From Engineer to Real Estate Investor – Patrick Grimes’ Success Story

Patrick Grimes (00:00)
I was in Facebook and Google and Genentech, Johnson & Johnson and Abbott and Tesla and Lockheed and Boeing.

The smartest people I’ve still ever met were those people working in those facilities. They didn’t have a single clue. And I didn’t either at the time that any of these alternative strategies existed. All we knew was that you have an IRA,

None of us had any idea about these altcoins.

Kristen Knapp (00:24)
Yeah.

Patrick Grimes (00:25)
It takes people like me and our team that are just willing to just blue ocean approach and get it out there, get people on these webinars. Like, this is all the different things you can do to really try and up that level of financial investment into alts.

Kristen Knapp (00:35)
Yeah.

Welcome back to the Real Estate Pros podcast. I’m Kristen Knapp and I’m here with Patrick Grimes, who is the founder and CEO of Passive Investing Mastery. We’re going get into his education platform as well as the different investments he has going on. There’s a lot, lot to talk about. Thank you for being here, Patrick.

Patrick Grimes (02:13)
or something like that.

Thanks for having me. Looking forward to the discussion.

Kristen Knapp (02:30)
Yeah, so let’s go back to the beginning. You kind of have an interesting story into real estate. Can you talk about that?

Patrick Grimes (02:36)
Yeah, well, like many of your audience, I was a high paid professional working my way through corporate America throughout my journey into alternative investments. And it started out, snot nose engineer, machine design, automation, robotics guy looking for where to diversify. And the founder of the company I was working for said, hey, my only regret’s not investing more into real estate sooner and make your money in high tech, dump it in real estate. And so that’s what I did.

Kristen Knapp (02:43)
Mm-hmm.

Patrick Grimes (03:04)
Of course, lost everything back in 2009 and 10. I was a little overzealous with my desire to get into some risky high-returning stuff. But I’ve since learned to build investments that can ride through recessions and focus more on alternative allocation strategies that aren’t so market-dependent, volatile.

Kristen Knapp (03:23)
Definitely. So, you you enter the market during a recession. What did that look like for you and how did you keep going from that?

Patrick Grimes (03:29)
I entered before the recession, but it would have been great if I would have entered during the recession. In 2010 and 11, that would have been fantastic. I was just a little bit younger, graduated a little bit later. But yeah, it was brutal. I didn’t end up going bankrupt, but I did fight and I ended up doing a negotiating debt forgiveness and getting through a foreclosure process, which is very humbling.

Kristen Knapp (03:31)
Yeah. ⁓

Yes.

Patrick Grimes (03:54)
I was battered and my ego was bruised and my pocketbook was robbed. Unfortunately, I learned some lessons early and I was still a successful robotics and automation guy. I actually love it. I don’t do it anymore, but I loved what I was doing. I got a master’s in engineering and a MBA. Then what happened was I started, I moved around to get a higher position realizing I needed to find a way to invest again.

The breadcrumbs of the wealthy led me back to real estate, in better assets, things that were in markets that were recession resilient, buildings that actually existed that I could buy, renovate and rent and refi and repeat. these are, know, I just started doing single family before I traded up to apartments and then started really diversifying into other kind of lesser known alts.

Kristen Knapp (04:42)
Yeah, let’s talk about that, because I know that you really help people with less recession-resistant investments. What do those look like?

Patrick Grimes (04:51)
Well, in today’s, it’s kind of similar precarious footing to how we’ve been in the past. I mean, we just got done with a pandemic which raised interest rates, trickled into inflation of materials and payroll. Interest rates are, you know, skyrocketed. Valuations reset in real estate and commercial real estates dramatically.

and

11 out of the last 14 federate hikes ended in a bust. mean, probabilistically, are we in a precarious footing? Of course. Now, if that was all that happened, you would be very smart to allocate into some other investments which don’t ride broader markets. But that’s not all that happened. I mean, we also have two real wars. We have the wars with Iran and Israel going on right now. And we have, we just

Sorry, we have Ukraine and Israel and then we just bombed Iran. And if that wasn’t enough, we have a trade war still going on going here with our biggest allies. Any one of those things could also cause market volatility. But while the world’s biggest economies are betting against the dollar and China’s, you know, it is a very precarious time. So I think while it always makes sense to invest into non-correlated sort of things that don’t rise and fall together and to work on diversification strategies.

Now so more than ever, it makes sense to focus on that. And so that’s what our platform does. Our platform educates on all kinds of non-correlated alternatives that kind of fit that Venn diagram of things that don’t rise and fall with your broader portfolio and things that tend to ride out recessions. And that overlap is my sweet spot.

Kristen Knapp (07:09)
Yeah, and what would some of those assets be? What are some examples?

Patrick Grimes (07:12)
Yeah, so we hit opportunistic assets too, as well as allocations into things like we promote a healthcare legal things like education, because those are industries that are needed in downturns. know, people get sick, they need they need healthcare and up good times and bad times. And in bad times, people need re-skilling and upskilling and in good times, people need education. that’s pretty sticky.

In the legal industry, it’s quite phenomenal, actually. When the markets are great, attorneys do really well. When markets are bad and people get litigious and start suing each other, attorneys do really well. The industry just tends to not care what’s going on with the stock market, oil and gas, real estate, interest rates. It’s what we call in a non-correlated investment. And so that’s why we are actively working in.

a diversified litigation portfolio, which is essentially a portfolio of investments in the legal industry.

Kristen Knapp (08:08)
Wow, that’s really interesting. And why do you think, you know, some of this stuff isn’t taught in school?

Patrick Grimes (08:13)
I mean, there’s a whole long conversation we can have about the financial IQ of America and why I built the passive investing mastery platform where we educate every two weeks on, we bring on panelists of completely different assets. We’ve got 50 hours now every two weeks of completely different assets highlighted all over the map. And instead of just being told, here’s the 50 stocks you can invest in, we’re about 50 different alternatives now that we’re giving out there to the world.

saying, hey, did you know about these? And it was crazy because I was doing automation and robotics, product development, machine design with some of the coolest people and companies on the planet.

I was in Facebook and Google and Genentech, Johnson & Johnson and Abbott and Tesla and Lockheed and Boeing. And I was doing things, Blation catheters that went up in your heart and heart valves. And I was working on Waymo like 15 years ago, the self-driving cars.

and solar cell satellite things for luck. mean, this amazing stuff. The smartest people I’ve still ever met were those people working in those facilities. They didn’t have a single clue. And I didn’t either at the time that any of these alternative strategies existed. All we knew was that you have an IRA, have a 401k, maybe an IRA. You can bet some big on your own startup or some local startups in the Silicon Valley, California area.

you know, or you can buy Bitcoin and that was still on the fringe back then. But that was pretty exotic. None of us had any idea about these altcoins. So unfortunately, coming out of the Great Depression, this is where the commerce would get really long. The government wanted people back in the market. So they started sponsoring these 401k accounts. But back then, pensions were a thing. But somehow that became all you need. And it never was meant to be the case. And it’s still not the case today. And so

Kristen Knapp (09:42)
Yeah.

Patrick Grimes (10:00)
It takes people like me and our team that are just willing to just blue ocean approach and get it out there, get people on these webinars. Like, this is all the different things you can do to really try and up that level of financial investment into alts.

Kristen Knapp (10:10)
Yeah.

That’s amazing. And what kind of people find you? Are they early in their investing career? Have they made mistakes along the way?

Patrick Grimes (10:59)
it’s all over the map. Fortunately or unfortunately, the majority of the investments which we talk about and the offerings that are behind them are, there’s tons of people we bring on, usually three different panelists per strategy and there’s a new strategy every week or two we highlight. But the vast majority of all of those are all for accredited investors. So they tend to be people that are sitting that usually have a million in investable assets outside of their personal residence.

Kristen Knapp (11:00)
Yeah.

Patrick Grimes (11:26)
or high incomes like 200 as an individual, 300 when combined with their spouse. It’s tough for those people that don’t have, that aren’t, don’t reach that SEC arbitrary or credited status because if you’re doing an investment that you can bring in non-accredited investors, you can’t be out soliciting it. So it’s, you have to kind of, it’s a catch 22, right? So even if individuals not accredited, I recommend jump in there and learn about the all, set up a call, it’ll get you pointed in the right direction.

I do know some people that are offering non-accredited investments. can go in, you can meet them and then maybe invest in their next offering. But it tends to be individuals like I was, people that are working really hard. They work 60, 70 hour weeks trying to make as much money as they can while juggling time with their family, friends and hobbies and causes they care about. They just don’t have time.

to then become an expert in something else. They went through grad school, PhD, or they passed the bar, or they went through their med school and they’re like, hey man, I’ve done my, I’m mastery of something now. How can I be a mastery in real estate? How could I also be a ministry in energy or in healthcare? And to be truly diversified, you have to have investments in all of these things. Nobody can live like 10 lives and become experts and everything, right? So.

You’ve got to get in, get as far as you can in, find the right partners and start building an allocated strategy. And that’s what we try and help do.

Kristen Knapp (12:48)
That’s amazing. do you guys, know you have the education platform. Do you ever work one-on-one with people to help them have like a customized strategy?

Patrick Grimes (12:55)
We have, I mean, I have my web. One of the things that I love about the fact that I, you know, walked away from the high tech career, uh, in doing this full time, you know, a years back was that, man, I could just open up my calendar now. And that’s one of the things that I love doing. And that’s why we just have a platform that points people at every other investment that there is in the, in the alt space other than our own, which we have our own, but I like to have that blue ocean approach and I like to invest. so I.

Happy to talk to anybody. The calendar’s on our website. And get you a friend at the right stop for you. Hopefully we get you pointed in the right direction.

Kristen Knapp (13:30)
Yeah, and what did, what was the impetus when you decided to walk away from your tech career?

Patrick Grimes (13:35)
Well, so I am still a geek. I still love engineering and I’m still like side projecting engineering around my house and I turn everything into an engineering project that I do for fun, but I’m not doing professionally engineering anymore. But I was that kid taking apart VCRs and stuff like whatever VCR was, right? I was one of those and I built Legos and creating an alarm system for it.

Kristen Knapp (13:38)
you

Patrick Grimes (14:00)
you know, my Lego houses and stuff. you know, what ended up happening was, think it was during COVID when I was contracting, I ended up doing a bunch of work doing automated test kit. So we’re either flu test kit or drugs abuse tests, we’re like converted over to COVID diagnostic tests. And what was interesting is,

I was a contractor that ended up being some record years in the engineering space for me while I was simultaneously doing real estate. But after that, COVID started to die down. My wife and I had relocated during COVID to Honolulu, where we’re at now a couple of blocks over from the beach in Waikiki. And explaining that aloha shirt I’m wearing right now, trying to do a little representing. She was doing feature-length animated films.

Kristen Knapp (14:42)
Yeah.

Patrick Grimes (14:48)
for Disney and Dreamworks and Nickelodeon. She’s a production manager. And ⁓ I was doing consulting on the contractor basis for the automation. And then I just realized, man, I’m flying off this island a lot and we’re happy here. And so we were going back and forth, you know, on occasion to our other place in Norwich County. But eventually it came down to the point where I was like, this is a little scary. You know, we have a two and a half year old, but

And I kind of love doing engineering, but the time away from the family is not worth it. And the opportunity to just go all in in these ALTS investments and passive investing mastery was the right thing. And I think we’re really happy that we did it. And I honestly couldn’t imagine going back.

Kristen Knapp (16:14)
That’s amazing. And I imagine it’s very gratifying to work with so many people and help them build their own wealth.

Patrick Grimes (16:19)
I love it. I think it’s really fun. obviously can’t give investment advice. I’m not a financial advisor. I’m not a CPA and I’m not an attorney, so I can’t give financial tax or legal advice. But man, I’ve been down roads and I’ve got a whole platform where they can learn from all kinds of experts that are all of those people. And I know a hundred different sponsors of different kinds of alt investments. So we can usually get you pointed in the right direction for somebody that kind of fits what you’re looking for.

Kristen Knapp (16:21)
Yeah.

Yeah.

It’s amazing. And I think so many people with their investments specifically in real estate, I think people have the conception that they have to work really hard and do the flips and be on the ground and all that. And I think the whole idea of passive investing is really interesting.

Patrick Grimes (17:01)
I can’t get to true financial security being active and I kind of pointed to this a little bit before. I when I was an engineer and I started doing single family, I was like, I’m going to do it all on my own, right? And I did. And it worked. But what did I would trade off? was day during the day doing automation robotics and doing the night fairly inefficiently compared to the people that were doing it full time. I was doing single family. Now I was doing it not from California, but I was doing it in Texas because I

I wanted to invest in recession resilient markets with that better opportunity to rent, which made it even harder. And I was competing with people that were there all day, every day and had been for 15, 20 years. But I was succeeding. But I was succeeding at building a single family portfolio, but I wasn’t succeeding at a balance. Or I was sacrificing times with my family, friends and hobbies and my causes that I cared about. And I had some stress episodes during that time. And I met

Kristen Knapp (17:39)
Yeah.

Patrick Grimes (17:54)
this wonderful girl going to CalArts and I was pretty enthralled by her and I had a conversation saying, look, I’m going to take a break from this single family thing because I can’t date you and do that because it was just consuming all my time. But that was and so we got married two and a half years and we got married in California, Beijing. And I took a break from investments before I partnering and partnered into apartments and energy and

Kristen Knapp (18:04)
Mm.

Patrick Grimes (18:18)
private credit and legal. And now we feel like every time I do a step to a little bit of an unknown and I learned how to partner and build relationships, I don’t have to sacrifice everything again. And I can get a much broader spectrum of investments that help to really provide true security. Because in real estate, I lost it all there one time. Lots of people have lost it all in the stock market. Oil and gas, it’s really volatile.

Kristen Knapp (18:38)
Mm-hmm.

Patrick Grimes (18:46)
It goes up and down. It’s an allocation. And it doesn’t rise and fall with the real estate, not necessarily correlated to the markets either. It’s an allocation, but it’s a volatile one. But what about the legal? What about health care? These are things, those ones, that tend to be resilient and non-correlated. But you can’t become a doctor. You can’t become an attorney at the same time while you’re whatever you are now. So it takes a level of partnering up, of learning how to become a good partner in order to build that

Kristen Knapp (18:54)
Mm-hmm.

Patrick Grimes (19:13)
portfolio that’s truly diversified into non-correlated assets and builds true financial security that can outlive downturns.

Kristen Knapp (19:19)
I love that, I love how you’re you’re educating people, you’re actually helping them, you’re not just telling them, pointing them in one direction, you’re actually taking the time to educate. And with these types of investments, what sort of returns and timelines should people expect?

Patrick Grimes (19:36)
So we have a few ourselves, but to your point, we’ve pointed at about 50 others so far on our platform. So we’re pointing away much more than you have to be that way in order to truly build a non-correlated portfolio. But we have opportunistic investments in real estate, which is a great allocation. It’s about a 25 % allocation, most metrics for high income and wealthy individuals. It’s not the end game, but it is a really great step in the right direction.

Kristen Knapp (19:42)
Yeah.

Patrick Grimes (20:03)
And so we have debt instruments there where we have a diversified pool that allows individuals to take advantage of this incredible time in commercial real estate. Commercial real estate is undergone what residential real estate did back in 2010, right? This is the chance you can lend to operators and banks are on the sidelines and interest rates are high. You can lend to those operators and get really high rates equity like returns, but in a senior secured position, very low on the capital stack.

Kristen Knapp (20:13)
Okay.

Patrick Grimes (20:32)
not subject to all the volatility above, right? And so that’s what our income fund is. And that’s the opportunity to lend high. But you can also buy lows. We have an acquisitions fund that buys things in cash, commercial real estate, not office, and honestly not multifamily either. It’s still really precarious footing that both of those two. But we’ve seen a lot of opportunities in other assets and manufacturing, warehousing.

⁓ retail centers in certain markets where there’s been a big research and reshoring, free, during, and post-COVID, especially with the tariffs going on. Industrial vacancies are shrinking dramatically. It’s really great time. So we have an acquisitions fund where you can buy low. And that is a really cool thing to make a return on the buy and not have to buy and hope you can renovate and hope you can improve and hope that correlates to values. None of that worked. None of that worked over last few years.

So today you don’t have to do that. And then we have the litigation fund, which is your chance to invest in the legal industry. And it’s a diversified portfolio of investments, just like our real estate debt fund, but we’re lending to attorneys. And these attorneys are working on a contingency fee. So they need cash to help these individuals that otherwise couldn’t afford representation. And so we’re not providing housing to tenants. We are providing.

Kristen Knapp (21:40)
Yeah. Right.

Patrick Grimes (21:47)
access to justice for those who could otherwise afford it and by supporting up these operators, not real estate operators, but legal operators that need to not acquire a building or improve a building that need to get new clients, acquired clients or operating expenses to get to settlement. And we participate in the sale proceeds, actually the settlement proceeds in this case, the settlement proceeds, which provides really great returns. And we have liens and it’s just a private

credit type of lending strategy that’s very common to real estate just happens to be in a different industry.

Kristen Knapp (22:21)
Wow, there’s so much going on. You’re so educated on everything. think everyone should check out your website. Please tell people where to find you.

Patrick Grimes (22:29)
I’m educated on everything, but I’m ⁓ promoting access to education and to a lot of opportunities and trying to make the alternative investment options commonplace, well-understood and better known. so Passive Investing Mastery is our website where we, right at the top, we do have our three funds that you can invest in right away.

Kristen Knapp (22:31)
You seem like you are. More than me.

Patrick Grimes (22:52)
Below that, can register for our Alternative Investing Mastery Series. Alternative Investing Mastery Series at passiveinvesting.com. And on that, you can tune in every one or two weeks to a completely different asset class and usually three panelists that have decades of experience in that specific asset class, teaching about a different kind of investment. Or we have strategists, tax advisors, IRA accounts, asset protection. We have those people come on too.

I also have a book if people want it, passiveinvestingmastery.com slash book, really complex, passiveinvestingmastery.com slash book. I’m on here, there’s a Navy Seal on here who did a chapter, Phil Consley, guitarist at Def Leppard and actual rock star, Brian Tracy, Kevin Eastman, Tom Ziegler, Dennis Whaley, lot of really amazing people, NFL players. I had such a great time, right? I tell my whole story. We signed them and them off.

Kristen Knapp (23:23)
Nice.

Patrick Grimes (23:48)
So if somebody wants it, they can download the ebook or they can download the ebook and get a copy and pass that investingmastery.com slash book. If you don’t put the name of the podcast or how you found us, we’re not going to respond. But if you put in there how you found us, we’ll ship it out for free. And if you’re sitting at home like, hey, look, you know, I think I understand what he’s saying. He’s saying that if I’m all in in one asset like the stock market or even in two like the stock market in real estate, you can lose it all.

Kristen Knapp (23:52)
Amazing.

amazing.

Mm-hmm.

Patrick Grimes (24:14)
because those are pretty

Kristen Knapp (24:15)
Yeah.

Patrick Grimes (24:15)
volatile industries. And yeah, I guess I would like to allocate into something else. I just don’t really know what that is and I feel a little insecure. I wonder what those other things are. The most common question I get is, hey Patrick, what are your favorite alternatives to invest in that help to build security that are non-correlated to the rest, that are lesser known? What are those? What should I be doing? Like what should I actually invest in now today? And so we created a…

investwithpatrick.com. If you go investwithpatrick.com, there’s a download there that’s Patrick’s favorite alternatives to immediately start building security in non-correlated investments. And I have a list of them there. Here they are. And then on the ladder pages, I dig deeper into the ones that you may be interested. You can flip forward into that, but investwithpatrick.com. Hopefully that gets you some aha moments of like, I can do this and I can do that. like, hopefully it gets you pointed in the right direction.

Kristen Knapp (25:07)
Definitely. Well, those sound like amazing opportunities with the book and the courses. So I encourage everyone to please check that out. And thank you so much for being here, Patrick. Awesome. Well, thank you everyone for listening, and we’ll see you next time. Thank you.

Patrick Grimes (25:16)
Time to be here.