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Exploring Life & Business with Patrick Grimes of Invest on Main Street

Exploring Life & Business with Patrick Grimes of Invest on Main Street

Read the Full Interview:

Today we’d like to introduce you to Patrick Grimes.

Alright, so thank you so much for sharing your story and insight with our readers. To kick things off, can you tell us a bit about how you got started?

I was fortunate to be raised in a middle-class family of educators and pastors who valued both the pursuit of knowledge and a strong moral and ethical framework for life. We moved a lot while my father served in the Air Force. I was born in Italy. Then I spent most of my formative years in the Sierra Nevada mountains near Yosemite National Park. Most of my days I go hiking, climbing, river rafting, skiing, etc., which inspired my lifelong love of the outdoors.

In 2006, I graduated with a BS in mechanical engineering, and while I loved its cognitive and creative challenges, it was extremely stressful work in a very volatile market. I was working myself to death. So, I saved up and invested in a project buying up lots in pre-development. This venture did not go as planned. I’m glad to say that was the only deal I ever lost money on.

After traveling the world for a spiritual pilgrimage. Having experienced first-hand the devastation of the housing crash and having seen my stocks gutted by the volatility of the market, I started searching for lower-risk investment strategies. I wanted to get back into real estate and uncover how to invest successfully—not speculate. I researched, listened to audiobooks on my daily morning runs, met investors, and learned about markets and asset classes. I wanted to make calculated moves for higher, risk-adjusted returns and not risk it all betting large again. I learned that income-generating rental properties were an inflation hedge, that some markets had recession-resilient employment diversification, and that there were asset types that held value in downturns. I started buying distressed properties in Houston. I found existing properties performing below their immediate comparable and estimated renovation costs to lift them to market

Unexpectedly one day, the most adorable and exciting woman I had ever met showed up, my soon-to-be wife. She was working toward her master’s at CalArts, smart as a whip, sweet as can be, and a force to be reckoned with. I realized that I needed my nights and weekends back. She sat with me the day closed the refinance of my last single-family deal, and I pressed the pause button on real estate.

I was now ready to pick up real estate again, but not a single family. The allure of multifamily real estate was now crystal clear: wild tax advantages, significantly reduced investor risk, and numerous operational efficiencies, with managers and maintenance techs living on-site looking after the day-to-day. I slowly got my wife on board with our plan for acquiring investors and leverage for multi-million-dollar commercial 80 to 300-unit apartment communities with the goal of bringing other passive investors on the journey with us to achieving passive cash flow and financial freedom. With her at my side, we started working hard, traveling to explore markets, meeting brokers, and building a team. My wife produced short 1-Min-to-Cash Flow passive investor education videos (80 so far). We analyzed hundreds of deals, but after my experience in the last downturn, I wasn’t in a rush. We stuck to our very specific, conservative criteria.

It took a little over a year to get into our first multifamily deal. When COVID-19 hit, the debt markets dried up and, along with it, our ability to acquire. Meanwhile, the engineering business didn’t have a single booking for Q2. It was an uncertain time, but in Q3, I was able to break into automated COVID test kit assembly equipment and turned 2020into a personal record year. With the nation under COVID quarantine, Burbank boarded up and on mandatory curfew due to looting coinciding with the Black Lives Matter protests, and smoke and ash from a horrible fire season descending into our home, my wife, the dreamer, explained how she imagined us living in Hawaii.

It wasn’t until Q4 2020 that lenders eased their requirements and opportunities started to come from distressed apartment owners. At that point, we had the pieces in place and hit the ground running. With our investing partners, we closed on our first apartment community in South Carolina. A distressed owner with cancer sold a beautiful 86-unit complex built in 2009 at a discount.

Today, we are very excited about the distributions we are providing our investment partners, from controlling ownership over a $150M+ portfolio, consisting of 2,000+ units in apartment communities located in emerging markets across the southeastern US and Texas. (These are excerpts from my book so please do edits if necessary)

We all face challenges, but looking back would you describe it as a relatively smooth road?

In 2007 I invested in a project buying up lots in pre-development. The developer had a perfect track record according to my research, and this was 2007 when the market was going to go up forever. Right? Then, 2008 happened. I lost everything. Not only that, but the loans were recourse loans, guaranteed by me personally. The banks threatened to come after me and everything I owned. Determined to not go bankrupt, I worked with an attorney and negotiated a settlement. But, in the end, the banks wrote off the loss as debt forgiveness, which is taxable. So, adding insult to injury, I was paying that “forgiveness” back to Uncle Sam. The foreclosure left my credit in tatters. It was a nightmare and an embarrassing hole to crawl out of. I’m glad to say that was the only deal I ever lost money on. I didn’t realize at the time that I was speculating, not investing. It was gambling, placing a bet on a “hope” that there would be a market for my land on the other side, that I could secure financing to build, and that once I built, somebody would want to rent it. None of that came true.

Today, I invest in income-producing apartments that are stabilized from day one. But back in 2008, I still had a lot to learn.

As you know, we’re big fans of Invest on Main Street. For our readers who might not be as familiar what can you tell them about the brand?

Patrick is a design engineer and CEO and Founder of Invest on Main Street, LLC. His real estate holdings include general partner ownership of a multifamily and single-family real estate portfolio valued at over $372M, including 3,000+ units across the southeastern United States and Texas.

Patrick has been active in real estate investment since 2007, including purchasing land and distressed assets, renovating them, and stabilizing them for long-term cash flow. To scale his real estate portfolio, Patrick moved from single-family to multifamily investing and founded Invest on Main Street, a private equity firm specializing in multifamily value-add projects in emerging markets. The firm’s mission is to help investors build wealth through tax-advantaged cash flow and appreciation while limiting their exposure to market volatility and inflation. All the while, providing a safer, cleaner, and improved living experience for the residents.

Patrick was inducted into the Forbes Real Estate Council, an invitation-only community of executives that meet to discuss the latest topics and contribute to Forbes thought leadership articles on investing and commercial real estate.

He co-authored an Amazon #1 best-selling book, Persistence, Pivots and Game Changers, Turning Challenges into Opportunities. His co-authors included the lead guitarist of Def Leppard, host of The Real Estate Guys Radio Show, NBA/NFL championship coaches/players, and other entrepreneurs and actors.

Through Patrick’s company, Protonation Systems, LLC, he contracts with machine design firms to conceptualize, design, and build one-of-a-kind manufacturing automation and robotic systems primarily for the medical device, EV, and aerospace industries.

Patrick holds a BS in Mechanical Engineering from the University of the Pacific and an MBA and a Master of Science in Engineering from San Jose State University.

A native Californian, Patrick is an avid traveler, mountaineer, kite surfer, and adventure sports enthusiast. He currently lives with his wife in Honolulu, Hawaii.

Patrick is the CEO and Founder of Invest on Main Street with holdings that include general partner ownership of a multifamily real estate portfolio valued at over $372M, including 3,000+ units across the southeastern United States and Texas.

Patrick has been active in real estate investment since 2007, including purchasing land and distressed assets, renovating them, and stabilizing them for long-term cash flow. Patrick founded Invest on Main Street to help investors build wealth through tax-advantaged cash flow and appreciation while limiting their exposure to market volatility and inflation. All the while, providing a safer, cleaner, and improved living experience for the residents.

On the Forbes Real Estate Council, the authors thought leadership articles and contribute to expert panels for Forbes on investing and commercial real estate

He co-authored an Amazon #1 bestselling book, Persistence, Pivots and Game Changers, Turning Challenges into Opportunities.

Patrick holds a BS in Mechanical Engineering and an MBA and a Master of Science in Engineering.

When not doing real estate, his company, Protonation Systems, LLC, contracts the design and build of one-of-a-kind manufacturing automation and robotic systems. He is also an avid traveler, mountaineer, kite surfer, and adventure sports enthusiast.

What does success mean to you?

After all, I’ve been through, I have a passion for guiding busy professionals—because I am one. High performers are becoming disillusioned. They can see they are putting their retirement at risk in startups that often fail or in stocks and qualified retirement plans that are subject to tremendous market volatility with low returns further affected by inflation and heavily taxed. They are tired of living in fear that the morning news will report another stock market crash, inflation spike, or looming recession. And they are disheartened that their basis will dwindle to nothing by the time they pass. I want to help these individuals diversify into a legacy wealth-building investment vehicle with enduring cash flow. In multifamily existing construction and workforce housing in emerging markets, I can provide an investment vehicle that can take years off their working life. I also have a passion for helping busy single-family investors deal with property managers and tenants, because I’ve done that. I’d like to help them transition into a passive position with very sophisticated sponsors and property managers at the helm who have proven track records of success. I offer investments that do not require risking it all in recourse loans and where the investors’ only heavy lifting is depositing distribution checks

I would never have made it to where I am today by relying on standard retirement and investment vehicles. Investing in a single-family would have taken decades before I could step away from my career, and then I’d still have to manage a scattered rental portfolio. Every time I do a deal now, I bring investors with me to realize 3-5 more years of freedom. With a portfolio of investments in multifamily syndications, income, and net worth growing into retirement, with tax-shielded returns building inside entities with asset protection, I can live a financially secure life and leave a legacy to my loved ones. I hope to act as a guide to show others how to avoid the slower paths I took and be the heroes of their own financial success.

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