Hidden Investment Gems – The Power of Litigation Finance & Uncorrelated Asset

Brian Briscoe:

Welcome to the Diary of an Apartment Investor Podcast. I’m your host Brian Briscoe with Streamline Capital. Very excited for today’s show. We’ve got Patrick Grimes with us today. And for everybody listening out there, I think Patrick’s one of the first people I met when I started jumping into multi-families. So we’ve probably known each other for a good six years now. So Patrick, welcome to the show.

Patrick Grimes:

Yeah, glad to be here. Reminiscing back at the days when we were on that Mastermind Slack channel underwriting deals together.

Brian Briscoe:

Absolutely. Yep.

Patrick Grimes:

And I met you at a conference. Man, back in the day.

Brian Briscoe:

Back in the day.

Patrick Grimes:

Yeah.

Brian Briscoe:

Now I signed up for Michael Blount coaching in November of 2018, and I don’t remember if you were at the first conference I went to or the second conference I went to. But if you were at the first conference, it’s been six plus. If you’re at the second, five and a half. But…

Patrick Grimes:

Wow.

Brian Briscoe:

Anyway, it has been a while, has been a long while. But good to have you on the show again. Very much appreciate your time and why don’t you tell us a little bit about your background and what got you into multifamily, and then we’ll start talking about the other stuff that you’re in as well.

Patrick Grimes:

Sure. Well, I started out probably many of your listeners, high paid professional. I was a mechanical engineer. I did high-tech, automation, robotics for manufacturing, mostly new product development. Places like Facebook, Google, Lockheed, Raytheon, Boeing, Johnson & Johnson, Abbott, kinds of cool stuff. I’m a geek at heart, always been there.

Patrick Grimes:

But when I asked the owner of the first machine design firm that I worked for, “Hey, where should I invest? I am making some money now.” And I was expecting him to say, “Hey, this medical device that this… We know this one,” or “Go invest in this startup,” or whatever it is. He didn’t say that actually. He said, “Take your money high-tech, put it in real estate. Diversify as much as you can as soon as you can outside of high-tech.

Patrick Grimes:

That will help build your long-term financial health that you, and wealth that you want for your family.” Because he rode this whole career, this constant wave of the ebbs and flows of the high-tech industry and the stock market. And he saw that what really was rewarding was his alternative investments. And so I learned. Learned hard though, I lost everything on the first one.

Brian Briscoe:

Yeah. Yeah, yeah. So diversification, so you went from tech into real estate. How did your first investments in real estate, I mean, how did you find the first investments and how did that progress?

Patrick Grimes:

Oh, so yeah, back then I was a snot nose engineer, really aggressive. Right?

Brian Briscoe:

Yeah.

Patrick Grimes:

Had been saving up all my bonuses, pretty successful. And so I decided to go big. I researched the highest returning deals and I thought I had done my due diligence. I had just not learned about market cycles yet. And this was back in 2007. Right? So I went heavy into a pre-development that was destined to double and triple my money and I was going to make it rich. At least I was a successful day job engineer at the time, because I lost my shorts, my shirt and everything else through two thousand nine and 10.

Brian Briscoe:

Yeah. Yeah. So you lost stuff into nine and 10, going a little bit aggressive. What got you back in?

Patrick Grimes:

Well, I was still a successful engineer. I rode that corporate ladder, got a master’s in engineering and an MBA, started a separate company where I was a little bit higher ranking and, to use military terminology, and…

Brian Briscoe:

Works.

Patrick Grimes:

I found myself looking for where to diversify. I still believed in the message of allocating into other investments that don’t ride the same market cycles. And when I started doing the research, started attending webinars, reading books, listening to podcasts, real estate kept coming back. But I started learning about how it can be done in recession resilient markets.

Patrick Grimes:

You can buy existing assets for cash flow and you can make more measured improvements that you can more calculate versus just hope on a new development and hope that the market’s not going to take a cycle. And So I started buying single family homes in Houston, renovating, refine, renting, was doing BRRRR method before I knew what BRRRR was. And it was working, was working great and it was complimenting my allocation, my other investments, and but it was brutal.

Patrick Grimes:

I was traveling all around, having a great career, really good at making money, and then my night job began to just really be a challenge for me. And so that was the real estate career. Then I met my wife and after that I realized I got to pause. So actually she was the one that, she was the reason why I took a break for two and a half years. And when I came back at it, I started going bigger, scaling apartment buildings, that kind of thing.

Brian Briscoe:

Nice, nice. And did you start actually, I mean, you talk about starting investing on your own, when did you start thinking about, “Hey, this is working for me. I’m going to invite all my friends to do this as well?”

Patrick Grimes:

So those-. I mean, I had built out some networks when I was doing single family, I don’t know, 15 years ago or maybe more. And I started working with some contractors that can help me innovate and started really building kind of a long-term strategy. But it wasn’t. When started doing multifamily, that’s when I realized, “Look, I don’t want to do all these jobs. I’m really good at engineering and analyzing, but man, I don’t want to do every job and I’m not physically in the markets that I want to work in, I want to invest in.

Patrick Grimes:

I need to find partners that are physically in these markets and I need to find people that can do the ongoing asset management that specialize and that’s what they love to do.” And I, like you Brian, we can hunt for the next deal. We can underwrite, we can talk to brokers, we can solve the complex problems of putting and structuring these deals.

Patrick Grimes:

And that’s where I felt like, at first, that’s where I felt like my sweet spot was. And so that’s where I wanted to go. That’s what I went at full bore. And instead of doing it all on my own, I started partnering up with people that were way more successful and been doing this for a lot longer. I learned a lot faster that way and that’s really what kind of got me into the space.

Brian Briscoe:

Awesome. Awesome, awesome, awesome. All right, so now you’ve done a lot of multifamily and you do more than just multifamily, more than commercial real estate. You talked about early on being this diversification. What’s your philosophy about diversifying first of all and then yeah, answer that question and then we’ll go on to other stuff. How about that?

Patrick Grimes:

Yeah. So any of our decks, you’re going to see allocations published by different institutions, strategies about how they’re wealthy, the middle class, how they allocate. You’re going to see it’s pretty consistent that around 25% allocation goes into real estate of your wealth, another 25% in alternatives.

Patrick Grimes:

As you get more wealthy, that grows actually. And then there’s a 50% kind of traditional sort of stock portfolio, bonds, treasuries, cash flow, fixed income. So the question is really, it’s very easy for people like you and I to get way over allocated into real estate. When you get very comfortable and good at something, you way over indexed in that one thing. And I’ve felt that pain before when I was all in in one thing. And so-

Brian Briscoe:

I am way over allocated in real estate right now and I recognize that. It’s one thing that I’m trying to fix as money comes in. But anyway, sorry for interrupting you. Keep going, man.

Patrick Grimes:

That’s all right. It’s a journey for everyone and that’s what we try and talk about, that sense of comfort that we get from maybe being in the stock market or maybe being in one kind of real estate in one market or wherever, that sense of comfort where we just keep doing that is actually creating a discomfort in the foundation of a portfolio. Because a portfolio needs to be able to ride the waves and the cycles of not just different geographic trends but different trends across different asset classes.

Patrick Grimes:

And so it’s important to look at other things and that’s why you’ve seen us do some energy and you’ve seen us do right now litigation funding. Because when you look at asset classes, you can be, “Well, what about medical?” Knows healthcare is steady, tried and true. What industries are there out there that you can invest into? Well, there’s oil and gas. Well, it’s super volatile, but it doesn’t trend with the real estate market.

Patrick Grimes:

It doesn’t trend with… Well, what about plumbers, right? What about attorneys? What about HVAC companies? Right? What about dentists? These are all things that are needed regardless. Education, people need up-skilling and re-skilling regardless of the market size. We call these non-correlated investment strategies. They’re non-correlated to others, or they’re cyclical, counter-cyclical I mean to others.

Patrick Grimes:

And so that way build a more, not a financially independent portfolio that’s over-hedged into one specific sandy beach that can get washed away, but like I had before, but you really build financial security, which is lots of allocations into non-correlated where if you put an investment in our litigation fund, you know that you’re lending into attorneys and that is just straight as an arrow growth industry regardless of COVID, regardless of the housing bust, the dot-com boom, it just doesn’t care. It just rides straight arrow. In fact, there’s even arguments that it is counter-cyclical because in tough times, attorneys tend to get busier, people tend to get more litigious.

Patrick Grimes:

And so those are the kinds of investments we look for and that’s why we put together these alternatives that traditionally only available and also they’re highly sought after by more sophisticated investors, hedge funds, the sovereign funds, the private equity firms that are saying, “Look, I’ve got to find these other allocations. Where do I go?” And they then invest into these and just a handful of people in our spaces even know they exist. And so that’s what we’re doing. We’re kind of bringing that institutional quality level asset class to accredited investors.

Brian Briscoe:

Yeah. To some of your points, one group I follow a lot is TIGER 21, and I listened to one of their chapter presidents and I loved how simple he made it sound. It’s not as easy, but he said most people create wealth by focusing on one thing and they keep their wealth by diversifying.

Brian Briscoe:

And that’s kind of like what I’m looking at, what I’m doing right now. I am hyper-focused on multifamily, but as deals come full cycle and I’m getting large paydays, I am looking for places to diversify. And I want to say TIGER 21, they do their quarterly reports and they’re at 25% real estate, so.

Patrick Grimes:

Yeah. Right. [inaudible 00:11:40]

Brian Briscoe:

That’s about where they hover.

Patrick Grimes:

Right?

Brian Briscoe:

Yeah.

Patrick Grimes:

27 [inaudible 00:11:43] that are non-real estate.

Brian Briscoe:

Yeah.

Patrick Grimes:

Right? So where is that? That’s what we’re helping to fulfill.

Brian Briscoe:

Yeah. Yeah. Something else that’s fascinating for me and not your point, but I like the VC. I’m very, very interested in looking at some of the venture capital funds, but… So let’s start talking about some of the other things that, I mean, you mentioned you’ve done some energy, oil and gas type investments. You’re doing this litigation fund. Let’s talk about some of the other things that you’ve done and some of the pros and cons to those specifically.

Patrick Grimes:

So we stopped doing the traditional buy a property and renovate it and increase rents to create value for said appreciation. That was sort of the strategy in the single family and it was the strategy and multi up until we saw interest rates rise and then bigger than the Great Depression. And there’s usually a downturn subsequent to that. So we saw both residential and commercial, but much more so in commercial, devaluation.

Brian Briscoe:

True.

Patrick Grimes:

At the same time, we saw banks start to struggle because interest rates remove their liquidity, struggling portfolio of loans that aren’t paying off. It’s their liquidity. So we really stepped into last year, beginning of last year, so not 2024, but 2023, in the beginning of 2023 stepped, into it saying, “Look, how do we win from the upside of this downturn?” Right?

Patrick Grimes:

And because I’ve seen it firsthand. And so we kind of stopped doing the traditional renovate value add type strategy and we said, “Look, let’s press a reset button. What is the best way to proceed in the new year?” And so for over a year now, we’ve operated two different funds that are specifically opportunistic in nature and they’re just killing it, exceeding our projections.

Patrick Grimes:

And it has to do with our pipeline of deals coming through. And as I mentioned, as an engineer, as an analyst by heart, you can see that they no longer pencil. Inflation’s hit the payroll, inflation has hit the cost of materials. Inflation has really hit the bottom line while insurance prices are growing, aside from interest rates. And with the banks not lending, it’s hard. People haven’t been able to finish their business plans. To be like, “How do we help these operators?” Because I’m not insulated from this, but we see it as well, the stress in our world. But there’s a lot of operators right now that have great performing properties. They just didn’t have the right foundation.

Brian Briscoe:

They don’t have the right debt. Yeah.

Patrick Grimes:

Debt. Maybe they just their CapEx reserves got dwindled over time. They weren’t able to execute. Maybe the eviction moratorium hit them. For whatever reason, there’s a million things that have been going wrong, it’s been a perfect storm. They got a great property, but either they need more time but they can’t get a loan or they found a great property and they want to buy it, but they can’t get a loan because the lenders are just delayed and constantly retrading.

Patrick Grimes:

Or they have a property that’s performing but they want out and it may be because of this asset or other assets in their portfolio, they need to liquidate this. And so we created two sister funds. One is an income fund, which is a real estate asset backed debt fund. So if they need or want more time, we can lend to them. And we have an originator called Pembroke Lending. And what’s really fascinating is that these same assets, commercial assets, two to six million roughly as our buy box, this sort of smaller end assets wholly unserved right now by banks and-

Brian Briscoe:

True.

Patrick Grimes:

… and lenders are just ignoring these poor guys. There’s really nowhere for them to turn. The interest rates that used to be seven, six, six, seven, eight percent are now 12, 13, 14 percent for these assets, and in some cases 16. And they’re happy to pay it and they’re happy to pay it to us because they can trust us to actually deliver to fund. We can close quickly. We don’t take three, 30 days, 60 days, 90 days, and then constantly change the terms along the way.

Patrick Grimes:

And so [inaudible 00:16:04] lending has been incredibly successful. That income fund we’ve done, we have investors can participate in short term from 90 days, six months to a year or three years. And the returns have been either fixed interest, seven, eight and a half and 10 in the short, or we’ve been distributing 14 plus monthly distributions in the three year life. It’s just amazing how you can be in a 60% loan to value debt fund and getting equity like returns for this opportunistic time. And so we did that.

Brian Briscoe:

Wow.

Patrick Grimes:

And then we said, “Well, but what if they don’t want more time? What if they need or want out and who’s going to buy these things?” So we have an acquisitions fund, which allows us to move opportunistically to buying cash assets at a good basis and build a fund through this time. And the best commercial buying opportunity of my lifetime and has now dropped, commercial real estate has now drop relatively lower than it did in 2008 and nine.

Patrick Grimes:

So this is actually the best time. As much as we can, as quick as we can refinance out, buy again, 1031 exchange. And instead of distributing when we have a sale event or a refi event, we compound the returns by buying more assets, constantly trade up, and we’ve just been killing it.

Brian Briscoe:

Nice.

Patrick Grimes:

On the returns in that fund. And so those are both opportunistic in nature and I’m really excited about those two projects.

Brian Briscoe:

Yeah, awesome. Awesome. Well, that’s pretty amazing and it’s one of these things, I saw… I think you’re one of the first people I saw. Not really, I mean, you did pivot. I was going to use say flea multi, some people have just completely fled from multifamily. But it really made me think a lot about what did I want to do. I think the writing was on the wall a couple of years ago that multifamily wasn’t going to be doing great for a while. And I think a lot of people did do something similar.

Brian Briscoe:

But what I definitely like about how you’re doing things, I love the non-correlated asset philosophy. It’s making sure that what happens to the market isn’t necessarily going to happen to everything. Because when you’re investing in the stock market, most of those things are correlated. Investing in real estate, all that’s correlated.

Brian Briscoe:

If one asset type goes down, most of them are. But love that you’re taking that more. I don’t think you used the word balanced, but I’m going to say balanced approach with your investments. Now asking, just taking this one step deeper. I mean, you talked about how the ultra wealthy are investing like this. What does your typical investor look like? Are you getting a lot of ultra wealthy? Are you getting up-and-comers or what’s that look like for you?

Patrick Grimes:

So we’ve always done, me personally, I’ve always had call it Reg D 506(c) offerings, which were accredited investors only. And our investment minimum has always been a hundred thousand dollars. That allows me to get on and talk publicly about our investments. Our average investments have been anywhere from per deal 140,000 to 200 and change. So it is true that we do have wealthy individuals.

Patrick Grimes:

I am constantly talking about balanced allocation strategies and we have our Mastery Series where I bring on new sponsors every two weeks talking about different alternative investment strategies. And I’m constantly saying, don’t put more than 5% of your wealth in one deal. Make sure that you’re spreading it out within different assets and across different assets.

Patrick Grimes:

And so I also share that with my investors. I can’t give financial advice, tax advice or legal, I’m not a financial planner, an accountant or an attorney. But for those same reasons, it tends to be those that have a little more wealth that have found themselves in the stock market and or real estate, maybe in oil and gas, but don’t have the stomach for it. Man, commodities are all, but they’re really just looking for that next allocation.

Patrick Grimes:

They’re feeling overexposed, a little insecure. Even though they feel comfortable in real estate, they’re feeling overexposed and insecure in that they see that we’re just hit a crazy hike, fast rate hike bigger than the Great Depression. Wow, our spending is out of control. And the world’s biggest economies are betting against the dollar. 11 out of the last 14 fed rate hikes ended in a bust. So they’re seeing their real estate portfolio struggling.

Patrick Grimes:

They’re seeing their equities struggle and be in a precarious right now. Probabilistically, you always need to be allocated, but especially today, most of the investors that get to that point, they really truly look at, they build the pie chart, they put in that pie chart where their wealth is, and then they put a confidence on their security. And you start really looking at that and then exposing where you feel insecure.

Patrick Grimes:

And then those are the kind of people that are looking for allocations in education, healthcare, real estate. They’re looking for these, or sorry, litigation funding, these other allocations into super stable industries, where you can put something there and you can go to sleep knowing that regardless of whether or not the market crash or the real estate crashes like it has in the past, it doesn’t, it’s like cyclic firms, you have something somewhere else that just follows the judicial process of the United States government and those returns are going to come back to you.

Brian Briscoe:

Yeah. Yeah, yeah. Now, how would you recommend that people start learning about alternative asset classes? And just kind of one step deeper. Obviously most people before moving out of the stock market into real estate, they do a lot of learning, but how do you find out about investing in attorneys or investing in the plumbers of the world?

Patrick Grimes:

Yeah. So we have a platform, passiveinvestingmastery.com and every… so this is because I was once just like many of your listeners, a high paid professional, that had no idea any of this stuff existed. So part of our mission is to help our investors build true financial security, not just by our investments, but by gaining knowledge or gaining mastery in the art of passive alternative investing. And we do that through our Mastery Series. It’s every two weeks. Every two weeks we bring on different sponsors. We’ve had precious metals, technology metals. We had mining. We had-

Brian Briscoe:

You’ve had this guy on there. Yeah, I’ve been on there. Yeah.

Patrick Grimes:

Yeah. We’ve had laundry mats, we’ve had Blockchain, Crypto. We’ve had just about every possible, Bourbon Barrel cask investing, alcohol bev investing. We’ve had oil and gas investing. So we bring, ATM machines, all, just every possible strategy that’s out there, we bring on and we bring on both sponsors that sponsor those kinds of investments. And we bring on strategists, tax people, IRA people, legal, asset protection, all the people you need on your team to be successful and all the alternatives out there that you can choose from.

Patrick Grimes:

And that’s me doing a blue ocean approach that I didn’t have when I was looking for where to invest. Because I had no knowledge of any of these strategies and nobody was pointing me towards them. I had to find my own way. And now it’s just, you know how it is, Brian, it’s just a handful of us that trade the baseball cards of alternative investments and nobody else knows about them, right?

Patrick Grimes:

So somebody’s got to get out there and show. And if they choose to invest with us, sure we sponsor deals, but they’re going to do so knowing that they’ve made a selection against all the different alternatives out there. And as they get into that space, they start seeing the different kinds of asset class. It’s just like our debt fund is just our litigation finance fund.

Patrick Grimes:

It’s just like a real estate debt fund. They’ll start seeing the similarities in the structures. They’ll start applying what they already know to other industries. They’ll become more familiar over time, and they’ll be able to start allocating and building a more secure financial future as opposed to just independence, right? In your IRA account or independence in your one investment strategy. So that’s what I suggest people do.

Brian Briscoe:

Yeah. And it’s what I’m doing in a lot of ways too. Now, my philosophy is I’m trying to learn one thing at a time. So I think I’m pretty good at real estate investing. Yeah, but I’m starting to go to a lot of events that are tech investored. Big tech scene in Salt Lake, but starting to go to a lot of these events where there are deal pitches and things like that so I can learn that industry.

Brian Briscoe:

But yeah, my goal is to kind of learn one at a time and then just start branching out. But yeah, I love your investor series. Something else that really resonated, and it was a while ago, you said this, when I approach investors, same as you, you said you recommend nobody put in more than 5% their net worth, but I show them a lot of times the TIGER 21 allocation and say, “Hey, 25% of your allocation should be into real estate.” And then of course I try to be, gobble up as much of that 25% as I can is my goal, but…

Patrick Grimes:

Yeah.

Brian Briscoe:

Yeah. So alternative assets, awesome. So what did we miss? What have we not talked about yet that needs to be said?

Patrick Grimes:

Well, can we talk a little bit, we educate a lot on litigation finance, and I’d love to share a little bit about it, if that’s okay.

Brian Briscoe:

Let’s do it.

Patrick Grimes:

Before the call, I think so I was-

Brian Briscoe:

Yeah.

Patrick Grimes:

It’s pretty cool the actual underlying investment, right? Because just like in real estate, how you’re ultimately providing housing to tenants, right?

Brian Briscoe:

Yeah.

Patrick Grimes:

Which is cool, there are harmed individuals out there that were typically in our case, harmed by a large organization or corporation that the harmed individuals don’t have the money to defend themselves or to seek justice, sorry, to seek justice. Right? And they’re up against this big Goliath out there. And there’s these attorneys that are willing to work under a contingency basis and essentially take all these harmed individuals that… right?

Patrick Grimes:

And help go against the Goliath. But it’s expensive for them and they need people to partner with even when it’s a sure case. We were talking about how we’re heavily involved right now in the Camp Lejeune water contamination. I mean, for 17 years the government fed our military and civilian and their families contaminated water. I had a Marine base where people went to go train for war, and I know you were stationed down the road from there.

Brian Briscoe:

Yep. Yeah. I’ve drunk Camp Lejeune water before, but few and far between, so I’m pretty sure I wouldn’t be eligible. But yeah, that one’s near and dear to my heart. Now are these the same thing as class action lawsuits or do they start not as a class action? I’m not even sure where that goes there, but.

Patrick Grimes:

Yeah. And so wait, first, so it’s also near and dear to me. I was born at a military based in Italy, right? And it could have Air Force base, it could have very well have been my family and me, right?

Brian Briscoe:

Yeah.

Patrick Grimes:

Exposed. And I have two apartment buildings right next to Camp Lejeune. So it’s like, oh gosh, those are military people, but. So it is, it’s a small world. But no, they’re not class action, actually. We don’t like class action because class action doesn’t provide meaningful settlements. And part of what we want to do is we don’t want to be… Class action often time, you probably somehow got involved in one and maybe you got 75 bucks from LensCrafters or 50 bucks from RadioShack or something. Who knows? It’s really meaningless to the claimants we’re looking at.

Brian Briscoe:

Or from tenant screening report settlement fund. Yeah, I got $85 from them last week. Yeah.

Patrick Grimes:

Yeah, nothing. And so it really is not going to change their life. We’re actually providing real settlements to people that were injured that can change their life. And that is more what they call mass tort. And it’s just the word for meaning a mass amount of people were harmed. “Tortum” in Latin means harm or injustice. So when a lot of people had a harm or injustice done to them, they’re allowed to seek justice through the legal system, through the courts.

Patrick Grimes:

Well, that’s what litigation is, is seeking justice through the courts. And so that’s where we’re interested. And it’s not one lawsuit like a class action where you’re in one lawsuit, each of the independent people on the docket, so we’re leaning to attorneys that are representing thousands of people that were harmed at Camp Lejeune.

Patrick Grimes:

And those are all individual lawsuits, and each one of those can get 100, 200, 400 thousand dollars each. And we’ll help to help the attorneys find more similarly harmed individuals to acquire those clients, right? And add them to what they call their docket, right? Or we’ll help those attorneys support the costs, their hourly rates, court fees, filing fees to get them across the finish line to settlement.

Patrick Grimes:

And when it’s very late stage, like in the case of Camp Lejeune that there was a bipartisan piece of legislation passed saying that the DOJ was caused it and they’re reliable for it, they actually put an early settlement grid together saying, “Based on how long you were there and what your injury was, here’s your settlement.” And they said, “Here’s the justice fund we’re going to use to pay those settlements. People can settle today.”

Patrick Grimes:

At this point, it’s a very safe bet comparatively because you can literally, you can take these people and they can just settle today. And so it’s easy to underwrite the payout. Right? Some of them like that. The ones we’re interested in, causality and liability, pretty much the defendant is now looking at what are they going to settle for. And it is the case that people come to me and like, “Well, what happens if you lose?” Well, we’re not involved super early when there’s a loss potential, a high loss potential. And if there was, you’d potentially have a much higher return just like if you were in a angel investment.

Brian Briscoe:

It is risk versus reward. Yeah, exactly.

Patrick Grimes:

Or a oil and gas wildcat deal. You can make a 30X return. Or like me, when I was doing a pre-development, I was looking for a huge deterrent. But if you’re very late stage where, “Hey, we’re through the courts, they’re settling,” it’s actually 90% of civil cases settle. So it’s not the case that a lot of these things, and a lot of times the insurance companies force that, right?

Patrick Grimes:

So it’s not the case that there’s a high probability of loss regardless. But even so, we’re late stage, we get a reasonable return, 20, 30 IRR as opposed to 30X, right? And there’s a big total loss potential. But between the ones for the government, Camp Lejeune, also the military and civilian firefighters were involved in that one where the firefighter foam that was used, 3M actually said, 3M Bair actually or DuPont 3M said you could actually eat this stuff.

Patrick Grimes:

Turns out it’s a forever criminal, a PFAS, this foam they use on fires. And as it turns out, when it gets superheated, it becomes incredibly toxic. And so now they’re suffering from non-Hodgkin lymphoma. And so we’re working on getting cases like that through a couple partnerships. And also Roundup, Roundup Weed Killer Monsanto now Bayer said they even had falsified reports that are since been retracted by the EPA saying it was healthy and these landscapers and farmers are now having horrific diseases and they’ve been settling these.

Patrick Grimes:

And so we can help our attorneys find more similarly harmed and help pay to get them across the finish line. And you can provide that access to justice and you can get a preferred position. The claimant gets paid out first. We get meaningful settlements, usually 50 or 60 percent. And then we only get involved in cases in which that leftover part, that contingency fee can then, with our borrower, can then pay off the investors, pay a reasonable kind of waterfall split, and then give back the attorneys the upside they’re looking for.

Brian Briscoe:

Nice. Nice. So to mitigate the risk in this, you’re doing the late stage where it’s all but done and you’re just taking that last little piece across the finish line? All right. Well, that sounds pretty interesting. We are about time where I usually like to wrap up, so we’re going to start doing that. So one question for you, and we’re going back to your real estate roots for this question. It is an apartment investing podcast overall.

Patrick Grimes:

Right.

Brian Briscoe:

After all, overall, after all. So how about this, what advice would you give to somebody who is looking to get into real estate investing as an operator, a capital raiser like us?

Patrick Grimes:

It’s a multi-step process, right? Just because the first thing you got to do is you got to educate, you got to learn, and you want to surround yourself with the right kind of people. So I run every morning to podcasts. I call that passive education where every morning podcasts, TED talks, audiobooks, I’m learning about something new every morning.

Patrick Grimes:

But then when I started out, once a month, I would force myself to get to some kind of event like a meetup group or where I’m surrounding myself, building a tribe, building a group of people that think differently, that have succeeded at doing these things. That’s how I met you, Brian.

Brian Briscoe:

Yeah.

Patrick Grimes:

And that can start to shift my mentality. You are the sum of the people you hang out with. So take passive steps every day, take active steps at least once a month, if not two or three times a month to get physically nearby and surrounding yourself with those people.

Patrick Grimes:

And then learn how to partner. And I think that’s what I did wrong for a lot of years is I thought, “Well man, I’m such a good engineer.” And I get the same thing with lawyers. I get the same thing with doctors. I can do this too. And man, they don’t remember what it was like when they were studying for the bar. They don’t remember what it was like when they were going through med school.

Patrick Grimes:

It’s brutal. And you’re competing against these other people that this is their full-time gig, right? And they’ve been in there forever. So partnering up was certainly taking less of the deal myself, finding people that know how to do it, and finding my complementing skills and figuring out how to stitch together a team, that was really good for me to get into the space.

Brian Briscoe:

Yeah, love that process. Last question, how can people learn more about you?

Patrick Grimes:

Yeah. So I’d be happy to offer a copy of, a free copy of my book that I contributed towards if you’d like, Brian.

Brian Briscoe:

Yeah.

Patrick Grimes:

To listeners. All right. But make sure that you put Brian’s name or the name of this podcast, but go to passiveinvestingmastery.com/book. That’s the secret link. Passiveinvestingmastery.com/book. The book is called “Persistence, Pivots and Game Changers.” It did make an Amazon number one bestseller.

Brian Briscoe:

Nice.

Patrick Grimes:

Turning Challenges Into Opportunities. This is Phil Collens, lead guitarist of Def Leppard. There’s the engineering geek me in the middle there. And then there’s some real estate, NFL, MBA players, entrepreneurs. It was just such an amazing book. I wrote a chapter. I told my whole story about losing it all and coming back in and all the ebbs and flows and it’s just such a cool book. I’ve got a lot of feedback. It helped inspire people on their journeys.

Patrick Grimes:

Because I broke free of engineering. Right? I mean, I still love it, but I found things that are more fulfilling for me and my family’s future. And so I’d be happy. I sign them and I send them out. Because as long as you put where you came from because we get a lot of random forms getting filled out and we don’t know who those people are. So maybe set up a call at Passiveinvestingmastery.com.

Patrick Grimes:

You’re going to see our three investments, our income debt fund, our acquisitions fund, all exceeding our projected returns by a long shot and our diversified litigation portfolio, diversified litigation portfolio. And you set up a call regardless of where you’re at, even if you’re not accredited, happy to talk to you. It’s one of the things that I love to do in this world is invest back into other people because I was once kind of lost in my day job not knowing of it. And so happy to participate, get you pointed in the right direction. Set up a call, and let’s have a chat.

Brian Briscoe:

Awesome. Sounds good. And we’ll put a link to that in the show notes. And I’m going to get my autographed copy of the book as well, stick it on my shelf and show it to everybody when they come in the house. But there we go.

Patrick Grimes:

[inaudible 00:37:00]

Brian Briscoe:

Awesome. Right.

Patrick Grimes:

Oh.

Brian Briscoe:

Go ahead.

Patrick Grimes:

Don’t forget to join my Mastery Series too. I forgot to say that. That is the series right there on the homepage that every two weeks it’s a different alternative investment or a different investment strategy or a new team member potentially that you need, you didn’t realize you had to help propel you into success in alternative investing. So the Alternative Investing Mastery series. Sorry about that, don’t forget to register for that.

Brian Briscoe:

No worries. Awesome. Awesome. And you said that was also on your website, right? Okay, cool. So Passiveinvestingmastery.com, that’s where you go to get everything you need. And Patrick, thanks for coming on the show today. Very much appreciate your time.

Patrick Grimes:

Glad to be here. Thanks, Brian.

Brian Briscoe:

Sweet. All right.