Build a Portfolio That Pays You Even When Markets Crash

The Real Estate Investing Club

Join an active community of RE investors here: https://linktr.ee/gabepetersen  0:00 - Welcome & introduction to Patrick Grimes 1:16 - Patrick's origin story: from engineer to real estate investor 3:37 - Losing everything: the pre-development deal that changed his life 7:56 - Rebuilding from zero and discovering recession-resilient markets 12:12 - Where the real opportunities in real estate are right now 15:12 - Why industrial real estate is the smartest play in today's market 20:38 - Quick question round: books and wisdom for life and investing 24:33 - Advice to your younger self: stop going it alone 26:28 - How to find off-market deals using direct-to-owner outreach 29:42 - Best US markets to invest in today: Dallas, Houston & beyond 34:25 - Biggest investing lessons learned from costly mistakes 35:30 - How to connect with Patrick Grimes & Passive Investing Mastery  EPISODE OVERVIEW 🎙️ In this episode of The Real Estate Investing Club, I sit down with Patrick Grimes of Passive Investing Mastery — an investor who lost everything in a speculative pre-development deal before the 2008 crash and rebuilt himself into a diversified portfolio operator spanning commercial real estate, industrial assets, retail, energy, legal finance, and medical investments. Patrick's story is raw, honest, and packed with the kind of hard-won insights that can genuinely reshape how you think about building lasting financial freedom. 💡  FROM LOSING EVERYTHING TO BUILDING REAL WEALTH 📉💰 Patrick's journey starts with one of the most powerful wake-up calls in real estate investing. Before the subprime mortgage collapse of 2008, he signed a personally guaranteed loan on a speculative pre-development deal — and when everything fell apart, he not only lost the investment but was later hit with an income tax bill on the bank's forgiven debt after foreclosure, something most investors never even know is possible. Rather than walking away from real estate forever, Patrick doubled down on his engineering career, earned advanced degrees, and spent years studying exactly how wealthy people protect and grow their money outside of the stock market. What he discovered changed the entire trajectory of his financial life.  #RealEstateInvesting #PassiveIncome #FinancialFreedom #RealEstateInvestor #WealthBuilding  Want to learn more about our guest? Connect here: https://www.getwaltz.com/  Want to learn more about the REI Club Podcast, how to invest with Gabe at Kaizen, or join our community of active real estate investors on Skool? Visit the podcast website at https://www.therealestateinvestingclub.com or click here: https://linktr.ee/gabepetersen

Transcript

00:05all right we are back with another episode of the real estate investing club i hope you guys are

00:10having a great week great day wherever you are and whatever day it is for you as always it is

00:17friday on the podcast and it is a nice and rainy friday here in seattle which a lot of people

00:23would

00:23expect so feeling that february weather it's not february actually we got one day until february

00:28so february will be next month uh but yeah it's gonna be a good day because we got patrick grimes

00:32with us here on the show from passive investing mastery uh patrick focuses focuses on recession

00:38resilient portfolios he invests in a lot of stuff but specifically in real estate he's into retail

00:44industrial and apartments um so it should be an interesting episode to jump into patrick thanks

00:50for hopping on i'm glad to be here gabe looking forward to the chat it's obviously a topic which

00:54is near and dear to to my my heart and my growth over time nice yeah and before uh you

01:00know before

01:01the show you were mentioning that um you've lost everything at one point and i actually forgot to

01:06mention that we always start with this the show with stories we like to hear how people got to where

01:11they are um so i know you got a good story why don't you take us to the beginning of

01:15your experience

01:15in real estate and just tell us how you got here well i started out as a pretty successful real

01:21estate

01:21mogul no i'm kidding uh yeah i was a hard-working mechanical engineer automation robotics guy

01:29uh and just trying to figure out where to diversify i talked to the founder of the company i was

01:34working

01:35for as a machine design firm and i had a lot of respect for him because he you know i

01:39he played 30

01:40year titan in the high-tech space and i said hey where should i be investing and i thought he

01:46was going to

01:46say stuff like high-tech stocks and you know here's the startups that we know about that you know we

01:53have an insider on which ones you should get into which there were a lot of those because we were

01:58doing robotics for new technologies um but he said no i i make my money in high tech and i

02:04i put it into

02:05other things specifically a lot of real estate um and i said wow it's really cool he said his only

02:12regret

02:13i was not investing more sooner so that's what got me on the path not that i was very efficient

02:18right

02:18off the gate right i um i got head over my skis pretty quick trying to get rich quick and

02:24double

02:24and triple my money and this was back before the subprime orange collapse so i i got into a pre

02:30-development

02:31fairly speculative you know personally guaranteed on a loan thought i was king of the world and i toppled

02:38pretty quick everything fell upside down overnight and uh took me a couple years to even exit that

02:45and then several years after that to recover financially so that was my my uh success story

02:53prodigy child type you know beginnings but it doesn't end there i mean since then you got i mean

02:59you're very successful now but those uh um you know the start the personal guarantees on loans i have

03:05heard that story before and it's one of the the uh um pitfalls that i always like if you don't

03:12understand how real estate works it's one of the things that can get you very quickly um you know

03:17you always want to not put a personal guarantee on a loan for everybody listening out there and so it

03:21can definitely hit you especially if a downturn happens like in you know 08 um but yeah you're not

03:26alone it's happened to a lot of people unfortunately you had to learn the lesson the hard way but

03:29like we say on the show all lessons they uh they lead to something better which it did for you

03:34so

03:34once you you learn that lesson the hard way you uh you got stuck with uh you said it was

03:39a development

03:39deal yeah pre-development so you know it's yeah really gamble yeah um so what happened after that

03:49so you uh you invested in it it sounds like you did exit that deal actually i i um i

03:55paid for quite

03:56some time i wasn't my note got bought and sold lots and then i ended up did settle through um

04:02in agreement to go through foreclosure if they didn't come after me and but then they they wrote

04:07off the debt as forgiveness which meant i had to pay income uh tax as ordinary income for their

04:13forgiven debt so it you know there's no rest of the wicked here it didn't really and i didn't and

04:19i

04:19didn't really even understand that part like i had an attorney help me even hunt down the lender but

04:24um nobody told me that i was going to be footing that income tax uh for the write-off the

04:30bank's

04:30write-off but that is a real thing still today people don't realize that i wow i i did not

04:35know

04:35that was a thing that's interesting yeah um so yeah that is that is quite the way yeah that is

04:43quite the introduction to real estate i'm sure that put you a little bit of a sour taste in your

04:47mouth

04:48but you're still in it you're still in the game um tell us how it went yeah sorry go ahead

04:53yeah tell

04:54us how it's gone since then uh you know it took me a couple years i i wasn't planning to

04:59get

04:59immediately back into real estate i i didn't even think about it i just doubled down in my career

05:02i the whole time i was still you know successful engineer i loved loved engineering still to this

05:07day i miss it right i'm not doing it anymore but uh i got a master's in engineering and i

05:15got a

05:15master's i got a business administration degree and i started climbing that corporate ladder and i

05:21switched to a smaller company where i could have a higher position and started doing some real cool

05:26stuff i mean i was doing satellite solar cells and i was you know doing ablation catheters in the

05:32heart and and uh heart valves and uh missiles and i was working in tesla i was doing like the

05:39rotor

05:40assembly robotic rotor assembly for the tesla uh and i so i was doing really well but then all of

05:45a

05:45sudden bonuses started coming through and i was like well what am i going to do again and so i

05:48started

05:49following the bread comes with wealthy and you know the the biggest allocation out of this out of you

05:55know equities stock market really tends to begin to be real estate but how do they do it differently

06:00so i kind of learned about recession resilient asset classes and buying things that exist and not

06:06speculative things that don't yet and buying things for cash flow um so i started building a

06:11single family portfolio uh in not california where i was at but in texas where you know things

06:16were much more resilient that got i was successful but i was trading so much of my time away

06:22for my family friends and hobbies that i when i met my suit my wanted to be wife um i

06:29had to take a

06:30break you know i kind of revisited it after we got married decided to trade up to apartments where i

06:37could partner with others and reach further into different markets and scale where we could have

06:43on-site property management maintenance and that's you know that's that that that leveraging others

06:48and partners was the first time i'd done that uh you know i've been more partnerships than i wish i

06:53had

06:53and done more deals than i wish i had but at the net you know you don't you don't win

06:58without getting

06:59out there and fighting and learning your lessons but i on the other side of it i learned how to

07:05do it

07:05in real estate and i learned how to do it in legal industry and the medical industry and i've got

07:11precious metals and energy now you know i've built a great diversified portfolio for myself and our

07:18investors and you know it it'll live out in some of these market swings so that's been really the

07:25progression and of our my my investing journey and our focus today nice so it's interesting you said uh

07:33when you got back into real estate you know you kind of took yourself out of it for a little

07:38while

07:38and then you got your bonuses at tesla the satellite solar cells by the way that sounds really

07:42interesting having a that does sound interesting um it it is interesting that you when you were getting

07:52back into it you wanted to do recession resistant asset classes but you mentioned single family as

07:57where you went which is not a recession resistant asset class and so what uh take us back to that

08:03um

08:04that research that you did and what what kind of popped out as why did you start with single

08:08family why didn't you go into something that is you know traditionally considered recession resistant

08:14well so recession resilient um or is it's kind of a matter of perspective right and it depends on

08:21what are we talking about are we talking about like broader market fluctuations in the stock market

08:26does does uh multifamily ride the same curve are they correlated right or does single family or

08:32multifamily ride the same curve are they correlated and they're not they don't tend to drive on the

08:37same market fundamentals up and down together and so you can say if the recession means the stock market

08:42then it's non-correlated it doesn't necessarily mean it doesn't have its own recessions but if you look

08:48throughout the united states and this is where i answer your question gabe because different markets

08:53have a latent exposure to downturns and they recover quickly and i didn't realize that and so i don't do

09:01a lot

09:02of work in the coastal states you know i don't do a lot of work in the southeastern and and

09:06florida

09:06or in states which have traditionally had really poor recovery like in phoenix and tucson where it

09:13took 14 years right even though and the reason why is because if you look at other locations the reason

09:18why i chose houston to get back into it's because if you plot the data at the federal reserve you

09:24can see

09:24how the housing bust happened and in most markets you saw dramatic dip down in some it was 14 years

09:31to recover to break even but in places like houston for the you know three bedroom two bath

09:36the longest running highest appreciating most stable asset class and and and non-commercial real estate

09:44it literally spent four quarters wavering slightly four quarters later and started taking back up again

09:51and why is that why did houston outperform in residential three bedroom two bath more so than other markets

09:58well you got to look at the fundamentals behind what was going on in houston it has energy it has

10:03medical it has logistics it has and high tech it has all of these markets right that don't ride on

10:09the

10:09same market fundamentals that aren't driven by hospitality like some of the bigger states that

10:15have cash flowing capabilities so people can keep their properties afloat and that have landlord

10:22friendly and business friendly laws so in downturns they tend to have an ingress where they bring in

10:29people fleeing other places that aren't as friendly so you gotta not just say like you're pointing out

10:35accurately oh it's not recession resilient well and a macro but in a micro sense you can actually

10:41spearfish yourself into a really secure micro micro type of asset within a specific region with a

10:48specific business plan cash flowing existing you know just buy it and then renovate and refine repeat

10:55that you can actually build and every single kind of asset class out there whether it's doing an

11:02energy you could be wildcat drilling and losing it all you know whether it's the angel or venture

11:07investing you can be gambling on startups lose it all i saw that happen a lot while i was an

11:11engineer

11:11because i was doing robotics and legal you could be investing in highly speculative cases

11:18or in medical you could be investing in highly new new technologies or you can invest when things

11:24are stable they're resilient and you they've gone far enough along to where you can underwrite

11:29and make a reasonable allocation at a lower risk with a lot of uh insulation for market volatility

11:37so so by recession resilient you were more um you weren't talking about asset class you were talking

11:42about location you when you did your original research you were looking at locations that

11:47performed well historically um in recessions versus the asset class itself is that accurate

11:53both yeah it's both the asset class so the specifically you're asking me why did i do single

12:00family well i did single family three bedroom two bath in houston because the combination the

12:05combination of those two produced one of the most resilient asset class resilient investments in

12:12america during the subprime orange collapse was three bedroom two bath in houston right

12:16interesting cool um so i mean it sounds like you have a lot of interest in in doing market research

12:23which is one of the most important steps in deciding or in in having a successful investment

12:29um and i've learned that the hard way and investing in areas that uh seem seem great but uh down

12:35if you

12:35don't do enough due diligence you know under the surface things can come up to bite you so let's talk

12:40about today's market um there is you know there's a lot of i won't say i don't know about volatility

12:46but there is uh questions about what will happen in the future interest rates etc so what what do you

12:51see uh as the opportunity being you know in today's on the ground market for real estate

12:57well so single families did pretty well in this last uh high interest rate hike and eviction

13:04moratorium at net compared to what we've seen in past cycles single family has not taken as colossal

13:11hit right and so it's made it's remained relatively strong compared to other recessions that we've seen

13:17so i don't see a huge opportunity and of course you got to go by a specific region and market

13:23circumstance but but i don't see a huge opportunity there i think a lot of the returns have been priced

13:28out people are still assessing it as lower risk um what we do see is in commercial real estate and

13:36that's why diversification even within asset classes and outside of asset classes is important

13:41commercial real estate whether it be you know single family whether it be a multi-family or an office

13:48like a colossal hit but commercial real estate overall dropped around the country 10 20 30 percent

13:54and valuations and because of the scale that's significant discounted buys and with interest

14:01rates really really high and banks on the sidelines because they're not getting paid off and they're

14:07having liquidity issues that you can lend high so you can either buy low or you can lend at really

14:15high

14:15rates and so that's why i think in commercial real estate we set up two opportunistic funds you know

14:21one which is a income funds you know that produces that that lends debt to commercial small balance

14:28commercial real estate operators kind of the forgotten ones that are struggling to get debt

14:32usually they can get it at six seven eight percent now it's like 10 11 12 percent that's incredible return

14:38for a low 60 65 percent loan to value stabilized uh commercial building industrial um in fact industrial

14:48right now has the lowest occupancy in the united states so really incredible and then or you can

14:55you can lend on it or you can buy it buy at incredible discounts as well so a lot of

15:00opportunities in those

15:01two and that's why we are currently lending and acquiring and an income and an acquisitions fund

15:08on the acquisition side what um what are you guys looking at what asset class and then what locations

15:15well so we're staying away from multifamily so far not deliberately but we're staying away from

15:21multifamily because we have not found they don't quite pencil yet um where there's a lot more let me

15:28just say there's a lot more attractive investments and industrial where even pre-covid we saw a bunch of

15:35reshoring through covid we saw tremendous reshoring and now with this tariff this tariff battle happening

15:42it's incredible uh the the reshoring that's happening so the lowest occupancy uh vacancy across commercial

15:50real estate asset classes is currently in industrial in certain markets where you can't it's it's it's like

15:57i said it's business friendly there's plenty of labor to facilitate so industrial warehousing

16:03manufacturing and through covid we saw a lot of distress in the retail shopping centers and so small

16:11strip centers in certain demographic areas where they're not using amazon and they're using a lot

16:16of cash still and so those demographic areas that where you see just incredible the mom-and-pop type

16:21owned properties that that are just looking for an out they're just kind of bad battered and beaten

16:26they're tired of it they just want to get it a reasonable out at reasonable exit we've been able to

16:31step in and and pick these properties up for incredible credible credible buys and so we haven't found

16:38any multi-family yet in that specific uh fine we haven't found that pencils anywhere near the other

16:44asset classes and we haven't found any office an office man it's like a it's still still it's a hot

16:51knife

16:52still falling um and it's just hard for me as an engineer to calculate any kind of a knowable risk

16:59to that one i just uh i just can't seem to compute that one so i'm we're gonna just let

17:05that let that

17:06sleeping dog settle until we can figure out where the bottom is wait to see what happens yeah yeah it's

17:13funny i'm actually i'm under contract to buy my first retail property and we got a good deal on

17:17indian so we're we're closing that right now so it should be interesting to see how that goes

17:21on the industrial yeah yeah yeah we're excited um on the industrial side i have a partner who

17:27uh that's pretty much all he does is industrial and he absolutely loves the asset class the thing

17:32that i've heard against um i don't buy industrial i i don't know enough about it to really be dangerous

17:38but um the thing the argument i've heard against in industrial um you know occupancy is really high

17:45right now but the tariff action and all the back the onshoring um people are saying that that is not

17:51it's not something that you can uh plan long term on because changes in administration changes in

17:59policy could uh could reverse that trend do you see that happening or uh obviously you guys are

18:05bullish on on industrial so tell us uh what you see for you know five to ten years

18:11so like i said even pre-covid right we saw a lot of reshoring during covid we saw tremendous

18:18reshoring there's been a fundamental shift in the way that the a lot of the companies in the united

18:25states perceive offshoring they offshore 100 of their manufacturing supply chain but now they've

18:32realized man we've got to build warehousing we've got to we've got to build service support you know

18:38we got to build necessary and critical infrastructure stateside and they've they've switched their

18:43calculus so those are long-term things aside from the um the terror battle that's happening but uh

18:51in general america as an overall macroeconomic change is becoming more is is shifting towards

18:59doing more manufacturing domestically and that is a that has been progression that's happening for some

19:05time and we're realizing that we cannot rely on the cheaper countries as much as we could before and

19:11there's a significant national security risk with you know continuing to offshore so much to china

19:16and so there has been huge moves to move things domestically and into the latin american countries

19:23so you know over the course of the last 10 years so and you also got to keep in mind

19:28we're opportunistic

19:29buyers so we're not out there buying properties on the hairy edge of profitability and betting on future

19:36appreciation we're out there buying assets like i said for mom and pause those individuals that

19:41were holding that struggled you know for one other reason maybe it wasn't this property that they

19:46struggled with but they had large portfolio maybe in maybe multifamily maybe an office it's just that

19:51it just really hurt them and they needed to exit or they're tired or they're they inherited it uh and

19:56now they don't know how to operate it and they've struggled we're buying those opportunistic type it's an

20:02opportunistic fund so we're buying right rather than hoping and praying i hoped and prayed for

20:08appreciation back in 2006 and 7 and that didn't work out for me so that's really the key i think

20:16is

20:16making sure you buy right but macroeconomically i was gonna say it doesn't matter what's your what

20:21your strategy is if you get real estate at the right price it's really hard uh to lose and so

20:26that that

20:26should be everyone's first priority is uh making sure that you buy right um so i i just took a

20:33peek at

20:33the clock it looks like we have run it down so it's time to jump into the quick question round

20:37you

20:37ready ready go for it surprise question round you didn't warn me about this so here we go exactly

20:44all right it starts with education it could be any form could be a book you've read conference you've

20:47gone to mentorship program you've been a part of i just need uh two recommendations one for general

20:52life wisdom and then one for real estate let's see so uh you know i'm sure on a personal note

21:02i have seen throughout especially with being connected to so many you know real estate

21:07investors over the course of the last couple years and just you know saw their portfolios

21:11just decimated i mean i went through that in 2009 and 10 and i've seen a lot of people all

21:16in

21:16commercial real estate uh i've seen a lot of tough you know challenges and people struggling a lot of

21:23divorce frankly surrounding me and so i um i started reading this book called um bulletproof husband

21:32and following this group and i gotta say i just was so impressed i run every day i listen to

21:39podcasts

21:39i listen to webinars i listen to ted talks and a ton of audiobooks and to self-help and

21:46i thought well you know what i'm gonna get in front of this here and i'm gonna start i'm gonna

21:50start self-helping me as my role and i've got a three-year-old i got a wife and i

21:55want to be a

21:55better husband and so i started that maybe people are way ahead of me and they're like i've been

22:00reading marriage books for years but i haven't so so i got that a really cool book um and i

22:06think

22:06that's just general wisdom and something new uh that i've been attacking for the last couple quarters

22:13recommended me by a bunch of people um that i respect um and uh the other book for i'm so

22:19i i

22:20because you said i could say when i actually give this book away for free um and it's one that

22:24i i

22:25collaborated with some really cool people on it's called lessons from thought leaders and i i tell my

22:30whole journey and i've got some other people that can true i wrote a whole chapter a couple other

22:35people wrote a chapter phil consley gets harris a deaf leopard there's a navy seal here next to me

22:39on the cover um eastman tom ziggler dennis waitley brian tracy i mean such an incredible group of

22:46people i was just like mind blown just uh excited to be involved with these guys but i tell my

22:52whole

22:52journey from high tech to losing all single family losing time for my family friends obby's and then

22:57getting ready trading up to larger apartments and then getting into energy legal medical and if it

23:03helps to inspire anybody along their way you can go to our website passive investing mastery

23:09passive investing and mastery.com slash book slash book and if you got to put gabe's name or you got

23:15to

23:15put the name of the podcast in there because we don't give it to people that are randoms so as

23:21long as

23:21you put somebody in the promo code that we recognize putting gabe put in the real estate um podcast

23:27and uh we'll either let you download pdf or we'll send you a signed copy it's pretty cool and

23:33if it helps somebody along their journey that's out there hardworking professional like i was

23:39get kind of some aha moments about ways in which they can grow more financial security through

23:45diversifying into non-correlated alternative investments um so enough of a thanks to me and

23:50happy to chat with you if you felt that way. Awesome yeah and i will put that link in the

23:54show notes

23:55we'll talk about this at the end as well but i will make sure to put that link down there

23:58so

23:58um you guys can stay tuned for that um uh that was a good recommendation on bulletproof husband i

24:04have not uh i'm huge on you know all types of those kind of self-help books um marriage books

24:09are

24:09great and bulletproof husband is one i have not heard i might have to pick that one up um next

24:15question we're going to move on to your younger self let's go back to the patrick who was uh still

24:21a mechanical engineer he was just getting his first job um i can't remember what you said you were doing

24:26but uh back in the day when he got that first job as a mechanical engineer go back to him

24:30look him in the eye give him one piece of advice moving forward

24:36yeah well you know i was pretty sure i could rule the world and i was a great engineer i

24:41could be a

24:41great everything else at the same time and i think what i would tell myself is is learn to partner

24:48and

24:48get under you know partner and and and lead and join others that have been down the road

24:54um that you're going down and don't try to control everything but join you know with a proven

25:03partner and take less of the deal i i would probably say that because when i finally learned how to

25:08do

25:08that 10 15 20 years later is when i finally started being able to enjoy my life and build more

25:15security

25:15at the same time yeah yeah and that that uh sentiment has been echoed so many times um you know

25:22your episode

25:22like 600 something and so many investors who have come on here have have um mentioned that they wish they

25:28would

25:28have started uh by mentorship through some type it could be a direct mentorship where you you meet with somebody

25:35who's actually done it and they teach you how to do what you're trying to do or it could be

25:39indirect where you

25:40invest alongside them um you take maybe maybe you're an lp you invest in a gp's uh deal and learn

25:47how they're running the deal learn the communications that they give to their limited partners all that

25:51kind of thing so um learning for people from people who have already gone down the path that you want

25:56to go down is so important it's uh it it's i mean i wish i would have done done it

26:01sooner just like

26:01you i started um i think i took a course and then i just you know went off and did

26:05it made so many

26:06mistakes and i could have uh you know cut that short that path a little shorter had i invested in

26:12a in

26:12a mentorship program or something like that um all right next question is about finding deals it all

26:19starts with getting in contact with the seller and pending that purchase agreement so what is your

26:23favorite way to generate leads and find new deals

26:31right now in our acquisitions fund it is entirely direct to owner uh and even in the small

26:36balance commercial real estate space uh and even though oftentimes a broker does get involved

26:42after the fact um with the value so um with the value so compressed in commercial real estate

26:51brokers are out there starving transactions are low and there's not the heyday so they're

26:59bedazzling owners by telling them they can sell their building at these incredible prices

27:04that are so far off the market um and then locking up these properties by the time we get involved

27:11and

27:11you know it's like the uh broker trying to save face and beat us up while beating the owner down

27:20with his hat between areas you know his tail between his legs that unfortunately once the brokers have

27:27you know whispered their their promises it's hard to come back from that so what we've actually

27:33found is going direct to owner and there's a bunch of bunch of different tools the whole staff of

27:38people and overseas with a bunch of tools we use to find them and there's a bunch of different methods

27:45that we're using by having that initial conversation with the owner figuring out where they're at is

27:51there an urgency to exit right or can they write this out and if there is floating some numbers out

27:58there to just see are we in the same ballpark and to assess all of that before we go to

28:04brokers and

28:04brokers are not bad but we made a lot more progress um filtering out and now obviously we

28:11we want to close with a broker but we made a lot more progress um finding those deals and covering

28:18those

28:19rocks finding that that start with the owner uh and close with the broker then finding those brokers

28:25who are putting these pretty marketing materials together and then go looking like promising

28:29outlandish prices and fanning them out to the markets in a desperate attempt to try and get

28:34the highest offer so that's been our take for the last three years yeah yeah i'm uh i'm in the

28:41same

28:42boat i love direct to seller going off market finding deals myself um because just like you said

28:46i just brokers the prices you guys are putting out there i'm telling you i don't know who's buying

28:51these deals but there's just way too much you know i i don't know i buy mobile home parks rv

28:55parks

28:55self-storage facilities and the uh cap rates that they're putting these out as uh for the offer

29:00is just just nowhere near what i would be uh interested in so yeah off market is definitely

29:05my favorite way um on when you go off market what's the the medium that you guys enjoy using or

29:11have the most success with um cold calling uh mailers texts what's the way that you like to do it

29:17combination of all those but my acquisition guy would kill me if i if i actually went into the

29:21specifics of what we're doing because we are doing some things that we do have some ai generated tools

29:26and we are doing some things that are wholly unique that i haven't seen done so far okay cool all

29:33right

29:33uh next question is about the u.s it's a big place there is a lot of opportunity out there

29:37give me the

29:38single metro you're most excited about investing in today

29:45not i'm not about a single metro i mean because

29:49they all have their strengths and weaknesses and my whole theory is on diversification

29:53and gross geographics and assets and and um and industries so um i mean obviously i don't like

30:01high concentrations of i i don't i don't like florida um insurance issues i've had you know i think

30:10the midwest did do fairly well and you know the central states i i would say actually the probably

30:18especially now today texas is still one of the best markets atlanta took a huge dive um they were

30:24a great market before but uh we saw the government take a turn against um apartment buildings of

30:32owners ability to even collect rents with 18 months um through the eviction moratorium from the time

30:38they stopped paying to evict in some major counties in atlanta metro so uh man i'd say

30:44some specific locations uh in the midwest and texas are probably up there but i'm very much a

30:54hyper focused in you know much smaller uh areas and we build our portfolios based on a you know

31:00fairly broad diversification strategy so i'd say don't get hyper focused on any particular one market

31:06because just like what we saw with atlanta um where it was a long-standing land landlord friendly

31:12location that's completely flipped upside down and now there's blood and carnage all over that all

31:19over the market because of that um and texas as well we we just saw like hsa um get blown

31:26up the tax

31:27the tax incentives for affordable housing out there for low-income housing um get blown up and

31:33basically you know tens of thousands of units going under because of that because there was a

31:39political change and they decided to just make retroactively and change to tax credits which

31:44so it every every market has that no matter how great it looks today can shift and that's why i

31:53think

31:53it's more important to look for a well diversified portfolio diversification is great i will say on the

31:59flip side of that it does you do get economies of scale when you do focus down in on a

32:04specific

32:04economy a specific metro um so if you guys are out there and you're just starting your portfolio i

32:09would suggest actually focusing in on a metro because then you can move faster you can build

32:14your team you you understand the resources available to you in that location um and then once you start

32:19to grow diversification makes a lot more sense but um so if you were to you know somebody let's say

32:24they're just starting out maybe they have one or two um uh investment uh properties in their

32:29portfolio already uh what what metro would you suggest or even somebody who has none what what metro would

32:35you suggest they start with what asset class i mean what what type of real estate asset are we talking

32:41about um i mean you it's dealer's choice you choose um you know i i'd probably go for dallas or

32:52houston

32:53right now um because they have still chosen to be pretty strong i'd stay away from um i mean i

33:01i

33:02i there's some really strong some of our stronger assets are kind of between uh dallas and fort worth

33:08and between those two um there are some strong assets we have in the energy corridor and houston you

33:13said between dallas and fort worth those are essentially the same city well yeah well i mean there is they

33:20are in two different places and they're you know there's a connector and those are that that's what

33:23we see is a lot strong build up between okay cool so you're you're talking like right down the center

33:30of dfw um we actually we're just selling out of dfw right now um it's great great metro um but

33:36you're

33:37talking about just like that little hill area right between that's where you guys like are trying to

33:41invest in well i'm saying if you're going to choose a you know one that's been really strong

33:46or two that's been really strong those two have been very strong we're seeing occupancies

33:5195 97 percent in those two specific areas one uh in that dallas fort worth in between and then

33:59and the energy corridor of houston and those are some of the the uh man it's it's hard it's like

34:04we're

34:04battling off residents like right now it's like great it's a really strong place to be and

34:08oftentimes yeah it's the place you want to be right absolutely all right uh second to last question

34:14this is about lessons learned um not every deal we get into goes the way we expect it in fact

34:19pretty

34:19much every time something goes wrong and that's when we get to learn a lesson so what was the deal

34:23that went a little bit sideways for you and then what was the lesson you pulled from it um

34:32well i mean i already talked about the biggest one and which was you know so primaries collapse and

34:37um not buying for cash flow and over leveraging and not buying a recession at markets and then i talked

34:44about the second one which was you know the challenges associated with commercial real estate

34:49you know that um losing a lot of value through that time um those are probably the two biggest

34:56you know challenges that i've had and why i'm in a lot of industries that are non-correlated to real

35:02estate because the biggest lesson was learning how to invest in other markets that don't aren't

35:06driven by the same market fundamentals awesome so the yeah so the lesson that you pulled from

35:12from that experience was diversification was putting your eggs in multiple baskets so that

35:16i've won basket fell you still got the two over here right awesome all right that leads us to the

35:23very last question this is for the listeners you've given us a lot to think about i'm sure people want

35:27to reach out get in contact with you this is a two-parter where can they find you and then

35:31what can

35:31they expect when they reach out yeah so passiveinvestingmastery.com has our website

35:39passiveinvestingmastery.com we do offer investments in commercial debt and commercial equity and we

35:45have litigation finance a legal fund and medical receivables which help to provide a well-balanced

35:51you know non-correlated portfolio that'll it was an aggregate gives you quite pretty strong resilient

35:57portfolio but also we have an alternative investing mastery series which you can register for there

36:03just on our home page which every week or two i host completely different set of panelists

36:09on completely different asset classes and i'd love to have you on gabe sometime because it sounds like

36:14you're doing some pretty cool stuff and but we've we've done everything from forex to gold mining to

36:19timberland to we just did one on cannabis which was you know very interesting um and we've done every

36:26kind of real estate imaginal as well as well as bourbon barrel cask investing in pilot education and

36:32buying a plane for cash flow and uh laundromat so it's about everything you can think of but i'm

36:36when i was an engineer i knew about the 50 stocks i could invest in crypto and startups i had

36:41no idea

36:42that there were 50 plus non-correlated alternative investment strategies that are far more resilient

36:48higher risk adjusted returns and build true stability and security in a portfolio and i'm out there trying

36:54to share those agnostically with everyone and getting panels of people together and talk about them

36:59and so that's what our alternative investing mastery series is and i recommend everybody register but

37:05set up a meeting with me i mean i i love to chat with people if we're not the right

37:09stop for you

37:09we've got a rolodex of a bunch of different sponsors doing all kinds of different stuff and

37:14we can get you pointed in the right direction awesome i will put uh that link in the show notes

37:19so

37:20if you guys want to reach out to patrick all you got to do is click the little more in

37:23the

37:23description it'll pull down that full description and in there you can find patrick's links

37:28all right man that wraps it up thank you very much for hopping on the show yeah glad to be

37:33here gabe

37:34thanks for having me absolutely for everybody who's with us today thank you guys for showing up you are

37:39the reason we do this so if you guys have any questions reach out to me gabe at the realestate

37:43investing club.com if you guys want to support the show just leave us a comment review anything like

37:47that other than that i hope you guys have a great week keep rocking real estate and i look forward

37:52to

37:52seeing you on the next episode

Category

Transcript

Comments

Recommended