Recession Resilient Investments in the Legal Industry

John Harcar (00:01.267)
Hey guys, welcome back to the show. I’m your host, John Harkar. We’re here today with Patrick Grimes and we’re going to talk about recession resilient investments in the legal industry. Remember guys, at Investor Fuel, we help real estate entrepreneurs, real estate investors and service providers, 2 to 5X their business by providing tools and resources to help them build the business they want to build and live the life that they want to live. Patrick, welcome to our show.

PassiveInvestingMastery.Com (00:09.644)
session completed investments in a legal industry.

PassiveInvestingMastery.Com (00:29.686)
Hey, Joe. I’m glad to be here. You’re talking about all the topics that I love to talk about here. So, it should be a fun conversation.

John Harcar (00:36.155)
Sweet, and I’m looking forward to learning more about recession resilience investments, something I’m not that familiar with. But before we really dive into all that, why don’t you kind of give our listeners an idea of who you are, kind of what you do, how you got to where you’re at, what got you here?

PassiveInvestingMastery.Com (00:53.144)
Sure. So my name is Patrick Grimes. I’m the CEO and founder of Passive Investing Mastery. Like many of your listeners, I started out a hardworking professional. I was a mechanical engineer doing machine design, automation, and robotics. Huge geek. Loved it. Still love it. Not doing it anymore, but I still love that stuff. early on, I started doing pretty well and looking for where to invest. And I got some advice to invest in real estate instead of high tech.

John Harcar (01:06.833)
Yeah.

PassiveInvestingMastery.Com (01:21.164)
And that’s what led me down the path. And it’s been a long, journey. Went some trials and tribulations a long way.

John Harcar (01:25.273)
Okay. Yeah. mean, engineer to investor. What, what kind of swayed you that way or what, what thing happened or what happened that kind of prompted you to meditate that way or gravitate that way.

PassiveInvestingMastery.Com (01:30.69)
Yeah.

PassiveInvestingMastery.Com (01:40.014)
So the first machine design company I worked for, the owner who is a good friend, even today, we’re still really great friends and he was a titan in the industry, really successful, highly admired him. I asked him, hey, where should I invest my bonuses? Where should I be diversifying? And I thought he was going to say, hey, you know that medical device company we’re working with or that aerospace gizmo gadget that, no he didn’t. He said,

John Harcar (02:05.106)
Mm-hmm.

PassiveInvestingMastery.Com (02:09.325)
But in real estate, make your money in high tech and spend it in investments in real estate. And his only regret was not buying more sooner because alternatives outside of the stock market, not this high tech industry that we’re in, in the boom bust of the stock market. That’s what will build the essentially the wealth of security that you and your family will need in the long term. And I was really young at that point, just right out of college and really, you know, but I.

John Harcar (02:23.314)
Mm-hmm.

PassiveInvestingMastery.Com (02:33.301)
I, know, snot nose engineer, I thought I could do it all and I jumped in head first and I quickly lost everything in the subprime mortgage collapse. That was my, that was my

John Harcar (02:40.795)
Okay, so I was gonna say let’s let’s talk about the timing of all this when did you buy your first one or when did you get started?

PassiveInvestingMastery.Com (02:44.652)
Yeah.

I got started in 2006 and it was in 2007 and 2008 that I made my first acquisition in pre-development project. So was a speculative high returning possible. I didn’t understand at that time markets and cycles and I was just really all about young and energetic and wanting to just double and triple my money every year and retire right away.

John Harcar (02:57.274)
John Harcar (03:09.298)
Right? The golden goose at the end of the row, that’s what you’re looking at. Who cares how to get there? Just look at that.

PassiveInvestingMastery.Com (03:15.967)
Right. Yeah.

about fail quickly, right?

John Harcar (03:22.298)
So tell me about that. Tell me some of the things that you’ve learned or some of the mistakes that you made that, you know, you know, if other folks might be getting into it, they can look out for.

PassiveInvestingMastery.Com (03:31.918)
We talk about lot of diversification now and really that comes down to are you all in in one, two, three or even four different market cycles because ultimately you could be in the stock market through your 401k or day trading and you might take a pretty big ride with that stock market sentiment driven stock market. You could be in real estate like I was as in both but you could go on a ride in real estate too and you know it’s important to zoom out not only with the type of investments within an

John Harcar (03:56.082)
for sure.

PassiveInvestingMastery.Com (04:00.737)
an asset class like real estate where I was in speculative new construction, pre-development, or you can even be in real estate where you’re kind of highly leveraged or leveraged in existing assets, you can still see downturns, right? And so we talk a lot about, you need to be in more than just real estate. You need to just not have financial independence from cash flow that comes from your retirement accounts in the stock market or real estate, but you need to strive for financial independence that’s in

John Harcar (04:15.142)
Mm-hmm.

PassiveInvestingMastery.Com (04:29.895)
lots of different markets, lots of different pillars into different market cycles of fundamentally different investments. And those are the ones that we really strive for at Passive Investing Mastery now. And those are the lessons that stem way back then, right? Were instilled in me through the trenches of getting battered and bruised and beat up through downturns.

John Harcar (04:33.464)
huh.

John Harcar (04:53.642)
Right. So what you’re saying is don’t put all my eggs in one basket. In a nutshell. Okay, so the downturn came in the market. You pivoted. What happened after that?

PassiveInvestingMastery.Com (04:55.669)
Yeah.

PassiveInvestingMastery.Com (05:00.886)
Let’s go.

PassiveInvestingMastery.Com (05:06.337)
Yeah, so I learned, I went back into my career and I was always successful, right? So I got a master’s in engineering and an MBA and took a high level position at a smaller company, bigger fish, smaller fishbowl and did well again. Started following the breadcrumbs of the wealthy and that’s when I started getting back into what in this case was

cash flowing, income producing, existing properties instead of speculation. And grew kind of a, and then what markets were, weren’t the boom bust markets like Houston, where I was able to buy and renovate and refi and rent and repeat. It was what they call the Burr method. Before I even knew what the Burr was, know, I was just an engineer doing this from California. It was working. ultimately took a break from the do it yourself

John Harcar (05:36.784)
Right.

John Harcar (05:49.522)
The burr, yeah, the burr. Yeah.

PassiveInvestingMastery.Com (06:00.441)
a single-family guy because I was moonlighting it. It was brutal. I met my wife, married my wife, and then traded up to larger apartments and then began diversifying into things like energy, doing debt investments, and now legal funding.

John Harcar (06:03.911)
No.

John Harcar (06:08.858)
Nice.

John Harcar (06:15.992)
Okay, so what does your portfolio look like now as far as properties that you’re holding? What do you got going?

PassiveInvestingMastery.Com (06:24.141)
So I’m a partner in over 4,000 apartment units right now. So I have a position in each of those. So that’s a pretty, that grew, right? I’m in, I think we’re allocated in over 50 different loans right now. We have an originator and a debt fund. And so we do a combination of originations and allocations and the other funds within there. And that is a really strong opportunistic way to

John Harcar (06:33.541)
Sweet.

Mm-hmm.

PassiveInvestingMastery.Com (06:52.833)
take advantage of the high interest rates and strong cash flow that debt can give you now, which it wasn’t before COVID, right? It was just really low returns in debt, but the banks on the sidelines, we have an acquisitions fund that is doing commercial acquisitions and not office by the way. So, but also not so much multifamily. Multifamily hasn’t been penciling as strong as it used to. So we have a number of retail centers in their industrial manufacturing.

John Harcar (06:58.158)
Right. Mm-hmm. Sure.

John Harcar (07:20.914)
Flex space.

PassiveInvestingMastery.Com (07:22.185)
Assets like that, are on a resurgence, there’s a lot of specifically in some markets, manufacturing really reshoring back up after COVID. And especially now with tariffs looming, as well as some of the retail centers that where you just have these great cash flowing assets, but operators that are financially struggling. And right now opportunistically, it’s the best buying opportunity in commercial real estate. So it’s pouncing time when I was being drugged through the gutter and the best.

John Harcar (07:35.164)
you

PassiveInvestingMastery.Com (07:52.054)
in the best residential single-family buying opportunity, now I can position myself to win. And then we’re doing acquisitions on that side and then we’re doing legal funding. And the legal industry, kind of like medical industry or education, they’re needed in downturns. And it’s interesting, it’s like betting with the house in a casino, they’re always winning, those doctors, And educators and attorneys.

John Harcar (08:11.855)
Mm-hmm.

John Harcar (08:18.684)
Yeah.

PassiveInvestingMastery.Com (08:21.517)
And it’s just, if you look at the graphs of the growth of the legal industry, it just steadily grows. It just doesn’t care what’s happening in the stock market, gold, oil and gas, real estate, interest rates, doesn’t care about any of that. so, I want you, kind of, in my, when you kind of get to a level where you’ve kind of seen the volatility and all these kind of popular, really well-known investments, you want to look towards ones that are lesser known, right? More novel.

John Harcar (08:27.622)
Mm-hmm. Yeah, right.

John Harcar (08:46.646)
huh.

Why is that?

PassiveInvestingMastery.Com (08:51.733)
Because it’s just simply the popularity of real estate, it’s easily accessible. There’s a lot of people like, hey, invest in this or you can buy your own house. But they don’t realize that real estate goes on a ride. can invest in oil and gas. You can lose a ton of money. You can make a lot of money. It goes on a pretty commodity, pretty, pretty, pretty ride, just like the stock market. But not a lot of people know how to access, hey, how would you invest in healthcare? How do you invest in education? How do you invest in

John Harcar (09:04.402)
Sure.

John Harcar (09:11.634)
All

PassiveInvestingMastery.Com (09:20.799)
attorneys or CPA firms or HVAC or plumbers, all these kinds of things that are needed regardless of economic cycle. And so, you know, the idea of it is to find those asset classes by the company, is to find those asset classes which provide a combination of recession resilience and non-correlation, which means they don’t rise and fall. They’re not driven by the same market factors that lift and lower the rest of their portfolio. And by doing that,

John Harcar (09:28.813)
huh.

PassiveInvestingMastery.Com (09:50.53)
By investing in some of these more novel ones that are completely different than the other ones, you can build much true financial security because you may be financially independent in real estate, but you’re riding that ride of real estate and that’s not a lot of security. you’re diversified across lots of different markets that ride different ways or oftentimes some that don’t ride ways, then you’re going to find yourself sleeping a little better and that’s how I felt every time I allocated into one of these

John Harcar (09:59.133)
Hmm.

John Harcar (10:06.457)
Right.

John Harcar (10:17.968)
Ha ha ha.

PassiveInvestingMastery.Com (10:19.565)
more novel, lesser known asset classes that are typically highly coveted by hedge funds, private equity funds, sovereign funds for their non-correlation. may not be as sexy as the huge wins you can get in the stock market or the rides in real estate or an oil and gas, but those things are going to return and you’re going to sleep a little better at night knowing you have an allocation into something that isn’t affected by the rest of your portfolio.

John Harcar (10:24.343)
huh.

John Harcar (10:37.714)
Stability.

John Harcar (10:43.858)
Okay, so what got you to create passive investing mastery? How did that all lead up and come to about?

PassiveInvestingMastery.Com (10:46.305)
So, thanks everybody.

PassiveInvestingMastery.Com (10:50.933)
Also, my theory on investing has always been allocations and strategies. And if you look at any of our slide decks, you’re going to see we lead. But here’s like the allocation of the wealthy and from different references. And here’s the allocation of the middle class, high income and ultra wealthy. And here’s where they’re putting their money and how do you balance your portfolio. And I’ve always been seeking and on the journey to not lose it all again. Right. Maybe I don’t lose my shirt. Maybe I lose a button.

John Harcar (11:18.316)
PassiveInvestingMastery.Com (11:20.663)
But that’s been my journey. so it never was all in in real estate. And the challenge I think that a lot of people get into is real estate’s a stepping stone. It’s not the end game. And when you get really good at something, whether it’s you’re an attorney or a doctor or a real estate investor, you just want to do that one thing over and over again. You get really comfortable with that one thing and then it becomes a disproportionately high amount of your portfolio.

John Harcar (11:22.32)
Mm.

John Harcar (11:47.25)
huh.

PassiveInvestingMastery.Com (11:48.075)
And that very thing that brings you comfort brings instability and in your subconscious a little fear. if there’s a little downturn? Yeah.

John Harcar (11:54.115)
Anxiety. Okay. So the goal and the answer is to diversify.

PassiveInvestingMastery.Com (12:03.937)
Specifically, a non-correlated alternatives is what we talk about.

John Harcar (12:08.932)
Right, okay. So I mean, if someone’s wanting to get into this, I mean, what kind of advice, what kind of tools, resources, I mean, how would you guide someone that never knew anything about this, but it says, hey, I need you to help me diversify into some, you know, non-correlated stuff. How do I do this?

PassiveInvestingMastery.Com (12:27.853)
I’ll tell you what, if you’re like that, then you’re like 99 % of the population plus out there because nobody teaches this. There’s no financial IQ education on alternatives. They just ram down your throat 401ks, IRAs, real estate and start up, they just, you popular. You’re just way overloaded with this information. So this is reason why we created Pass Investing Masteries to educate on that. In fact, every, every

John Harcar (12:42.911)
Right, all the traditional stuff.

PassiveInvestingMastery.Com (12:56.629)
almost every week now, but we have a bi-weekly mastery series where every single time we bring on a panel of different operators and experts in different kinds of alternatives and we kick around for about an hour with live Q &A. How do you invest in them? How does it work? How do you do it safely? What kind of the returns? What’s the duration? And go heavy into all kinds of things from gold to gold mining to technology metals to

John Harcar (13:07.696)
Huh.

PassiveInvestingMastery.Com (13:25.835)
crypto to parking lots to laundry mats to bourbon barrel cask investing and alcohol bev investing and tax liens and tax deeds. We’ve got to name it. We’ve done over 30 of these every single time completely how to buy an airplane for cash flow, how to invest in educating airline pilots, all these different strategies that ride different correlations. And we also sponsor deals at our company too.

John Harcar (13:38.706)
Mm-hmm.

PassiveInvestingMastery.Com (13:53.006)
And we helped be a part of the solution by, it used to be me and just a couple other dudes just like trading the baseball cards, right, of these old assets, right? And now we’re just like, I’m going to show everybody my hand. And when I did that, people were like, wow, I was like, okay, look, let’s pick up the deck and let’s just show everybody the deck. This is the blue ocean approach of everywhere you can go other than the stock market to go. And so the first step is just to join something like that.

John Harcar (13:53.394)
Bye for now.

John Harcar (14:18.108)
Sure, yeah, yeah.

PassiveInvestingMastery.Com (14:22.759)
join meetup groups, get in front of people, start doing, being around the people that are thinking in alternative ways and they’ll draw you in. You’ll start to see how the way people are really successful, that’s how they’re doing it. There’s hedge funds, sovereign funds, private record firms, this is how they’re doing it. We can too, we just have to get out there and find those opportunities and that’s what our whole platform is about.

John Harcar (14:45.404)
Got it. Are you seeing any specific trends in any asset classes or any specific things here in the near future?

PassiveInvestingMastery.Com (14:56.429)
Well, I’ll tell you what, right now the really cool thing, like I mentioned before, is that we’re in a best debt time, private credit time, that we’ve been there in decades. Right now with the banks in a liquidity crunch, interest rates really high, doing private debt and private credit is soaring. BlackRock right now is putting billions of dollars, our private credit fund is just doing amazing.

John Harcar (15:15.259)
Mm-hmm.

PassiveInvestingMastery.Com (15:20.749)
we’re lending on assets that usability is 6, 7, 8 percent. Now we’re lending at 12, 13, 14 percent and these investors are happy to get that because the banks are simply just not at the table. That we’re able to pick up incredibly discounted properties, commercial assets in our acquisitions fund that you otherwise couldn’t and it’s because they’re performing properties. There’s just not a lot of liquidity in the market right now.

John Harcar (15:31.057)
Right.

John Harcar (15:44.114)
Sure.

PassiveInvestingMastery.Com (15:45.824)
Other assets like our legal funding, what we found in my partners for like over 10 years has been originating loans, not into the real estate industry, but to attorneys. And there’s a huge deficit right now of liquidity available to attorneys that are working on a contingency fee basis. That means they’re representing clients, not pro bono for fee for free, but on a contingency fee contingent upon success. And that allows

John Harcar (16:12.818)
Mm-hmm.

PassiveInvestingMastery.Com (16:14.113)
these harmed individuals to then get access to justice that they otherwise couldn’t. Just like how our real estate loan company allows operators to buy and improve properties so they can house tenants, our litigation portfolio allows attorneys to acquire clients and the operating expenses necessary to get them access to justice. And that right there is a huge opportunity right now.

John Harcar (16:28.722)
huh.

John Harcar (16:40.836)
Got it. And then if someone said, you know, doesn’t have any investment experience, I mean, what kind of beginning advice would you say for them to do research, search out, whatever.

PassiveInvestingMastery.Com (16:44.909)
and I’ll later.

PassiveInvestingMastery.Com (16:56.937)
So join our platform first of all because that’s the whole purpose of our platform. And we’ll start introducing you to different asset classes. We have a sad, every Saturday we do a wealth building tool where every Saturday you’re going to get an email on different wealth strategies that comes out. I grab a copy of my book, I can give them the link for that, we ship it out for free. But I typically say, you need to find your tribe. And that’s why we’re trying to build a tribe. The main condition is,

John Harcar (17:23.991)
huh.

PassiveInvestingMastery.Com (17:25.975)
We’re not designed to go wander out in the wilderness together. Whether it’s the jungle or the desert, those people have passed on and the people that stuck together in a tribe survived over time. And so it’s important I say, take one passive step a day. I run every morning along the beach and I listen to podcasts, TED Talks, self-help books, and investment. Investment webinars, all kinds of stuff. And I’m running or I’m driving somewhere.

John Harcar (17:30.972)
Yep.

PassiveInvestingMastery.Com (17:53.4)
I got my headphones in and I’m listening, I’m educating myself passively throughout the day. And that daily dose, however long it is, you’re doing laundry, you’re doing whatever it is, that’s going to help reprogram and you’re going to start thinking and being a little more like these other people. That’s how I began to get in. And then I say take one active step a week. Now if you can’t, maybe once every two weeks.

John Harcar (18:09.106)
Bye.

PassiveInvestingMastery.Com (18:16.523)
Go join us. It was through COVID virtual, but get yourself around. Go to physically, look at meetup.com, look for different kinds of investment groups and get somewhere where you’re physically surrounded by people. And then just go talk to the people that are succeeding and investing in ways that you want to. Invite them out to dinner, invite them out to lunch, and then start building that tribe. And that’s what worked for me. And that’s what keeps working for those people that take me up on this advice.

is what you find all of a sudden is that then they’re going to be like, I’m going to this conference. You didn’t even know exists. I’m going to this. Have you heard of this investment strategy? Let’s look at that. And every time you look at the new investment strategy or you surround yourself with another group of people, it’s going to be easier and easier and easier until all these alternatives start to look very similar, just slightly different in the way that they’re made up and it becomes more natural to you.

John Harcar (18:51.62)
Right.

John Harcar (19:08.034)
Right. Yeah, no, and I definitely agree. It’s it’s you know, I’ve said this, it seems like all day today is not who you know more or what you know is more who you know and get it get around the right people to help guide you. I’m sure there’s other companies that talk about or do stuff like this kind of tell us a little bit of what sets you apart and what sets you guys, you know, apart from the next person on why we would come and learn from you.

PassiveInvestingMastery.Com (19:22.733)
I’m there are companies that talk about the news and like

PassiveInvestingMastery.Com (19:35.054)
Well, I think that there are a lot of great companies out there and we feature them. I I’d love to get your list of the top 10 and we’ll bring them on as panelists. And you can jump on there if you’d like. But we bring on very notable, respectable, established operators and all kinds of asset classes. So our intention is to just give out there, blue ocean approach, here’s all the strategies. And what makes us different from our offerings

John Harcar (19:44.068)
Yeah, heck yeah.

PassiveInvestingMastery.Com (20:04.799)
is that they are truly non-correlated, recession-resilient, opportunistic type of investments. And we have strong track records if you look on our website. But at the same time, we give investors the ability to see virtually everything we can find and get it out there in front of them to choose from. And we have no trouble at all filling up our own offerings at our organization.

John Harcar (20:10.32)
Mm-hmm.

John Harcar (20:27.078)
God, awesome. Well, and I appreciate you coming on and talking about all this stuff. Like I said, for me, it’s something I didn’t know much about. if folks want to get a hold of you, if they want to talk about the passive investing mastery, if they want to talk about all the different investments, how do they reach you?

PassiveInvestingMastery.Com (20:31.725)
Like I said, it’s going to be something that everyone should know about. It’s all so exciting. If anyone knows, can talk about it in the comments.

PassiveInvestingMastery.Com (20:45.389)
So you can go to passiveinvestingmastery.com, passiveinvestingmastery, all spelled out, .com. And my email is just patrick at passiveinvestingmastery.com. You can also go to passiveinvestingmastery.com slash book and that’s the secret link that allows you to type in your information and hit submit and I will either you can download a copy of our most recent number one bestseller or you can download a copy

and also get a hard copy shipped to you for free. And that’s kind of my give back. And I sign them and I send them out and that’s my give back to everybody that is interested and hopefully I tell my whole story. made it big and I lost it all. I came back, I was busy, I scaled and then I diversified and I talk about the theories and the approach. There’s also a lot of other really cool people who also did chapters in that book. Phil Collins, lead guitarist at Def Leppard, NFL, NBA players.

John Harcar (21:18.887)
Go up.

John Harcar (21:40.83)
cool.

PassiveInvestingMastery.Com (21:43.872)
entrepreneurs it’s a really fascinating book but passive investing mastery dot com slash book highly recommend you go there right there on our home page we have our investments and there’s a calendar link at the bottom anybody wherever you’re at regardless happy to talk to you love it if you jump to set up a call and we can just see where you’re at and get you pointed in the right direction we have like i said a bank of 30 some over 30 past mastery series sessions

that dig deep into all kinds of alternatives and get you pointed in the right direction and know that you can cruise around and which ones you like the most. Happy to do any introductions along the way. So anybody out there love to chat with you. It’s part of what I love to do in this world.

John Harcar (22:26.042)
That’s awesome, That’s great nuggets, great give. You know, I’ll go on and I like reading hard copy books so you can send me a hard copy.

PassiveInvestingMastery.Com (22:35.081)
I can’t remember.

John Harcar (22:36.211)
So guys, I hope you learned something today. mean, like if I said, anything, jump on his site, get the book, get his knowledge, and really take things away from the traditional stuff we talk about in real estate investment, and get into maybe some diverse, survived stuff. Patrick, once again, thank you very much. And guys, I hope you enjoyed this. And we look forward to seeing you on the next one. Cheers.

PassiveInvestingMastery.Com (22:56.096)
in Vienna.

Thanks so much.