In today’s unpredictable economic environment, many investors are searching for ways to make their money work smarter and more safely. If you’ve ever wondered whether there are asset classes beyond the usual stocks, bonds, or even real estate—ones that thrive regardless of the market’s ups and downs—this episode of the Raising Private Money podcast featuring alternative investment specialist Patrick Grimes is for you.
Shattering the Status Quo: Beyond Traditional Investments
Most people’s investment portfolios are riding a rollercoaster, with assets that rise and fall together—think stocks, bonds, real estate, and crypto. According to Patrick Grimes, this herd mentality exposes you to more risk than you might realize. He highlights how even real estate, once considered a “safe bet,” moves in decades-long boom-and-bust cycles.
So what’s the alternative? Patrick Grimes emphasizes the importance of non-correlated asset classes—investments whose value moves independently of mainstream markets. By combining recession-resilient, non-correlated, and AI-insulated assets, you can reduce your portfolio’s overall risk and weather downturns that devastate less diversified investors.
Unlocking Alternative Assets: Litigation Finance and More
One asset class that’s flown under most investors’ radar is litigation finance. Think of it as lending, but instead of loaning money against property, you’re providing capital to law firms or medical practices, secured by their assets and future settlements.
These investments are compelling, Patrick Grimes explains, precisely because their returns are not tied to the same forces driving real estate or equities. If the broader market tanks, your portfolio isn’t automatically dragged down with it.
Other out-of-the-box sectors Patrick Grimes mentions include timberland, CPA firm revenues, energy, or even cash flow from owning airplane leases or bourbon barrel casks. Each operates on unique market fundamentals, offering opportunities for uncorrelated growth and income—key ingredients for true financial security.
Smart Investors Follow the “Playbook”
Patrick Grimes points out that the world’s wealthiest families, hedge funds, and private equity firms have mastered what he calls the “allocation strategy.” Instead of going all-in on real estate or tech, they divide their capital among diverse, recession-resistant, non-correlated assets.
This isn’t about chasing fads. It’s about building resilience. As economic and technological disruption accelerates—think AI sweeping through industries—investors need to ask: Is this asset class at risk of becoming obsolete or easily automated? This kind of critical thinking, Patrick Grimes believes, is what keeps portfolios alive and thriving through the most turbulent times.
How to Get Started (and Avoid Major Mistakes)
Patrick Grimes’ journey wasn’t without setbacks. He lost everything in 2009 and again took hits when interest rates spiked. These experiences taught him to emphasize asset protection and tax efficiency first, before worrying about where to invest.
His advice? Stop thinking you have to pick the single perfect sector. Instead, explore what’s out there, build up your investing knowledge, and diversify into nontraditional assets—ideally, ones with solid legal structures and tax advantages. If you want help learning what’s available and which opportunities might fit your own financial goals, Patrick Grimes recommends participating in an education series or one-on-one discussions to build your plan.
Conclusion: Take Action Before the Next Downturn
Waiting for the next crash to diversify is the riskiest move of all. By embracing strategic diversification—learning about and allocating to assets beyond Wall Street—you can transform your portfolio into something truly resilient. As Patrick Grimes’ story and his actionable frameworks show, it’s never been more vital to rethink what you’re investing in and why.
10 Discussion Questions from this Episode
- What is litigation finance, and how does it differ from more traditional investment strategies like real estate or stocks?
- How does the concept of non-correlation protect investors during market downturns? Can you think of real-world examples where this diversification strategy could have provided security?
- Patrick Grimes emphasizes the importance of building a diversified portfolio across multiple industries. Why do you think so many investors stick to just stocks and bonds?
- Why might legal and medical industries offer more stability and recession resistance compared to sectors like real estate or oil and gas?
- How does Patrick Grimes define “financial security” versus “financial independence” or “financial freedom”? Do you agree with his distinction?
- What role does AI disruption play in Patrick Grimes’s investment strategy for the next five to ten years? How should investors adjust their portfolios to mitigate this risk?
- According to Patrick Grimes, which factors should investors consider before choosing a sector for their investments (excluding due diligence on specific opportunities)?
- Discuss the allocation strategies outlined by Patrick Grimes—with half in traditional investments and half in alternatives. What are the advantages and potential drawbacks of this approach?
- Patrick Grimes mentions missing out on early real estate opportunities as one of his biggest regrets. Have you experienced similar investment regrets or lessons learned?
- After hearing Patrick Grimes’s views on passive alternative investments, how might you start researching or evaluating non-traditional assets for your own portfolio?
Fun facts that were revealed in the episode:
- Litigation Finance as an Asset Class: Most investors haven’t heard of litigation finance, but it operates much like private credit in real estate—only instead of properties, investors lend against legal or medical assets, providing recession-resilient opportunities that don’t move with traditional markets.
- Learning from Loss: Patrick Grimes lost everything in the 2009–2010 real estate collapse, which drove him to adopt robust diversification strategies across multiple non-correlated asset classes, so he’d never be “all in on one asset” again.
- Unique Investment Opportunities: Beyond mainstream assets, Patrick Grimes mentions fascinating alternative options—like investing in timberland, bourbon barrel casks, and even laundromats—each offering unique non-correlated returns for investors looking to diversify in unexpected ways.
Timestamps:
00:00 Private credit in various industries
03:39 Early career and engineering background
6:40 Connect with Patrick Grimes:
https://www.PassiveInvestingMastery.com
08:38 Investment Strategy and Resilience
12:20 Gold and oil market correlation
15:05 Discussing business ownership and strategies
18:33 Strategic decisions in high-interest markets
20:37 Pivoting to Industrial Real Estate
25:35 AI disruption and industry risks
26:34 Evaluating Industry Risks and AI Impact
30:22 Patrick’s journey and book offer
https://www.PassiveInvestingMastery.com/Book
33:27 Get your free investing guide
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Strategic Diversification: How to Find Recession-Proof Investments Outside Traditional Markets with Patrick Grimes
Jay Conner [00:00:02]:
What if your money could be working in assets that don’t move with the market at all? Today’s guest is about to stretch how you think about investing. I’m talking about litigation, finance, medical receivables, and commercial opportunities most investors never even hear about, let alone profit from. Welcome to raising private money. I’m Jay Conner, the private Money Authority, and if you’re serious about finding new, smarter ways to fund your deals and grow your wealth, you’re in the right place. My guest today, Patrick Grimes, is a serial entrepreneur, CEO of Passive Investing Mastery, and a specialist in alternative investments that are designed to produce both growth and cash flow without being tied to traditional markets. He’s built a diversified portfolio across everything from energy to lending to thousands of apartment units. And today, he’s breaking down how everyday investors can access recession-aware opportunities that most people don’t even know exist. So put your seatbelt on because this conversation might completely change how you think about where your money comes from and where it should be going.
Jay Conner [00:01:23]:
In just a moment. You’re going to meet Patrick Grimes right after this.
Narrator [00:01:30]:
If you’re a real estate investor and are wondering how to raise and leverage private money to make more profit on every deal, then you’re in the right place to raise private money. We’ll speak with new and seasoned investors to dissect their deals and extract the best tips and strategies to help you get the money. Because the money comes first. Now here’s your host, Jay Conner.
Jay Conner [00:01:58]:
Patrick, welcome to the show.
Patrick Grimes [00:02:01]:
Glad to be here. Looking forward to the chat. Appreciate the nice intro.
Jay Conner [00:02:05]:
Absolutely. Well, Patrick, let’s go ahead and dive in. Most investors have never heard of this thing that you talk about called litigation finance. So what is it really, and why has it quietly become such a powerful asset class?
Patrick Grimes [00:02:26]:
Well, it’s another private credit strategy similar to. I mean, if you’re people, probably understand real estate more. So if you’re, if you’re lending to a real estate operator so they can buy and improve a property, you’re really just lending against an asset, and you’re doing a finance amount for a collateral value. Well, it turns out you can do that in any industry, like legal or like medical, where there’s operators, maybe they’re attorneys or maybe they’re doctors and they have assets and they have a value and you can finance that with a conservative finance rate against that collateral value and put a lien just like you do on a property and put a lien, a UCC one on a law firm and their assets as well as a Medical practice. And so it’s just the process of using similar private credit skills and knowledge, but across different industries. And the reason why they’re compelling is that they don’t rise and fall together. Real estate doesn’t ride the same underlying fundamentals that the legal industry does or that the medical industry does. And that’s why I think they’re compelling.
Jay Conner [00:03:23]:
That is very interesting. Take us back, Patrick. What was the moment when you realized this is where smart money is going and decided to go all in on these alternative investments?
Patrick Grimes [00:03:39]:
So I mean, it always depends on how far back you want to go. I want to go because, you know, like many of your listeners, I was just a hard-working professional out there. I got a master’s in engineering and an MBA, and I was a machine design, automation, and robotics engineer. And I remember when I first started doing well at the first machine design firm I worked for, I asked one of the founders, whom I had a lot of respect for, this guy. I asked him, Hey, where are you investing? And I thought he was going to say Oh, this startup and that startup. Because we were early on doing work for like Waymo 20 years ago for Intuitive Surgical, the surgical robots, Facebook, Google, Lockheed, Boeing, heart valves for Johnson and Johnson, all these really cool companies. I thought he was going to say, ” Hey, here are the stocks and startups. But he said no.
Patrick Grimes [00:04:27]:
My only regret was not putting more into real estate earlier. So it’s interesting that this tech titan had led me into the alternative space, and that’s actually what really drove me initially.
Jay Conner [00:04:43]:
So, regarding the value and the service that you provide, do you work with investors and show them, teach them, and educate them on how to use these alternative investments?
Patrick Grimes [00:04:59]:
Well, I’m not a licensed financial advisor, attorney, or a cpa. So I can’t give financial, legal, or tax advice, first of all. But throughout my life as a professional engineer and an investor, I’ve had some wins, and I’ve had some losses, and I’ve learned through the ups and downs of markets that you can’t be all in one asset class to have true financial security. You can have financial independence by being a real estate guy until the next cycle. And so I lean more towards the allocation strategies, and I myself was trading the baseball cards of different lesser-known alternative strategies with just a few guys for a long time. Nobody really knew. I didn’t know where to access them. I didn’t even know what they were.
Patrick Grimes [00:05:47]:
Both asset classes, industries, or tax strategies, asset planning, all that stuff. So I built a platform, our passive investing Mastery specifically, just because, man, I wish when I was an engineer, I knew more than just the 50 startups and the 50 stocks. I wish I knew about timberland, investing in places, buying a plane for cash flow, bourbon barrel, cask, legal, medical, investing in CPA firms, and laundromats. I wish I knew about all these different kinds of things that have completely different,t non-correlated returns, so I could build true security. So I built a platform for that to educate on all those. And we also have an equity firm that sponsors deals, and as you mentioned, commercial real estate, the medical industry, and the legal industry, to try and actually be part of the solution in case.
Jay Conner [00:06:40]
One of our listeners has to jump off early. Can we go ahead and give out the URL or the website to your platform so they can learn about that?
Patrick Grimes [00:06:51]:
Yeah, it’s passiveinvestingmastery.com, all spelled out passiveinvestingmastery. com, a little bit long. And on that site, you can register for our Alternative Investing Mastery series. We’ve now had 60 different sessions. They’re biweekly sessions where we bring on panels, a nd we dig into all different kinds of asset classes from metals and minerals to forex, to everything, every kind of real estate you can imagine, so that you can get exposed to these alternatives. And on that site, we also have different opportunities to invest in sol. We also give away a book, which, at the end, I’ll probably, if you allow it, give them the URL for that.
Jay Conner [00:07:31]:
Oh wonderful. Well, thank you for going and sharing that URL. I don’t want anybody to miss out. Why is it that you believe? I think I know one or two of your answers, but I’m going to ask you anyway for the sake of the audience. Why do you believe traditional portfolios, such as stocks and bonds, and maybe even real estate, leave investors more exposed than they realize, in contrast to these other non-traditional assets?
Patrick Grimes [00:08:02]:
Well, it’s interesting. So most of the most popular investment strategies out there are fairly volatile. They undergo large market swings over decades or one to two decades pretty regularly. And if you zoom out, you’re going to see the stock market go like this. You’re going to see technology, you’re going to see real estate go on these one-to-two-decade cycles. You’re going to see oil and gas go very volatile, which is fairly popular. And so the strategy isn’t to be a real estate guy or a stock market guy or a crypto guy or a forex guy. The strategy, if you look at just the playbook, I didn’t invent any of this.
Patrick Grimes [00:08:38]:
But the hedge funds and the sovereign funds, private equity groups, family offices- you look at their playbook; they have an allocation strategy, right? And so they’re saying I get this sliver here, sliver here, sliver here. But our thesis really is the Venn diagram of three things. It’s what is recession-resilient? I’m going to take my portfolio, and I’m going to invest somewhere else. What is the recession-resilient next piece that we can invest in so that we’re strategic, and then what is non-correlated? Now that the next piece, non-correlated means, can’t rise and fall together. I can’t have my whole portfolio rising and falling on interest rates, or on the stock market, or on commodities. I got to have something that is up while the others are down. So, non-correlated, we call that which you find legal, medical, real estate, oil and gas, and then insulation from AI. Resilience is really a hyper focus for us now because that is triggering the most uncertainty and the fundamentals of most investments out there.
Patrick Grimes [00:09:37]:
So, where can we invest that isn’t immediately on the chopping block in the next 10 years for a disruption or obsolescence?
Jay Conner [00:09:46]:
Yes, the phrase you talk a lot about is nnon-correlation And I just found that very interesting, and you just brought that up. So can you give, can you give a real-world example of how that actually protects an investor when markets, like, you know, are going opposite directions? Or, or maybe a different, maybe a different question to that would be, can you give an example of when one asset class was going down? But if you’re invested in non-correlated assets, maybe simultaneously another asset class was going up?
Patrick Grimes [00:10:25]:
Yeah, it’s. Well, if you look at kind of the US dollar over time, conceptually, you’ve seen the value of the dollar go up and down, and you’ve seen gold follow a very inverse correlation. So while gold is up, the US dollar is down. Why? Because it’s a haven asset. People invest in gold. Same thing with inflation. When inflation’s up, people are seeking gold. So that’s probably the easiest example of a non-correlation.
Patrick Grimes [00:10:50]:
That’s why metals are cash or cash equivalents. We don’t leave everything in cash, which is really important for me, and we talk about that a lot on our platform. But real estate itself and the stock market tend not to ride in the same trends over time. It just so happens that there are industries that are kind of the best of both worlds, not only not riding on the same market fundamentals, but also having stability on their own footing. And those are the legal and medical industries. Actually, if you look at any of our slide decks, you’re going to see oil and gas, gold, S&P, real estate, all these industries go for a wild ride. And legal and medical, legal services and medical services, just straight up into the right. It’s pretty incredible, some of the fundamentals, how stable a lot of these industries are.
Patrick Grimes [00:11:38]:
If you look at one like CPA firms, well, CPA firms are also like betting with the house. Your house always wins. Good times, bad times. CPA firms always tend to do well. However, that third Venn diagram, resilience from AI obsolescence, that right there is 100% likely to be dramatically impacted. So investing in CPA firms is something that might fundamentally have the majority of the labor taken out, and that may be absorbed much more economically into larger institutions. So I don’t think CPA firms, although they have non correlation and resilience, I don’t think they’re the best investment right now. Dueling with some friends who are actually rolling up CPA firms right now.
Patrick Grimes [00:12:20]:
But those are some examples for you. A really interesting one, golden oil and gas, gold and oil and gas, like how can they be connected? And if you actually look at the trends, gold, oil, and gas, 80% of the time, have correlated, have risen and fallen together. They’re both safe havens. People tend to flock to both of them in times of market uncertainty, even though they tend to be somewhat volatile, especially oil and gas. But the fundamentals, the market fundamentals behind what drives those, are mostly in the BRICS nations. And the impact on the BRICS nations tends to drive their status, suggesting that they tend to drive together. So some things will rise and fall together unknowingly. And so I think the study of the market fundamentals of each of your investments, what are the market cycles? And we didn’t talk about my story, but I lost everything in 2009 and 10 in my first real estate deal because of the market collapse.
Patrick Grimes [00:13:15]:
And then, when interest rates skyrocket, I took a large blow in my allocation into apartment buildings because I was exposed to the interest rate impact simultaneously. You have time when oil and gas are high, right, because of some of the geopolitical environment, and interest rates are high. nd when interest rates are high, we have a private credit debt fund, and that means I’m winning from high interest rates. And so you can actually make returns where, if you’re an owner, you’re going to lose value. Right. And then on the legal and medical side, feeling pretty comfortable. Why? Because they don’t care. They don’t care what else is going on in the broader markets.
Patrick Grimes [00:13:52]:
They’re just doing their services. And as long as you’re investing in an organization that’s not going to get chopped away by AI, mostly we’re an injury-based care and legal financing where attorneys are out there going after sexual assault cases or water contamination at Camp Lejeune, that kind of stuff that’s just not going to go away with AI. As long as you’re in those kinds of industries, you can really build what I call financial security. Not this financial freedom or financial independence, but more of a bedrock of financial security on top of your allocations and stocks and bonds and cash and all the other stuff.
Jay Conner [00:14:30]:
Yeah, well, there are all these different multiple sectors that you have invested in. And my question is, say someone came to you today and just asked the question. I know you’re not giving financial advice. Just ask the question. They said, Patrick, I got a million dollars in cash sitting over here. If that million dollars were yours and you weren’t investing in anything yet, how would you allocate it today? And why?
Patrick Grimes [00:15:05]:
Well, so I’m a little bit of a different animal cause I’m a business owner. Business owners have- I run three operating businesses right now, and they have a little bit different matrix than most of the working professionals out there, who have a different job plan. And it has a lot to do with your age, where you’re at in a growth versus a more conservative cash flow or a conversion point, and whether it’s a tax-efficient account that you have it in or not. So I mean, I’ve written articles for Forbes about all these different things. And the first thing is that we educate on not just how to invest but how to do it securely through asset-protected structures, and somebody who’s lost it all before. That’s something I’ve written articles on, books, our chapters, and books and articlesford Forbes. So I talk first about asset protection, starting with a safe foundation so you can grow it securely. And then we talk about tax efficiency, starting with the right kind of account.
Patrick Grimes [00:16:05]:
Does it make sense? Like what, where is it at now? How do we get into something that can grow tax efficiently over time, depending on where you’re at in your journey? And then we talk about allocation strategies. And if you look at all of our decks, we kind of show that allocation strategies have actually been published by Edward Wolf on the middle class, high income, and the ultra-wealthy. We show some by Tiger 21s and how people kind of segregate their cash, cash equivalents, versus stocks, bonds, versus their alternatives. And what you find is that as you get more astute, people tend to have half in traditional investments and half in alternatives. And then, really, 25% of that pie, that half, is in real estate. And that’s why it is a very important foundational investment. Now it depends on what kind of real estate, because there are a lot of losers right now, and there are some really good winners in our acquisitions fund, but then there are another 25%.
Patrick Grimes [00:17:01]:
Where does that go? It’s not in traditionals, it’s not in real estate. Where’s that? Well, that’s what we talk about: what kind of higher yield can you get at lower risk for non-correlated resilience? And that depends on where you’re at and what you’re doing. But I actually have my favorites. If you go to invest with Patrick dot com, that’s one of the most common questions I get: ” Okay,y Patrick, you’ve hosted 80-some different alternatives on your platform. Now, what are your favorite ones? Investwithpatrick.com says I don’t have all these investments, but I list them all, my top 10, and then on the first page,e and the rest of the PDF is my deep dive into them. So you can choose your own journey, choose your own poison, whatever it is. But we have these conversations.
Patrick Grimes [00:17:44]:
My goal really is not to be a guru and tell everybody to go buy mobile home parks; I don’t like those anymore. Or by any. I don’t want to be a widget guy. I just want to blush and approach it. Here’s every way you can invest outside of the stock market, all the different options you can choose from. Bring panels of people who have been doing it for 10, 20 years, three to four of them, and deep dive into all of them. And the asset protection strategies, the estate planning strategies, and really creative tax retirement account strategies have people gain their awareness and choose their own journey in life, but gain the awareness that it’s out there, re so they can build that comfort and familiarity with them to be able to make some choices.
Jay Conner [00:18:25]:
You mentioned a couple of minutes ago that you have an acquisition fund. Tell us a little bit about that.
Patrick Grimes [00:18:33]:
Well, so when you saw interest rates start to rise, and you’re in this post sort of latter inside of COVID here, and when interest rates rise, you can choose when everybody’s scared, you can choose to hide, or you can choose to make some strategic bets on the table and win from a high-interest-rate environment. So, we as a company, Passive Investing Mastery. I partnered with two different friends of mine. One had been running debt funds. He actually founded, co-founded Verivest, and grew and exited a business that went from 0 to 3 billion in administration that ran over 100 debt funds. And so I said, look, look, man, you exited. This is the best time to do debt. Debt, all of a sudden, is cool again because we are not, you know, out on the streets lending it 6, 7, 8%.
Patrick Grimes [00:19:31]:
We’re lending it 12, 13, 14% on the same assets on existing value in commercial real estate, not this after repaired value or completed value. And residential, which is a make-believe value. This is real value. This is really cool, equity-like returns in real estate. So let’s go out on the streets and lend at high interest rates and in a high-interest-rate environment. And so lend it high. But then, but then we started realizing, like, all these- there are a lot of opportunities to buy. And so then we realized, well, you know what, in this downturn, we need to be lending at high rates, and we need to be buying at low prices.
Patrick Grimes [00:20:06]:
So the acquisitions fund is the sister fund, which says, Look, there’s a bunch of distress, there’s a bunch of blood on the streets, a bunch of people that just need or want out. There are trillions of dollars of commercial real estate debt coming due, and this is a really cool buying opportunity. And so we were able to pick up assets. Now it’s interesting because I had been in thousands of apartment units, and they had gone for a pretty dramatic ride. And that’s really unfortunate. It sucks for a lot of people, and me too. I’m feeling the pain. But they’re on sale during this time.
Patrick Grimes [00:20:37]:
But it turns out that when we underwrote commercial real estate, even today, apartment buildings still haven’t recovered. They’re still not to the point where they’re a better buy than retail. Industrial, manufacturing, warehousing- those things are like industrial is like 98% occupied right now. Resurgence in manufacturing is huge. So we found ourselves and an acquisitions fund doing none of what we used to do, only doing industrial, commercial warehousing, and retail, and killing it because it’s just such an incredible asset. So that pivot, right, and that opportunity to win from the upside at lending at high rates and buying at low prices is really a great value, is really what led to those two funds and their timing.
Jay Conner [00:21:27]:
So, am I assuming correctly that the acquisition fund that you have is something an individual could invest in if they don’t want to decide between 80 different sectors to invest in?
Patrick Grimes [00:21:41]:
Yeah. So the acquisitions fund. Yeah, theoretically, we’ve had it fully capitalized now for about six months a year. We have a pretty substantial wait list for that because it’s been doing quite well. Somebody could certainly go and join the waitlist for the acquisitions fund. Um, the debt fund is certainly available. It’s an income fund. Currently, the cash-paying income fund is doing really well.
Patrick Grimes [00:22:03]:
That’s also something people can invest in. And then the legal and the medical sides are all. Are both open as well?
Jay Conner [00:22:11]:
Okay, so you have other funds that are open right now? Four. All right, awesome. When somebody is looking at, you know, a syndication or an alternative deal or any of these sectors, what are maybe some of the top two or three factors or things that someone should, you know, immediately be looking for before they, you know, consider investing in one sector or another? What, what’s the. How should they think about it, I guess, is my question. How. What advice. I know you can give this advice. What advice would you give them on how to decide what they want to invest in?
Patrick Grimes [00:22:54]:
So what they want to invest in, or to do due diligence on a specific investment. Those are. Sorry, you started one way, and I got the. On the back end.
Jay Conner [00:23:03]:
Yeah. In other words, what’s the decision-making criteria on whether I want to be in a sector, B sector, C sector, or. Or, you know.
Patrick Grimes [00:23:16]:
Yeah.
Jay Conner [00:23:16]:
What do I want to be, in other words? Not the due diligence on a particular opportunity, but yeah, that sector.
Patrick Grimes [00:23:23]:
Yeah. And I think it goes back to the allocations pie charts that we talked about before, where it has to do with, you know, the capital you have, where your investments are now, and then where you’re at in life. And those are. That’s kind of specific to everybody, and it’s really personal. And then there’s this aspect of their risk tolerance, because there are people early on making conservative bets and people later on making risky bets. And I don’t really know, and I don’t really give advice. And then it does have something to do with how asset-protected you are and how tax-efficient you can be. And so I like to have a conversation with individuals because I don’t give advice.
Patrick Grimes [00:24:00]:
But I have been around the block for a while, and I have seen ups and downs, and I’ve felt the pain. If anybody wants to have a chat, be happy to chat. And on my website, you can schedule a meeting with me. I leave our blocks open every week. It’s One of the things that I love to do is still invest. I haven’t done engineering for many years now, and I still get out there and talk to investors and help get them pointed in the right direction. We’ve run across, I think we did 60 different alternative sessions. Then we held a summit.
Patrick Grimes [00:24:28]:
It was a three-day virtual summit. We had 30 different speakers highlighting another 20 sessions. We had 600 people attend that event live. Really, really cool attendance, actual attendance. And those are the kind of things you can do if you really want to get in there and learn or set up a call. But it’s just, sorry, I’m giving you the non-answer here, but it really is so specific. Right. And I have my favorites, and I tend to just like to chat with people one-on-one.
Jay Conner [00:24:56]:
Okay. So if someone wants to talk about, well, what should I be investing in? Schedule a one-on-one call with Patrick, right?
Patrick Grimes [00:25:06]:
Yeah. We’ll help you get pointed in the right direction.
Jay Conner [00:25:08]:
That’s great. I know nobody has a crystal ball, but I do know the person who has more experience sits closer to the crystal ball, and that would be you. Patrick, fast forward from now over, say, the next five years. What kind of shifts do you see coming in the investment world around the corner?
Patrick Grimes [00:25:35]:
You know, my biggest, so a five-year horizon, you said five to ten-year horizon. Maybe my biggest concern really is AI disruption and people walking in a little bit blind. I still see all through Covid like we stopped doing apartment buildings when we saw the fundamentals of the expenses and rents, the overbuilding, and we still took some hits during that as a result, but we stopped doing apartment buildings. There are people still building, kind of like taking a blind eye. Even when things didn’t underwrite like they used to, they didn’t pencil. I still see people right now moving full force into industries that can be fairly easily destabilized by AI disruption. And we can see it happening in real time. And so I tend to ask people, Hey, within the asset class, who are you serving? What need are you solving within an industry? And I tend to be a spear fisherman here in Honolulu.
Patrick Grimes [00:26:34]:
I enjoy the sport, I do it a little bit less since my, my, my three year olds back there have a couple of sharks swimming near, swam nearby and but anyways, I the, I tend to like to use the analogy that, you know, you really need to just hold your breath and take a minute and be very strategic about, you know, what you go after and you want to make sure you don’t end up in some dangerous waters. In the meantime, Overexposed. And you need to study and learn and then strategically shoot. Because right now, you know, my biggest concern is that, you know, within the industries that you’re solving a need for, can that need be relatively, either functionally obsolescent, go obsolescent, or be automated through AI? And I see a lot of that happening right now. And then, so I’d say both, what need are you solving? And then also look at the underlying service that’s being provided. Like if it’s a housing community or even if it’s an elective medical surgery, or if it’s investing in law firms that do certain kinds of contract work that could be automated versus representation for injury care. That is what we’re doing. Take a look, really hard look at whether that market is still going to be there? Because it may be that it’s automated, or it may be that the market disappears.
Patrick Grimes [00:27:59]:
For example, there are buildings next to large financial institutions, and you know, in areas that are basically only populated by a series of large financial institutions as well as their providers. Right. That submarket. But the finance industry is one of the first ones that’s on the chopping block. And the big financial institutions have already stopped hiring. They’ve indicated they’re going to start retracting and replacing all new people with AI. And so you’re investing in what should be a fundamentally good asset class in a good market with growth, but the one you’re in, the customer base is on the chopping block. Right.
Patrick Grimes [00:28:40]:
Or maybe the medical practice, or even the law firm, or whatever it is that they’re doing, really takes a hard look at that. And that’s. I mean, I feel like I’m on my soapbox, kind of repeating myself here. But that’s one of the things that, as an engineer, when I look at the safety factors associated, and I look at the underlying fundamentals, what are the biggest risks? And from somebody who’s lost big, big before, I just don’t want to do it again. I just don’t want to do that again. And I’m not. I didn’t, I didn’t see it coming. You know, like I didn’t look out far enough.
Patrick Grimes [00:29:12]:
And now I want to be able to do my best at trying to find that crystal ball, which is somewhere nearby. You’re telling me that if you could point at it, that would be helpful?
Jay Conner [00:29:24]:
Well, you know, speaking of AI, as recently as this morning, I received an email from this company that was thanking me for my order that I had placed. I had never heard of the company before in my life. And I sure hadn’t placed. I certainly hadn’t made a purchase. So I sent an email to this company saying, I don’t know what you’re talking about. I don’t know who you are. I don’t know what this product is that you say I bought. Well, in less than a minute, I get an email response from AI about my question, and that goes back and forth two or three times. We had it resolved within about five minutes, which I had ordered from them in 2020 and 2021.
Jay Conner [00:30:10]:
And please ignore their automatically generated emails that are not current. Wow.
Patrick Grimes [00:30:19]:
Anyway, that was all through AI.
Jay Conner [00:30:22]:
Patrick, you mentioned that you have a book that you wanted to offer to my listeners. Please tell them about that, where they are, what it is, and where they can go to get it.
Patrick Grimes [00:30:32]:
Yeah, so actually it’s a book I did with some other guys, really fun guys and gals. Lessons from Thought Leaders is the title. And I mean, I’m, I’m here, you know, the engineering nerd. But then there’s an actual Navy SEAL here and there. Brian Tracy, Phil Collins, the lead guitarist, and Def Leppard, an actual rock star. Kevin Eastman Zigler, Dennis Waitley, and some really cool people. It was a lot of fun to collaborate on this book. It did achieve bestseller status.
Patrick Grimes [00:31:00]:
And I tell my whole story from, you know, a snot-nose engineer. Losing it all in commerce and real estate and the subprime mortgage collapse and then the, you know, my journey through a single family and apartments and energy and legal medical income, private credit, and all that stuff, and why I founded Passive Investing Mastery to kind of give back and that blue ocean approach at getting alts out there. If this helps people along their journey, then it’s enough of a thank you to me. And so, if you go to passiveinvestingmastery.com, book now, the key is you have to put the name of this podcast in the promo code because we don’t just ship it out randomly, but you can choose on that form to either download the ebook or get a hard-signed copy sent to you. And you know, along the way, if that helps to contribute to your journey, let me know. I’d appreciate it, and I’d love to have a chat with you at one point or another.
Jay Conner [00:32:00]:
So the code is raising private money because that’s the name, that’s the name of this podcast. Patrick, thank you so much. Wow, what a wealth of knowledge that you have shared. I can’t thank you enough for joining me on the show. Thank you.
Patrick Grimes [00:32:18]:
Really glad to be here. Great shot.
Jay Conner [00:32:21]:
Excellent. Listen, if this episode got you thinking differently about where your money can work, then don’t keep it to yourself. Because here’s the truth. Most investors are still stuck playing in the same sandbox, chasing the same deals, getting the same results. But you, you’re learning how to think bigger, differently, how to diversify smarter, and how to put your money and your opportunities in places where people never even look or have never even heard about it. So do me a favor. Share this episode with one person in your network. One investor, one private lender, one friend who needs to hear this.
Jay Conner [00:33:04]:
And if you haven’t done it yet, make sure you’re subscribed to Raising Private Money so you don’t miss the next strategy, the next insight, the next opportunity that could completely change your personal life and your business. I’m Jay Conrad, the private money authority, and I’ll see you right here on the next episode of Raising Private Money.
Narrator [00:33:27]:
Are you feeling inspired by the knowledge you gained in this episode? Then head over to www.JayConner.com/MoneyGuide, that’s www.JayConner.com/MoneyGuide, and download your free guide that shares seven reasons why private money will skyrocket your real estate investing business right now. Again, that’s www.JayConner.com/MoneyGuide to get your free guide. We’ll see you next time on Raising Private Money with Jay Conner.