Patrick Featured on The Accelerated Real Estate Investor Podcast by Josh Cantwell

Audio Only: Patrick Featured on The Accelerated Real Estate Investor Podcast By Josh Cantwell

by Patrick Grimes | Josh Cantwell


Josh Cantwell:
Hey there, guys. Welcome back. This is Josh, host of Accelerated Real Estate Investor. I have a treat for you today. I have to tell you that, no disrespect to all of my other guests, because a lot of them are really dynamic and really good, this interview today I have for you is one of my favorites. My guest today is a fellow named Patrick Grimes. He’s the CEO and general partner in over 3000 units. His company is called Invest on Main They invest in the Southeast, as well as some markets in the Midwest, and specifically in Texas.
You are going to learn on this show some amazing, amazing things, but in particular, you’re going to learn eight specific criteria that Patrick feels is the absolute must have criteria to buy multifamily in today’s market. The rest of the show is amazing, but I’m going to tell you that that one part, the eight specific criteria that you need when you’re buying a multifamily asset in this market, I’m going to tell you that that part of this show is phenomenal. It’s one of my favorites. It’s about a three to five minute segment of this show that I would put on replay. I would listen to it over and over. I would write it down, and I would make sure that all of my investments in today’s market meet this criteria. You’re going to love it. This is a fantastic interview today with Patrick. Here we go.
Hey, Patrick, listen, so excited to have you on Accelerated Real Estate Investor. Thanks for covering out some time.

Patrick Grimes:
Josh, I’m excited about it. What a cool show. I feel like I’ve come full circle to be on your show and to be out there and getting my name out there. Appreciate the opportunity.

Josh Cantwell:
A lot of guys use podcasts and social marketing and things like that to build a portfolio. You guys have built a massive portfolio and you’re finally getting your message out. We’re excited to share that message with our audience. As our audience gets to know you today, Patrick, what I’d love for you to start with is just to tell our audience something that you’re working on right now that you’re excited about. You obviously have your book, New York Times best seller. I know you have a deal that you’re working on right now. Just tell us a little bit about what today, or next week, or next month looks like. What are you working on that gets you going?

Patrick Grimes:
Yeah, well, Invest on Main Street, we’re killing it. We’ve got 300 million in management. We have 3,000 multifamily units across the Southeast and Texas. We’re working on that portfolio. We’re building that portfolio. We’re bringing on more passive investors. We’re doing it in a way which allows for us to win in a down economy. We talk about my story a little bit, but I actually lost a lot in the ’07 downturn. I’ve been fortifying my deals, waiting for an opportunity to start getting some discounts. We’re seeing that now. I actually think our company right now is experiencing multiple discounts consecutively on deals before we take them down. If this window is not going to last forever where we can snatch those up, happy to bring whatever investors are out there that want to start enjoying those returns. That’s what we’re working on, is trying to bring on more individuals to partner with.

Josh Cantwell:
I love it. When you say multiple discounts, we’re talking about re-trade, price difference through the due diligence process. Explain that. Give us a real example of what that’s like, because a lot of people are like, “Oh my God, you’re actually re-trading a deal? You’re getting a discount? What is that?” Because people are so used to overpaying over lists, with big earnest money deposits. The market’s shifting. Give us a little bit more context around that.

Patrick Grimes:
Well, finding deals has always been brutal for an organization like myself. Working with our partners, we underwrite 200 to 300 deals before we find one. Underwrite means locate, find, and analyze and project. It’s always been tough because we’re extremely low leverage, which means high down payments. We raise a bunch of capital for improvements, so it’s hard to get those to provide returns that are attractive and still be high cash flowing enough to weather a storm.

When I say multiple, I got up at 5:30, or 4:30 AM for a webinar to record at 5:30 AM this morning with some of my partners on the east coast. We’re all flying around into properties this week so we did a recording. What we were talking about is, we went into this investment that we’re kicking off the raise for right now with over 2 million from the asking. It was a pocket listing from a broker, off market deal. But we went under, almost 3 million below where he was looking for. We just let that ship sail. You know what? It came right back to us, but when it came back to us, we looked at it again and we said, “No, we’re not going to go forward unless we get another over 2 million discount.”

We’re walking into the door here to this property, 4 million. It is a 300 unit property in San Antonio, under. Then when we arrived, we realized that the distressed operator was distressed because there was a unit that had burned down shortly after he owned it and he wasn’t properly insured and didn’t have the reserves. You add the forced physical vacancy to that, plus delinquency during COVID, and he got distressed. The discount is buying not only below market, but also immediately we’re going to finish this building and lease up 16 units, which had not been producing income, fixed the delinquencies immediately. It’s incredible the upside on some of these value add deals we’re finding. Normally it would be much harder to get those discounts because in a seller’s market, it’s much harder to re-trade or negotiate.

Josh Cantwell:
Patrick, how do you feel like brokers and the players in this business are responding to that? Because everybody’s learning almost on a daily basis about valuation change. Things are changing. Buyers are adjusting price. Deals aren’t as competitive necessarily with so many offers upfront, or there’re offers, but they’re coming back because those buyers can’t close. So because you and I have so much experience in this, I’m just curious to hear for my own selfish reasons, how are brokers responding now to these price discounts, re-trades, are they open to it? Are they realizing… obviously these guys want to transact. They want to make a commission. How are they responding?

Patrick Grimes:
Prior to say, COVID, re-trade was kind of a bad word. Nobody wanted to re-trade. Once you submit an [inaudible 00:06:27] or a PSA and you did your due diligence, you were kind of on the hook and sellers where they wouldn’t… and you would have to kind of drop out before you went hard earnest in. But nowadays, at the true heart of brokers, in my opinion, is they’re really transactional. They just want volume. They want volume transaction, but in order for them to do that, it’s relationships, relationships with the seller, and relationships with the buyer. If they falter and choose the wrong buyer for the seller and steer the seller in the wrong direction, once maybe that seller will give them another shot. Sometimes twice. That seller’s moving on. That’s a problem, because that seller usually represents a lot of business.

Normally they’re coming to really strong players that have decades experience and a track record of closing and then have large reserves and the ability to take properties down quickly. They’re coming to us because they know we’re going to close. They know we’re not going to piss off their buyer. We’re not going to re-trade. But in this economy, ultimately they just need volume. When the volume, the transactional volume is dropping, they’re having to step up to the plate a lot and help us out with the owners and be like, “Hey, look, we’ve got to make this deal happen.” We’ve been playing hardball, “Hey, this is what we can do.” But the sellers are much more, “I get it. It’s happening everywhere. Let’s figure this out. Nobody walk away from the table,” and we get through it.

You know what? You show exactly how the numbers work out, which is exactly what we identified and what will allow us to move forward, and we have not lost any reputation overdoing that this time. Usually we start out low, but starting out low and then trading down from there is a really awesome place to be. I only think that’s going to last another three to six months while we’re in this inflection period where there’s some fear in the market, but we’re already seeing interest rates, inflation’s already started to taper, the fed’s doing a good job. I think we’re in a good spot right now to get some great deals as long as everybody stays scared. Stay scared everybody.

Josh Cantwell:
Yeah, no doubt. I love it. The interesting thing is I had a conversation with my lender broker the other day, and we were talking about the 10 year treasury. 10 year treasury jumped up to 3.4. Obviously interest rates jumped up in the middle fives, and now 10 year treasury is back down. We’re having a conversation about it. He said, “Look bad news for the US economy, good news for us.” Bad news for economy because people in a time of fear, they’re going to run to safety. Safety is US government treasuries. That’s why the rate goes down, because there’s a lot of demand. When that happens, our cost of money goes down. Typically cap rates will come down, values will go up.

You have to just be in this inflection period, like Patrick said, you have to be smart and you still have to make sure that you’re a long term investor. Patrick, I feel like the people that are going to have trouble, where there’s going to be some opportunity to buy, that’s going to happen in the next two to four years, are those guys that did high leverage bridge loans, sofa rates, and that stuff is going to, it’s going to change. The rate’s going to float, if the rate goes up. But also those people who thought, they had the dopamine rush of buying the asset, not really getting into it to manage the asset. So where do you think as you project over the next, maybe one to two or three, four years, is that where you’re seeing this stress also? Is that where you’re counting, and where do you think some more deal flows going to come from?

Patrick Grimes:
Well, you said a lot. You packed up a lot of really great stuff and I resonate with all that. I going to probably try, if I can remember all of it… Well, first of all right, the fix and flipper single family, or fix and flipper multifamily, they’re still fixed and flippers if they’re short term thinkers, and multifamily, and that is the last place you want to be. Not all operators are created equal and not a lot of them have been through a downturn. I think you want to ask me about that in a minute, and they don’t understand how the economic models can change and how the demand can shift and how things can break down.

You’ve got to be very long term, and we’re either buying interest rate caps with long extensions or we’re getting fixed interest rates. We’re getting large down payments, which allow us to cash flow below a 70% break even occupancy. Well, in the downturn, it hasn’t dropped that low in workforce housing B and C class multifamily. You got to build and raise six months worth in reserves and a million dollars and put it in a bank for a rainy day just in case. You’ve got to fortify these so that their long term focus and short term valuation fluctuations aren’t so worrisome to us.

That’s the point. We’re not short termers. We’re long timers. We’re fortifying these guys. Strong cash flow. I think you said was about the fundamentals of multifamily are very, very strong. Nationally we’re at some record occupancies right now. I mean, what is that? Well, first in a macro sense, becoming a renter nation. They’re wanting to rent more and more. There is a huge under serving of housing in the country, and we’re buying in the emerging markets where people are moving to, jobs are created, income is growing, and especially in those areas where we just did a deal in Austin, where we have 180 people moving to town a day and they’re only bringing on 100 units a day for them to live in, and that’s single family and multi.

But if you’re in affordable housing, those B and C class, a 20 to 40 year old, they can’t build new ones to compete with you. If you buy in those areas, there’s a competitive moat between all the new construction that’ll come up, and in a downturn, they’ll move into our lower cost housing unit. The reality is, I agree 100% with, as long as you fortified it with the right kind of foundational debt product long term, you’ve got the right kind of asset and the right market and the right workforce housing type of setup, it’s going to be hard to go wrong. And if you consider income generating real estate to be a great inflation hedge, I mean our revenue is our rent and that’s going up with inflation. Well sure, our expenses due too, but our expenses are only half our revenue.

Oftentimes our return going north, so people fearing, putting their money in the bank account. Well they’re losing 8 to 10% right now. They’ve curved it a little bit. Whereas our investors are enjoying those increases. San Antonio just had a 15% rent increase this year, and we’ve had this under contract for awhile now. We’re enjoying that, and investors haven’t even invested yet, but once they invest, they’ll have bought into an asset which is already appreciating while they sleep and while they’ve slept the last couple months, whereas if you’ve just had your funds just sitting in a bank account, it’s going to be a Saturday.

Josh Cantwell:
Yep. It’s going to be… absolutely. At this point more and more of our investors are having conversations with Patrick as, not just how much return I can make, what’s my pref return, what’s my equity position, what’s my IRR, what’s my annualized return, more and more I’m having the conversation of, “Well, where else can you go to get a six or an eight profit or even some cases, a 10 profit, but just call it six or eight and just keep up?” A lot of people are like, “Well, I don’t know.” The bank is not paying much. Crypto has gotten crushed. Where else are you going to go to get any kind of yield and cash flow return on investment they could just keep up? Then your equity position is, it’s kind of the icing on top of the cake. That’s more of the conversation that we’re having lately. I’m sure you guys are having those same kind of conversations.

Patrick Grimes:
All the time. Right now it’s the year of the operators. You said, it’s the strong operators that know how to buy a value add, something that’s distressed or under market, that knows how to get in there, that knows how to tell the difference between, hey, how do we increase the value of this to the market? And then raise those rents. That’s the only way you can cash flow to those numbers. You can’t just buy an A class property that doesn’t need any work. You’re going to be cash flowing in 2 or 3%, maybe 4. But if you buy a low leverage safe asset that an operator that knows how to get in there, do the work of renovating the units, bring the rents up 200, $300 to the nearby comparables and can find those needles in a haystack, we’re returning on some of our assets, 4% in year one, 6% in year two, 7-8% in year three. In addition to that, we’re doing refinances of half to three quarters of their capital back out in that third year, because we’ve created that value.

By doing that, it’s all tax deferred and you get not only the returns that they’re looking for, but you get it at an depreciating asset where Uncle Sam doesn’t come knocking at your door. It really is the year of that operator that knows how to find those deals and can operate those deals. You mentioned before something about, well, the operators that we’ve seen, we had a 19% bad debt in an asset that we just took down in Houston. The guy was terrible. He just bought it and forgot the tenants are living there. Part of our ethos and our mission is actually to not only provide great returns for our investors, but an improved living experience, cleaner and safer place to live for our residents.

It was a stick of a ream of paper that we printed of just unanswered maintenance requests. This guy had, 19% of the people chose not to pay him. That’s what would bring you down, right? You’ve got to stay focused. We’re a service industry. It can be a win-win for everybody. It takes that operator with this skill to create that environment for the residents to be happy enough and be service oriented to the residents for them to pay you when they can choose not to through what might be a recession.

Josh Cantwell:
Patrick, I’m curious, do you guys self-manage or use third-party? Regardless of whether you use self or use third-party, what do you do to asset manage the property manager to make sure that you’re not having any kind of delinquency like that, that evictions are filed on time? To me, this is operation. This is being a good operator. What are some things that are really important to you or that you would pass back to our audience that they need to be doing to be really good at operations and asset management? Regardless of whether they’re self-managing property management or outsourcing, what are some things you do that are that nitty gritty, dirty stuff that makes it work?

Patrick Grimes:
There’s a lot. You kind of open up a big can of worms. What makes it work? As soon as we get into a property, pretty much the immediate thing we do is we notify our residents that we have new leadership in town. We ask them to republish any unanswered maintenance requests, and we publish a schedule for how we’re going to fix those, and a timeline for it because oftentimes there’s pest issues, there’s leak issues, there’s things that we’ve uncovered doing due diligence, there’s mold issues, those kinds of things that we need to get through. We also make it very clear right up front that we’re going to be fixing the amenities, and we want it to be safer so we immediately put up security cameras and we fix the fencing. Part of that is making sure we’re controlling access to the right kind of people and the right kind of visitors to a property, and trying to figure out which ones are all night long, moving in and out and figuring out which tenants are the right.

Once you start seeing us re qualify tenants based on income, credit, and references as they come in and start to do unit inspections, you can quickly see who are the problem makers, who are the individuals we need to start getting out? Once tenants start seeing that, you are actually doing 24 hour responses to maintenance requests, and then you’re immediately following up, and that’s not expensive. Those are very inexpensive callers to immediately follow up, to see did they resolve the issue? So you’ve reduced response times and then followed up. That’s challenging.

I’d say probably the hardest part about operations is that you have what are traditionally lower income jobs controlling the happiness and livelihood of your residents. That’s your maintenance and leasing and all that, but they’re also controlling a multimillion dollar business. We’ve actually increased the payroll. You asked me if we’re vertically integrated. I used to be a big third-party management guy prior to COVID, although probably 2/3 of our portfolio is vertically integrated. But when we went through COVID and we had control, a reporting structure all the way down to the door, where we could knock on the doors, we could inquire what’s going on, we could help them fill out the applications. There was none of this pointing of whose job it is. They didn’t have a profit center between you and your revenue generator, property manager. I think that’s when it became really important to have the vertically integrated property management, because then we had that control.

It’s not profitable for a private equity firm to run property managers. It’s a huge hassle and a long journey and a thankless job and one of the reasons I moved out of single family, but it serves the residents better because you can build a service oriented community. You can also, it serves the investors better because you have greater control, especially in a potential downturn or a shaky area where delinquencies are a little more common.

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Josh Cantwell:
Fantastic feedback. We could take this call down a thousand different ways. Some of the things you mentioned, amenities, safer, fencing, security, increasing the payroll, paying a little bit better, the reporting all the way down. One of my favorite things to do is to secret shop my property. I like to show up unannounced to everybody, residents, staff, construction guys, property management, just show up and start walking into buildings and just see what you see. Then course correct if something’s off.

It’s also very satisfying when you walk into your buildings and the hallways are clean, it smells nice, the cleanings are done properly, there’s people moving in and out, the common spaces are done, the public spaces are good, the amenities are being used, and you’re walking through this asset thinking, oh God, this is amazing. I own this $20-30 million asset and nobody knows me any different than just the resident. I’m seeing what I would want to see if I was a resident. That’s really critical.

Patrick Grimes:
100%. It’s interesting you say that, because I’m actually speaking at a billion dollar boardroom in Mexico with some mastermind. I’m flying from Orange County there, but I found a flight that has a six hour layover in Dallas. I’m going to fly there and I’m going to Uber around to different properties and do exactly what you just said, and then I’m going to fly and arrive late night, but that is 100% exactly what you need to do.

Josh Cantwell:
Yeah, absolutely. I love it. Patrick, you mentioned, we talked about recession. We talked about inflation. We talked about, you mentioned low leverage many times. I’m just curious if we could go back to that a little bit and talk about your money making strategy and be a little bit more specific about some of the bullets that you think is an ideal deal to buy in today’s market. B,C class, you mentioned, so add that to the list. Low leverage. Recruit more money. You mentioned that. What are some of those things? Let’s just go revisit that real quick.

Patrick Grimes:

Josh Cantwell:
But if you were buying an asset or coaching somebody or masterminding with somebody to buy the right asset in today’s market, what do you think are those characteristics that it’s got to have?

Patrick Grimes:
Yeah, and this is a great… because unpacking this leads me back to my original story of how I rode down the ’07 downturn, ’08 downturn in residential pre-development because I learned a lot through that process and that has stuck with me. I’ve always thought that the very next year was going to be the end and the end and the end of the bubble. I’ve always had that in the back. In fact, every single one of our decks says this was underwritten with forecasts similar to what happened in ’08, ’09, and ’10, versus ’11 through ’15.

Essentially there’s a couple things. You need to be buying in the right markets. If you’re going to set up shop in a business, it needs to be somewhere where the government likes you. There’s very little, we call legislative risk. It’s landlord friendly and they have good tax laws, not only for you, but they’re friendly to businesses because ultimately we’re housing America and businesses are going to pay the people that pay you. You need to have businesses which are diversified, recession resilient businesses. We always look for not a one hit wonder like a mining town or in Detroit or a Vegas that are highly leveraged in one particular vertical, we look for ones that are a balance of high tech, healthcare, financial services, education. Those where there’s a balance and with heavily weighted in recession resilience.

You want to find population, job, and income growth, but you want to find all of those in a diversified employment base. What you do, and then when you add the landlord friendly component to it, that means you’ll be able to maintain revenue. It’s stable. You can evict people if you need to. They’ll allow you to permit to make the improvements you need. You’ll actually be able to execute on your business plan.

Why in California would I set up shop here when every single thing I just said is untrue? Obviously I’m investing in the Southeastern states and Texas, maybe a little bit in a couple Midwest locations, but within those cities, you want to make sure you’re on the expansion curve, which is what we talked about, not the hyper supply or recession or recovery, but the expansion curve. Within those markets, you got to find where the path of progress is. That path of progress is my word for where are the assets which need improvement? Because again, I don’t buy high end A class stuff because the AA prime downtown new construction, it’s the most expensive cost structure to build. It’s built on the codes of today, and there’s a huge gap between their price per door and ours, which means we can renovate to look like those and have those amenities, but we can charge way lower rents.

You see in the class A side, during recessions, they get hit fastest because people are choosing to live there. There’s only a few of these existing construction, 20 to 50 year old buildings that we can find that are lower costs, so we get compression. Now, you don’t want to be in D class during a recession either, because especially in an inflationary environment and when their disposable income is just hair thin, that’s going to have the quickest impact on your rent. We’re in like B, B+, repositioning or improving to be more like Bs or B assets, or sometimes in the right neighborhood we’re in a B asset where we can really compete with the As. That’s where we’re at.

As long as you can find an area where you see some new developments, you see some big box retail, some new commercial stuff coming up and you see comparables in those multifamily buildings which are much higher, say 200 to 300, and you can find that ugly house, that ugly apartment building that somebody’s been sitting on for 5 to 15 years. They’ve just been riding it out. They need renovations. We can get it either pocket listing or off market. That’s what we do, and we buy it and we just execute on those plans.

Josh Cantwell:
Love it. Love it. Love it. Love it. That was great. That three minute description, Patrick is one of the best I’ve heard…

Patrick Grimes:
Oh great. Thanks.

Josh Cantwell:
… in a long time. I’ve done 470 shows. That was legit legit right there. My audience, hit rewind, and then go listen to that three to five minutes again. That was fantastic, Patrick. Let’s talk about real quick. Now, you have this model you just described, but you haven’t always been there. You talked about the ’08, ’09 crash. You invested through that, learned a lot of lessons from it. My audience loves to hear the start, the story of how people get going, because some of our audience is exactly there right now. They’re just getting started. What did your start look like? You said you were in rezi, you pivoted over to commercial apartments. How did you get started? What were some of the early challenges?

Patrick Grimes:
Well, at the end I’m going to offer a copy of this book where I really get into the dirty, nitty gritty, which is why I think what you’re looking, the juicy stuff. I actually got a bachelor’s degree in engineering, machine design. I’m a little bit of a data analytical nut and I love it. Machine design, automation, robotics, I’m a huge geek and I stuck true to that my whole life. I’m still a geek today. The first automation house that I worked for, the owner of the company and I had gotten real close to him and we’d done some really cool projects. I do work with solar cells and rockets and Tesla and really neat stuff, and a lot of medical device, too. COVID, assembly test kits was really big. I did this, and I’m full-time real estate now, but my heart is still a little bit of an engineer.

This guy said, “Look, I get it. You love it. I do too, but high tech stocks, your 401k, your IRA, none of that is going to get you, in this volatile industry, is going to get you to where you want to be with your family and your future. As soon as you can, and as much as you can, invest in real estate. I was like, “All right, I’ll go do it.”

That guy still invests with me today, by the way, which is really awesome. He is one of my good friends and I call him out in the book. So then I look for the highest returning deal I can find. I did pay attention to track record of the sponsor, but I went for more speculative. I went for residential pre development, and I personally guaranteed the loans and recourse states, meaning, which I didn’t really have a full understanding, but I was buying property to then future build on it, develop and build on it. That was the intention.

Well then that was actually borderline ’06, ’07, and then ’08, ’09, ’10 happened and everything crashed. That’s when I learned a difference between speculating and investing, and calculated risk, a risk adjusted return, meaning a great return for the level of risk. I learned what fully recourse was and how that meant they could come after you, and I learned what bankruptcy was, which I was able to avoid, but foreclosure and negotiating debt forgiveness through the lender meant that the government 1099’d me for the forgiveness, and I had to pay income taxes in the following year on that forgiveness.

I came crawling out of that just burnt, bruised, and beat. Just painful. There you go. There’s the nitty gritty. But then I went and got the masters in engineering and a masters in business administration. I was off to the races again doing well with the voice in the back of my head, “You got to get back into real estate. You got to,” because obviously I was just putting money in stocks and just, I’d watch my stocks fall apart too, at the same time. It wasn’t just housing. That was the biggest episode of fraud in this country’s history, not a real estate bubble. It was a regulatory fraud problem in the financial infrastructure of our country.

Josh Cantwell:
Assets and all those adjustable rate mortgages giving them up, no income, no asset, people with no jobs, and you still rate them through standard [inaudible 00:30:42], Moody’s, Dun & Bradstreet, S&P plus package, commercial mortgage backed security. That’s fraud. That’s exactly what Patrick’s talking about. That is fraud to the Neth degree and people bought it because it was still labeled as AAA rated. The ultimate fraud right there. Those mortgages don’t get sold. They don’t get created unless they can be rated AAA, and they were, and it was completely fraudulent. Everybody knew it. At least we found out after the fact, people that were rating it knew it.
So you decide to go back to school, get the degree, but you’ve still got this bird chirping in the back of your mind saying, “Get back into real estate. Get back into real estate.” But you were going to do it differently this time. This is where I want to ask you, Patrick, about advice. I know it’s in the book, so first of all, tell us about the book. Where can they find it? What’s the name and what are some pieces of advice now that you have these 3000 units, this massive portfolio, you’ve been through the tough times of the ’07, ’08 crash. What’s in the book? What are they going to learn when they read it, and what kind of advice comes out of it?

Patrick Grimes:
The book is called Persistence, Pivots and Game Changers, Turning Challenges Into Opportunities. I’m on here wearing a wig. Just kidding. I had hair not too long ago. It was my wife’s idea to shave it off. Now I’m not allowed to shave the beard though, because the hair is gone. We’ve got some really cool people, Russel Gray from the Real Estate Guy, Phil Collins, lead guitarist of the Def Leppard, some NFL, NBA, entrepreneurs, coaches and players. Oh, and I wrote a chapter… Every story in here is just totally life changing. I really believe in the content.

Where can they get it? I actually am offering a free copy if they want to go to our website, set up a call. I’d love to meet people, talk about what your goals, what you’re doing, and I’ll ship you a free signed copy of it if you’d like. Otherwise it’s on Amazon and it did make an Amazon number one best seller. Up to you on that one, but…

Josh Cantwell:
Very cool.

Patrick Grimes:
So to your point, the advice that I would give is, actually what I did after that was I was like, okay, I’m going to do this real estate game and I’m going to do a single family, all my own money. I’m going to do all the jobs myself. Then I realized that it was working. I was buying in recession resilient markets in Houston, actually that leveled off in the downturn and went up again. I was buying distressed, renovating, refining out my capital, and then holding. I was a hold investor, and every single time I did one, it was a ton of work and I was signing on loans, which meant it was on my personal… it was recourse again, but it was measurable. It was an income producing asset on day one. I was just making a measurable improvement, so it was much lower risk.

Also, it was a little high risk in that somebody could trip and fall on the property and I was buying an umbrella policy. I was trying to get them LLCs, but in LLCs they either call your loan due because you sold it, or you have a crazy interest rate. I actually put, I write in Forbes and I have a couple articles in Forbes on asset protection. If you’d like, Patrick Grimes, Forbes asset protection and multi-family, you can read about all these details.

But so my advice to people is, it wasn’t until I realized that it was a ton of work and I was trading times with my family, friends, and hobbies, to do a very grueling, slow pace, single family after single family, and that I can trade these up for larger multi-family deals. When you get above 80, you get onsite property managers and you’re not chasing yourself or chasing a property manager. And when you start scaling higher, you can have asset managers with decades long experience, acquisitions guys with relationships to get better deals that can analyze hundreds of deals, and you can partner up with far more sophisticated guys in a much lower asset if you invest in a syndication. There’s no financial risk other than what you’ve invested into. There’s no legal risk because you’re shielded in a securities offering for an LLC.

What happened was, I started trusting in others that were very sophisticated and incredibly sharp and experienced with a track record and partnering with them. Then I became an operator on the syndication side, and now I work with passive investors that can then go enjoy their lives and we’ll get them better tax advantages and better returns and better markets. That’s essentially my advice is, if I told myself something, I would’ve said, “Trust in others earlier on.” Trust by verify than I was trying to just grind it out and do it all myself.

Josh Cantwell:
That’s fantastic stuff. Patrick, listen, this is one of my… no disrespect to my other guests, but this is one of my favorite interviews I’ve done in awhile because you’re obviously speaking just right from your heart and right from your experience. It comes out in the way you talk. I just want to say basically thank you for just being on today, carving out some time, being authentic, just using all this experience to share with our audience who will absolutely love this interview.

Again, That’s where you can get the book. That’s where you can engage with Patrick. That’s where you can do a one-on-one session with him. Invest passively with him, if that’s a fit for you and for him, do all that on his website, Patrick, listen man, fantastic interview. Thanks for carving out some time for us today.

Patrick Grimes:
Happy to be here. Thanks again, Josh.

Josh Cantwell:
There you have it guys. Listen, I told you at the beginning during the intro, you would love this interview with Patrick. I thoroughly enjoyed it. I took a tremendous amount of notes. And so again, if you want to make sure that you never miss another episode of Accelerated Real estate Investor, make sure you press that subscribe button right now. Make sure you leave us a rating in a review. I would certainly hope with that content, with that interview, that you would leave us a five star rating because that was about as good as it gets. For sure, make sure that you leave us a rating and a review right now. Spotify, YouTube, iTunes, do it.

Also, man, if you’re looking to continue to build your portfolio, I’m looking to continue to meet amazing operators, amazing private equity guys, amazing asset managers and construction guys. We do it through our mastermind. It’s called the Forever Passive Income Mastermind, and you can apply to be a member of that mastermind at Thank you so much for joining us today and we’ll see you next time. Take care.

Speaker 4:
You were just listening to the Accelerated Investor Podcast with Josh Cantwell. If you enjoyed this episode and learned something new, help us build the AI community by leaving a review and five star rating on our iTunes podcast channel. Also, don’t forget to subscribe so you never miss another episode. To see passive investing opportunities, visit To start your journey toward the lifestyle you’ve always dreamed of with multi-family apartments, apply for one-on-one coaching with Josh at

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