but to also into other alternative assets.” Now, some people have talked about how they got into crypto and NFTs, and all that other stuff. That’s not for me, I never really got into that. Other people also do precious metals, and minerals, and things like that. It’s interesting to have somebody come on and talk about the actual energy side of it because I don’t think I’ve had anybody on the show yet that actually does real estate and energy, so that’s pretty neat. What, I guess, assets do you have in your energy portfolio?

Patrick Grimes:
Well, for the most part, to your point, that’s absolutely true. Some people tend to be like that one-trick pony, you learn one thing and that’s the one thing. The problem is when you get really badass at something, you get way too indexed in that one thing. If you talk to more other people doing that same one thing, then they’re just going to get you further and further in that rabbit hole. When you said that there’s not a lot of people-

Mike Cavaggioni:
That’s very true.

Patrick Grimes:
There’s not a lot of people investing. Well, that’s what I was saying. If you actually point to how are the five or 10% … How are those people investing that are having their money work for them and having generational wealth? Well, that’s how they’re doing it. But in energy, it has … Sometimes it can have a bad rap. Unlike real estate, which has very limited shade in its past, it’s far more revered as the capital storage and wealth builder preservation. And I believe that to be true. Energy can also be volatile and risky just like real estate can be volatile and risky, I lost everything in it. There are lots of people that have lost all their money in energy deals and oil and gas drilling. To answer your question, what kinds of assets? Well, recession resilient and tax advantage inflation. We’re invested in diversified funds.

Just like how you have hundreds of units, in an apartment building, if one has a fire or one burns … Well, if you have hundreds of units that washes out in the economics. So if you drill one oil well or one gas well, and it fails you’re all in, and you’re all out, right? But if you do it over a large diversified fund, then you can build economies with scale and it’ll wash out in the economic. Similarly, when we do real estate we buy in landlord-friendly locations and proven areas with adjacent buildings nearby that are producing, so we have proof, right, and we buy a secured asset.

Well, in our energy fund we’re buying leases, we’re not exploring call it wild catting in the middle of nowhere and hoping. We’re buying a lease surrounded by producing wells on top of known reserves, and we’re drilling multiple wells on those leases. That gives us more assurance that somebody else has already done the highly risky thing and found the natural gas and oil. Somebody is also producing. And we’re willing to pay for an existing asset, something that has already been determined, and then farm it. Or, like we do in real estate, we buy a building or buy a piece of land, a secured asset, and then build a proven business plan. And we do that by diversifying not only at scale but across different geographies, and we do that by the diversifying of different products. Putting some natural gas and some oil and that allow it’s to pivot.

I mean, you think about it, it’s very similar to having a mixed-use, multifamily apartment, mobile home, Airbnb, a large different diversified portfolio at scale in multiple states across the country. We’re just doing that and applying those same basic principles over to an energy fund to allow our lower-risk way to access it, take advantage of the tax advantages which offset your ordinary income, and provide for a more reasonable return. Not a get rich quick like spin the big wheel and put it all on Green 24 and hope for the best like I did back in 2008. And I didn’t know that’s what I was doing at the time. There’s safer ways to do investments in all kinds of verticals. Oftentimes you have to find somebody that’s lost it all one time to appreciate those. That’s where we’re at.

Mike Cavaggioni:
Oh, I know that for a fact. I mean, I bought my first property in 2007, so what do you think happened there?

Patrick Grimes:
Oh my gosh, me and you both. I’m sorry.

Mike Cavaggioni:
It actually knocked me out of the game for a while and I stayed away from real estate because I was … I guess I let the fear get to me, right? I was very fearful of what could potentially happen next, right? Now I look at it as okay, well, if something like that happens again that’s a buying opportunity. Just, my whole mindset shifted. I think that’s what a lot of people who aren’t really sure about investing at all, they have this fear mindset. That’s one of the things that we try to alleviate on this show is that’s the first thing you got to change is your mindset, right? I mean, if you didn’t think to go a little bit bigger, right, you would’ve never diversified the way that you did and created this huge thing that you have now with Invest on Main Street, right? Which speaking of, I want to ask you because now that you have this well-oiled machine, no pun intended, right, got the energy in there.

But now that you have this big thing going on, you’re doing a lot, right, Patrick? What would you say … Or what are some tools: software, CRM, or anything that you personally use to keep yourself organized and track everything that you have going on? I know a lot of people when they start getting into this game, and there’s a lot of moving parts, sometimes you get lost in the sauce, right? What software do you use?

Patrick Grimes:
I come from an automation robotics background, machine design, and there’s … My master’s degree in engineering had an emphasis in systems engineering. What you’re speaking is my language, right, and developing processes, and making things more repeatable, and rinse and repeat. We talk about that all the time. In real estate, I was like, “I want this investment to be so boring that I’ve explained it to you so simply, and we just do it over and over again in the same way that it’s so repeatable that it’s boring.” That’s what I want. We don’t want flashy, wild, and exciting things. To answer your question, we have … So we use Asana for project management if that’s what you’re asking about. We use Slack-

Mike Cavaggioni:
We use Asana too, I love it. Slack.

Patrick Grimes:
We use Slack. We use three different types of backend portals. We have Update Capital, SyndicationPro, Next Fest, and we currently are launching a cash flow portal which are all different portals that allow us to access different kinds and track different kinds of investments. Man, we have Zoho CRM and we have … Which does pipeline and funneling. We have ActiveCampaign which helps us warm up and send out, keep our investors appraised about the latest investments. I’m trying to think. On the front end and the back end, we have so many different tools that we use that it’s hard to get to all of them. I would say that’s the shortlist.

Mike Cavaggioni:
No, that’s great though. But you would say that running some type of organization like this you need some type of CRM system in place and software. I mean, that would just be too much to have on a spreadsheet, right?

Patrick Grimes:
Well, when I started I had this I’m going to start in a way to scale. Even though I started on day one with a website, and a CRM, and automations, and building this platform with information, and investors, and knowledge, and content I still to this day am like “Well, why didn’t I start with a better one? Why didn’t I pony up and get HubSpot first on day one?” Because it was a four grand expense or something just to start. I was like “Well, let’s step into this.” And I started with ActiveCampaign. But if I would’ve thought bigger sooner … I mean, I was thinking pretty big even then. Putting in and investing in the software sooner I think is wiser because right now we only need Zoho because ActiveCampaign can’t get us where we need to go. Had we done HubSpot it would’ve done … Right? So I think it’s something to think about definitely.

Without the systems and processes we would’ve never been able to scale. For this last round of energy raising we onboarded 100 investors just right before the holidays. And we have 20 plus SOPs just for that, just to be able to get an investor into our system. And there’s so much stuff that’s required to receive an investor and get their investment in a securities offering. Not only in but the accreditation letters, the filings with SEC, and everything.

And we have a whole team of people chugging along doing it. And we had two people leave right after the … Right during the holidays. One had carpal tunnel and then she couldn’t go, and then another one’s mom had breast cancer and she asked if she could spend time with her mom. Oh, and then a third one’s leaving now because she’s going … She’s been with me for four years and she’s going on maternity leave. These all have an open invitation to come back but they’re still gone. And if it wasn’t for these procedures and processes, and systems we’d be totally screwed right now, right? There’s a lot of different reasons, right? It allowed me the flexibility to let them go and still run a company and not have to like “No, you have to stay.”

Mike Cavaggioni:
No, you have a lot of fail-safes in there so that’s great. The automation and just having these different processes in place. I think that’s the most important thing is you have a really good process, right, you have a really good system. So I wanted to ask you, Patrick. From when you started to where you are today, what does your organization look like from the beginning to now?

Patrick Grimes:
Well, it started out where I was just analyzing single-family homes myself. I bought the hold investor and I was just going to hold homes forever. It’s the yellow one on the thing over there. I was learning how to analyze deals, learning how to find recession-resilient markets, ones that had bounced back quickly, learning about diversified employment. This was when I came back after the big downturn. I was analyzing all the deals, I was flying to places like Houston, I was looking at the properties, I was building teams, property managers, inspectors, appraisers, renovators. In fact, the guy who renovated a lot of my properties as a single-family now works for me and invests on Main Street in multifamily now. He reeled me into single-family I reeled him into multifamily.

Mike Cavaggioni:
There you go.

Patrick Grimes:
I was doing a lot of that myself. The challenge was I was slaving away doing machine design automation and robotics, it’s actually a really, really tough job, and I was traveling around for that. For many years I was moonlighting this real estate stuff which made me pick … And I didn’t get married until I was 35. It was actually then that I met my soon-to-be wife that I said, “Look, I’m going to give this up.” And she was there for my very last single-family closing. I said, “I’m going to come back to this later but I’m going to do something different,” and then I married her in California, in Beijing.

And then after that, that’s when I came back and said, “Okay, I’m going to scale, I’m going to go private equity. I’m going to work with partners so I don’t have to slave away and do all these things I’m not passionate about. I’m going to find what my superpowers are. I’m going to bring other people that are already in the markets that I’m in that already have the know-how and knowledge and we’re going to team up, we’re going to partner up, we’re going to scale in a way where we can scale by building out teams with processes, and systems, and partners.” And it wasn’t until I learned that I actually started succeeding better, getting into better assets. Ones that are larger apartment buildings with onsite property management that are non-recourse, that are much safer, and better appreciating markets. I was able to build more credibility with buying power with brokers to take down bigger assets as a team, right?

It wasn’t until I did all that, started building out partners vertically integrated on the property management and doing … Having teams of acquisitions and asset management as well as capital raising and men and … And building all those pieces together that … Where we are today. And doing that with strategic investments and strategic markets because we all have different people that have different verticals and energy or affordable housing or in large multifamily. And so just slowly bolting on and bolting on and bolting on more strategic relationships then. That allowed us to also leverage people that are really great at what they’ve been doing and they’ve been doing it for decades, right?

Mike Cavaggioni:
Right.

Patrick Grimes:
I’ve been in engineering and these people have been doing nothing but they’re one thing for decades and they love it and they’re good at it. And so it’s really allowed us to offer a much more complete offering to our investor base and diversify alongside of our investors and.

Mike Cavaggioni:
I think the important thing too, Patrick, that you’re talking about is having the right people and the right job, right? Obviously, you found those experts in their field, and you get to utilize that expertise, and it’s something that you can be a little bit more hands-off with. The difference was, when you were doing this on your own, doing the single-family homes, the buying, renovating, renting out, and buying and holding, you had to be that quote-unquote expert in everything that you were doing, right? Now you’re able to pull in all the experts in their particular fields and utilize their expertise while you can just be like “Okay, I don’t have to kill myself trying to get these assets and make this work.” That’s fantastic.

Because there’s a huge difference between the single-family side and the multifamily side, right, because I’ve done that too. Switching over, now I wanted to ask you when you made this shift … This is going to be a two-part question, right? So you shifted to multifamily. What did you do to find deals there? And also, when you started getting into the energy side, what did you do to find those areas where you leased the land for the energy side?

Patrick Grimes:
It’s a great question. My wife and I were traveling … I was already traveling for work a lot but I mean, she would come with me. I have companion pass she’d fly for free. I would go to work and go do the meetings. We would then travel around meet with brokers, tour all kinds of properties. We would look at the different brokerage firms and then we would see what their previous closed properties are. And we would actually go, before we’d meet with the broker, to four or five of their properties that they closed and then we’d see … We’d ask them, “Who did you sell that to? Who did you sell this to?” We’d walk this property, this is what we liked about this one, what we didn’t like about that one. Doing our homework prior and then learning from them they’re like “Oh wow, these guys have actually walked all these properties. They’re serious. Maybe if I give them a deal they’ll actually take it seriously and walk it themselves,” right?

Not only that but when we found out who that the broker worked with we contacted those sponsors and we’re like “Hey, we walked your property and such and such, we just met with such and such, we have just this really cool investment. Excited. Let us know if you ever need somebody.” And then we learned a little bit about what their … Why they are doing what they’re doing, what their buy box looked like, and we were able to start kicking opportunities to them that we saw. “Hey, did you see this, did you see that?” For the most part they saw everything already but that wasn’t it. They saw us at the table playing. We were swinging. Maybe we were playing little league but they were like “Oh that’s cute.” One of these days they’re going to be like “Well, you know what? We’re a player down. Why don’t you come and help us out?” And that’s how it worked out actually.

We brought deal after deal after deal after deal to all kinds of people. It took me two and a half years looking for deals, underwriting deals, and analyzing them, and doing due diligence, walking, flying around. It sounds like a huge waste of expense but it was the best hands-on education you can … Learning the nitty-gritty behind walking the units on what makes a good and bad deal to where finally somebody goes like “Hey, you know what? I have this small deal … I’m tied up on these other bigger ones but I have this small one, can you help me get across the finish line? I need somebody like you. You’re out there, you’re working hard, let’s just put you to work on this one.” And it was 86 units. That was a small deal for him.

So I went from a portfolio of three-bedroom, two-bath houses and then my next small deal was 86 units. And that deal’s smoking right now. We just increased the distribution to 9%. A year which is awesome. So then I did everything I possibly could do to take this over the finish line. Did Zooms with my partners, recorded them so I got everything, and I was back as … I was back at master’s program again. I was like “But this is the one that actually matters,” right? When I got back on with them I had done everything. I even re-listened to the Zoom to make sure I got every last little detail. And I worked my ass off, right? And even over holidays to make this happen.

By the other side of that, they were like “Well, great job. Hey, by the way, we actually have this other one, you want to do some of that stuff on this one.” And then they had the third one. I was in parallel with the second one. I was in secret flying out from Hawaii, landing in Dallas, walking apartments and we’re still closing on the second one. And I couldn’t tell any investors about it because I didn’t want to distract them. Shoot, this is another good deal so let’s … And I’d actually didn’t even know what percentage I was going to be in the partnership pool, I was just really excited to be finally playing on the right field with the right players and it was awesome. And now it’s a partnership that’s never died down we’re still doing deals together. Of course, I have a half dozen other partners in other markets and other things. But that’s how I got into larger multifamily.

Mike Cavaggioni:
Patrick, that’s awesome. Before we get to the energy side of it I want to jump in because this is exactly what I’m doing right now, right? So I’ve been at LP on a couple deals, and I’m just now getting into the operations side to be a GP, and I’m literally doing those things right now so that makes me feel a lot better about what I’m doing in my journey here. Had a call earlier this week with some partners and we’re actually feeding some deals now and I might be looking at raising capital soon. I don’t know we’ll see. I’m pretty excited about that. So that was a selfish question for me, right, because I want to make sure I’m doing this right.

Patrick Grimes:
Everybody has the same question, I totally get it. But I give you that it’s the hard way. The answer is you do it in the trenches and it’s not … It’s about being a servant first, and it’s about showing up with value, and making sure you’re in alignment with your partners. Because I walked away from a lot of deals a lot of times because it wasn’t exactly in alignment with my future goals. You’re marrying these people because you need to do deal after deal with them.

Mike Cavaggioni:
Love it.

Patrick Grimes:
My answer was just work hard basically is what I said.

Mike Cavaggioni:
Awesome. No, and that’s what you got to do. And like you said too, it’s the education piece of it too. By throwing yourself into the fire, right, that you’re going to learn a lot faster than doing a webinar or something like that. Just if you get in there and get your hands and feet dirty that’s going to be the best education you can get. All right. So, Patrick, so now on the energy side, how do you find those particular areas? I feel like it’s going to be the same but a little bit different so how does that look?

Patrick Grimes:
When I got to a 500 million portfolio multifamily I was looking around and I saw us coming into this recession and I was like “My investors are not diversified like me. My family actually, we’re diversified in energy.” I, with my buddies we’re all in these alternative assets, deals aside. And so I was like read my passive investors guide but they just kept more and more and more real estate, more and more multifamily. So I decided to take some of these deals that I’m investing in, vet them to a different level, even got my syndication attorney. It turns out the ones that I was looking at he was already invested long before me even. He’s done a billion dollars in transactions. I mean, these guys are solid.

I mean, these alternative assets, outside of real estate, are very well known to a small group of people, that’s the thing. I mean, we trade them like baseball cards. We don’t want to talk about them because they’re much harder to do due diligence on, there’s a different level of risk, they’re structured completely differently and so it’s hard to explain, right? People get really comfortable and use to real estate.

In order to be in a non-correlated asset, one that doesn’t rise and fall with real estate, you have to be in something with completely different fundamentals. It takes a big leap so we had to be really careful which one we go to. We did a lot of due diligence, sifted through my … I actually brought it a partner, Josh Mosgrove, he’s actually invested in 40 different alternative assets, and he helped … We passed these deals, and finally we found this one where operator vertical for over 25 years, fourth generation, and he had a structure that is diversified. And we said, “Hey look, if we massage this, and shape this, and package this in a way where it looks and feels like a multifamily deal.” You model what’s what I call the old boring way but you put in this new fund model where it’s diversified, and it’s scale, and you have monthly passive income, a return of capital, and an exit, and we syndicated, I think this is going to resonate really well.

We approached them and they had this … It was a perfect match, it was a perfect fit. I joined the board, and I’m a player now with the company, and we have offered these. That was a little different situation than sort of the typical real estate deal where I needed to find somebody who was really badass asset doing something else, right, because I’m really badass at doing my thing but that means I’m wholly indexed in this one thing. But now I have to trust and learn and do. So we did so much due diligence that we actually have the knowledge, the network, and the resources to do. Oh, and the time, and our past investors don’t. We went to bat and we did all of that. We got this structured, we worked a lot, a long time, it took us months to get through this whole process.

And then finally we offered it and it was very well received. People really needed that, especially today when real estate values are waning, cash flow’s going down, interest rates are going up. We see very clearly the need for and desire for people to hang their hats somewhere where they’re cash flowing independent in real estate, they’re appreciating independent real estate. And I anchor earners that don’t want to pay taxes. Even the wealthy invest and not pay taxes, and you can do that in energy. And we’re looking at a couple other opportunities in the future similar path.

Mike Cavaggioni:
Awesome. That’s fantastic. I appreciate you sharing that with us. It is important to diversify no matter what you’re into, right? And a lot of times people look at real estate and say, “Oh, well, I diversified in real estate, right? I have a couple single-family, I have some multifamily, I have” … “I bought a trailer park or an RV park or I got some land.” But the thing is it’s all real estate, right, so it’s all tied to a very similar market, right? So if real estate’s going up, the mobile home parks are probably also going up, the RV parks are probably also going up, land value is usually going up. And when all that stuff’s going down, well, the same goes for all those as well, right? Maybe not necessarily at the same rate but they’re all tied into each other like you said too. And a lot of the other things too.

If you’re investing in businesses that are tied to the real estate industry you’re going to see those fluctuating with real estate too. Actually, it’s very smart what you did to get something completely outside of real estate that it doesn’t correlate with it like you said. And that’s fantastic. I mean, there’s not a lot of opportunities out there for real estate investors to jump into something like that beside a real estate deal that they’re looking at, right? With Invest on Main Street, that’s something they can look at … They can look at two different things that they can get into with the same company, right, so I think that’s pretty awesome. Especially for your investors that know I can trust you, right? They’re already in a good spot because they’ve done deals with you on real estate in the past and now you bring this other opportunity to them and it’s like an easy yes, right? I think that’s awesome, Patrick.

Okay. I would like to transition this into something I call the final round. It’s where I’m going to ask you the same four questions I ask everybody that comes on the show, and it helps us get into Patrick’s head of how he is under pressure which I’m pretty sure you’re going to crush this. If you’re ready to go, we’ll get that party started.

Patrick Grimes:
All right, sock it to me.

Mike Cavaggioni:
Okay, here we go. So, Patrick, the first question of the final round is, what’s the biggest mistake you’ve ever made in real estate?

Patrick Grimes:
I think I alluded to it earlier, but when I was real young I was a snot-nosed engineer and I was like “Man, I’m going to just” … “Highest returning deal I can find.” And I did my due diligence, this guy, but I did not look at capital preservation. I didn’t fully get the downside to fully recourse loan. And so when I invested heavy to double and triple my money every couple years I doubled and tripled my losses. Losing is much harder to recover from than even just breaking even or losing your base. When it hits you that hard it’s hard to crawl out of that. I certainly recommend being the tortoise, not the hare, and be more calculated and long-term focused even if you’re early on.

Mike Cavaggioni:
No, absolutely love that. Be slow and methodical and it will come, right? That’s the beautiful thing about real estate, if you’re doing it right it’s a get-rich slow system, not a get-rich quick system. Okay. Next question, Patrick is, what is something that you’ve learned that you wish you knew when you first got started?

Patrick Grimes:
Partner up. Especially after having lost big in 2008, I was really scared to ever work with anybody because I was like “Well, I should only risk my own capital, my own investment dollars, and I need to control everything, right, because I lost this sense of trust in my investment portfolio. The reality is, I was really good at making income at my day job but I was struggling, moonlighting to try and take over this real … My investment portfolio but I wasn’t the guy qualified to do it. And I was trading all the time away from my family, friends, and hobbies to make that possible. Partnering up. When I finally learned to do that is when I finally began to scale more successfully, do what I love, and be able to give back to my family, friends, and hobbies instead of take away from them. That’s my recommendation.

Mike Cavaggioni:
Oh, absolutely love that. Real estate’s not a game you should be in by yourself, right? You can definitely scale a lot better if you have partners. And like we talked about earlier, you were finding the right people for the right jobs, right, and that’s another thing that’s going to help you scale immensely because you have experts in those fields where you can focus on what you need to do and let them do their thing. It just makes it like a well-oiled machine, right? There we go again with the energy. Okay. Patrick, third question of the final round is, do you have any tips or tricks that you would recommend to someone that is just getting started out today?

Patrick Grimes:
Think big early. Doing the single-family thing trying to control it and keep it small didn’t serve me. I wish I had those years back, and I had partnered up and allowed myself to be … I can become a private equity, I can get involved in these larger commercial assets. To talk, and work with, and basically, it just takes time there. You got to imagine these larger operators, these larger players that are out there doing the grunt work, it’s a lot of work. They have hundreds of people coming and saying, “Hey, let me play a role, let me help, let me help, let me,” whatever. You got to be consistent, you got to keep showing up. I think that as long as they see that … And when they give you something you deliver and you don’t come with your handout first, leave with value first, and you be consistent. I think that eventually they will or somebody adjacent to them will notice and they’ll point you out in the crowd and say, “Let’s do something.’

Mike Cavaggioni:
I love that, I love that. Actually, I was at a meetup recently and that’s one of the things we were talking about. When you create some of these partnerships it’s not about the person that just showed up with their hand out saying, “Hey, I’m here, I’ll help, I want to be part of this.” It’s the people that actually show up, and actually do help, and actually do add value instead of saying, “Hey, pick me, pick me, pick me,” right? Adding value is the best way to get noticed to any team that you might be trying to be a part of, right? Absolutely love that answer for sure. Okay. So, Patrick, this is the final question of the final round and I will preface this with besides your own. Do you have a favorite business investing or real estate-related book or podcast or both?

Patrick Grimes:
Who Not How I think is … Actually, I run around the lake behind me here in the mornings with my puppy and so I’m constantly going through audiobooks. But I’ve been listening to Who Not How again because more and more in my organization I’m realizing the that getting the right people in the right seats. It has really been empowering for me. I usually say The ONE Thing but right now I’m saying the Who Not How. It’s just such an incredible book and I recommend everybody read that guy.

Mike Cavaggioni:
Awesome. And actually, both are fantastic recommendations so I definitely appreciate it. Now, that is it for the final round. However, I do have one more question for you Patrick, and this is the most important one of all. Because people are listening to this interview and they’re like “Wow, I really like what Patrick’s doing, I really like what Invest on Main’s doing. We want to know more about him and everything that you’re working on.” So where can people actually find you? Do you have a website, social media, anything you can share with us? I know there’s a book. If you could tell us about that, that would be fantastic.

Patrick Grimes:
So Invest on Main and then street.com . We have some open investments, multifamily apartment building, a diversified energy fund, which if you get in soon we actually have a special promo for earlier in the year which provides for some great growth returns right now in a down market which is great. We have an affordable housing fund which kicks off … It’s a large single-family portfolio. Hedges against delinquencies that … Because the government subsidized rents. It’s fixed interest rates so we don’t have to worry about interest rate increases, and it’s a exploding market, affordable housing, right now so we’re providing a need. And so it’s going to be huge growth in a recession, especially stagflation. So I recommend people reach out if you’re interested in that.

And I’m happy to chat with anybody. If you are early in your journey and you just want to have a chat, get you … Or advanced and you want to diversify and you’re not sure how set a meeting, investonmainstreet.com/contact. Just go to our website and click on contact or set up a meeting. I’d be happy to understand your goals and see if I can get you pointed in the right direction. I always offer a copy of this when I do podcasts which is called … It’s an Amazon number one bestselling book that I put together with a handful of co-authors here. Persistence, Pivots and Game Changers, Turning Challenges Into Opportunities. Brian Tracy did the forward. Phil Collen’s, lead guitarist of Def Leppard’s in here. I did a chapter. NFL, NBA entrepreneur, speakers, coaches, players, just really cool people in this book. I just loved talking with all these guys, they have such extraordinary stories, and I was honored to be among them in this book.

I’m giving away free copies shipped for free. The secret link though is investonmainstreet.com/book. And when you go there you need to go there. And also, in the promo code area type in the name of this podcast, the Average Joe podcast, Average Joe Finances podcast, or some variant, something like that so we know it’s you and you’re not a random website. And I’ll sign it. And we’ll ship you a free copy, I’m happy to do so. I think it just tells our whole story, the ups and downs, the pivots, the lefts, the rights, and how we ended up in Hawaii, and how we ended up back in … If that helps inspire your story then it’s enough of a gift back to me. Look forward to connecting and chatting with anybody who’s interested, and thank you so much.

Mike Cavaggioni:
Patrick, absolutely awesome. Thank you so much for joining me today. This was a real treat because I got to dig in a little bit and ask some personal questions for me that I think also helps my audience out as well. But yes, so I will make sure I have all those links in the show notes as well to make sure it’s easy for everybody to find them. You can click away, copy and paste just don’t do it while you’re driving, okay? Again, Patrick, thank you so much this was fantastic.

Patrick Grimes:
Absolutely, Mike, I appreciate you having me.