Episode Transcript
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(00:02):
Welcome to the Real Estate Espresso podcast, your morning
shot at what's new in the world of real estate investing.
I'm your host, Victor Minash. This is the WEEKEND edition
where we interview notable people from the world of real
estate investing. Today is no exception.
We have a great guest all the way from Honolulu.
Welcome to the show, Patrick Grimes.
Victor, I appreciate you sharingin the Hawaiian spare with me
with your beautiful Hawaiian shirt on.
(00:23):
Great. Well, this, my wife did pick
this up in Maui, so it's genuineand so great to have you here.
Yeah. We are.
Yeah. You were on the show before.
You're in a few different asset classes.
One of the ones that you spoke about last time is lending
specifically to the legal profession.
We won't focus on that today, but perhaps for the listeners at
(00:47):
home, give a little bit of your back story and how you got to
this point in your journey. Yeah, well, I wasn't like many
of your listeners. I was a hard, hard working and
eventually very high paid individual in corporate America.
I did, in my case, machine design, automation and robotics.
So I'm still a geek today. I just, I just geek out about
other things than machine design.
But I got some advice early on and that was to invest in real
(01:10):
estate. And I was kind of shocked
because that came from the founder, this Titan of
technology success. And he said as much as you can,
as soon as you can put it into real estate.
Well, no words were true or spoken.
Absolutely. So today in addition to
investing in particular asset classes, you also run a fairly
(01:31):
broad ranging set of educationalseminars and webinars in
different alternative investments.
And I know you run quite a few. We're about to do 1 next week,
which we'll talk about I'm sure.What is some of the landscape
that you cover? Well, ma'am, when I was an
engineer, I was, I knew all about stocks, I knew about
startups and I knew about crypto.
(01:52):
But nobody ever came and told me, hey, aside from the 50
stocks and that are volatile andsince been driven, here's the 50
alternative strategies that you can invest in.
And these are the ones that don't ride the same market
fundamentals, that don't ride the same cycles as the stock
market or real estate or oil andgas or gold.
(02:13):
Here are here are all the ones that you can invest in that
actually have true sustainable long term growth, that are both
recession resilient and what we call non correlated.
Nobody ever told me that those existed.
And so there's really no place you can go as far as I know.
I mean, I, I, I own the alternative investing Almanac
and it's, there's only I know, Iknow my buddy who wrote it and
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there's only a handful of them in there.
So I created a platform where wejust, we talk about all of them.
I showed my cards out and and I got a such a good response.
And then when I showed my hand, I decided like, let's just show
the whole deck. And so we wrap 50 so different
deep dives and called the alternative investing mastery
series where we just go with twoor three panel.
It's delighted to have you on Victor.
(02:53):
It's going to be a really fun one coming up here quickly and
where we deep dive into specificasset classes and the audience
is there live to get the answer to all the questions that they
have. So it's really it's kind of a
passion project for me. I love it.
Well, I think the name of the game is to find things that are
truly counter cyclical because there are so many folks out
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there thinking they're diversified.
In fact, I think back, because we're in one of those moments
right now where there's just a lot of head of steam built up
around a few very specific industries are I was
partofthe.com bubble in the techindustry before the dot
communists were defeated. And at that time I remember
having conversations with folks and they said, Oh yeah, I'm
(03:36):
diversified. I I own shares in Nortel and
Lucent and Worldcom and Cisco. And I'm thinking, wait a minute,
you're not diversified at all. And because all these things
tend to track one another, you can hold the graphs up to the
light and they basically track each other.
Even things that historically were counter cyclical, like
stocks and bonds, today in fact are often tracking one another
(03:59):
almost perfectly, which is kind of shocking.
That's absolutely right. And I, I talked to a lot of the
unfortunately, the American justdoesn't have good financial
education. It's heavily weighted into these
companies that are trying to putfood on their own tables and
they're managing your retirementaccounts.
So they, they're telling you keep it on with us.
(04:20):
And they even sometimes I call it the ruse of reeds.
They're saying, oh, you're diversified because we got you
in a Reed. Well, in our slide decks, we
show how reeds and the stock market track almost identically
and we superimpose the real estate.
But if you, if you, if you look at lots of other markets, lots
of other markets outside of the novel ones, like that's why you
see us in legal or in healthcareor in education, because these
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are the markets that they're needed in good times, right?
The attorneys and doctors are needed are good times.
When it comes to attorneys, man,they're even needed more in bad
times because people get really litigious.
So there are investments you canget into, ones that don't ride
the waves of oil and gas or gold.
Well, those are all good stock market real estate, those are
all good allocations, right, where you have a, a piece of
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your pie. There are more, more novel asset
classes that don't ride a many of those waves.
And if you look at the hedge funds, private equity funds, the
sovereign funds, these, these are about reasonable growth.
And what you said the word diversification, I almost
stopped using it because they, there's such a disparity between
what it is, but non correlated alts, right?
(05:26):
That's how that's where they're allocating to.
They're allocating their pie chart into things that hey,
look, I put a sliver here that the returns coming from this
sliver won't have anything to do, won't be driven at all from
the market fundamentals that will drive the rest of the
portfolio. And that's what we say is when
you get true financial security,not just independence like I
had, man, I my first real estatedeal, we didn't talk about it on
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this when we didn't last, I losteverything because of the
subprime mortgage collapse. Man, I had AI was going to make
it big and one asset class and Ialmost I lost it all.
So it's true financial security,not just independence that that
you need to get there through these lesser known alts.
It's interesting that the marketplace talks about all of
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these things as alternative investments, kind of as a basket
of things that are in the lunatic fringe where if it's
just not what Wall Street recommends, either stocks or
bonds, it's other and it's be careful and it's fringe and
it's, I don't know, scary yet. Really when we think about
where, where is the largest amount of investment, It's in
(06:33):
real estate. That is the largest assets class
by far. Stock market doesn't come close
when you put it all together. Yeah, absolutely.
And I, I was, I was doing it in a mastery series last night
where I pull up statistic 90% ofall, 90% of all millionaires and
American did so through real estate investments.
Notice that wasn't the stock market.
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It wasn't the stock market, it was ones that are actually
outpacing inflation. And I was listening some talks
about inflation being a vector, right?
And the asset growth right now is not the basket of things that
they put in the inflation number, but it but, but the
inflation numbers right now in assets is almost 10%.
So if you can't figure out a wayto outpace that, you're actually
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not keeping up with the wealth, right with your asset
allocations for your investments.
And so you got to really look towards these, these not scary,
right? What's more scary?
And I think this is what I tell people often times and I, I'm
not a financial planner, ACPA and attorney.
So this isn't finance, tax or legal advice.
But what I tell people is like, like, it may seem scary because
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the human condition is we're nomadic, we travel in groups,
right? Nobody wants to go to the forest
with the desert alone. So, so at first go huddle with
people that are already doing these things.
But, but think about it when yougo home tonight, think about it
like, OK, here's here's my pie chart and here's all my
allocations. And then, and then think about
the the waves and the cyclic nature of those cycles.
(08:00):
And then where are we at today and what it always makes sense
to be diversified and uncorrelated investments.
And we just got done with a pandemic, a Black Swan of it.
And what did that, that that alone could have caused the bus,
but interest rates rose faster, the Great Depression, right?
That could have caused on its own a bus causing major carnage
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across the financial markets, Payroll cost, the materials
cost, all of these indicators. Maybe one or two of these things
could have caused financial instability. 11 out of the last
14 Fed rate hikes in and in a bust, right?
So probabilistically, but let's add these additional things.
Now we're in two proxy wards, Ukraine and Israel, right?
(08:43):
And we just bombed Iran. And that's where a lot of the
10% of the world's energy comes from, is my understanding, Or at
least oil and gas. Again, major driving indicators
that can cause major financial instability.
Wow, a trade war is going on with our allies and around the
and the again that alone if not stacked together with all these
indicators could kind of financial instability.
(09:06):
While we just passed another spending bill adding three
trillion to the deficit and the world's biggest economies are
betting against the dollar and the central banks are buying
gold. Again, that alone, if not
stacked with the other like 8 or9 things I said could cause
market instability. The point is here, anytime, any
day, your entire life, when you woke up, nobody saw the subprime
(09:26):
mortgage collapse happening. Or maybe one or two guys did.
Nobody saw the dot combo or maybe one or two guys did.
But I don't want to be the guy time in the market.
At any time in your life, it makes sense to think about
stability and long term growth and capital preservation in your
portfolio, especially today. They say the best time is 2
years ago, the second best time is today.
(09:46):
Absolutely. And, you know, today we have an
environment where well, as always, investors crave
stability. They crave certainty, which is
probably the one thing the market cannot deliver,
especially with the uncertainty that's being intentionally
injected by the White House. They do that.
(10:06):
President Trump does that, I'm sure to maintain his negotiating
leverage as the number one reason for that.
It's not that he's aiming to be chaotic.
I think he's just trying to maintain his negotiating
leverage, but it's the the knockon side effect of that is
extraordinary in all reaches of the economy and investing.
(10:27):
I couldn't agree anymore. And I'll tell you what the
engineering me does does not understand the political
dynamics and how that's going onright now.
But just looking at the numbers and the instability, man, I
just, I can control what I can control.
And, and, and that's not not predicting the political climate
or trying to understand what thepolitics are doing, but hedging
(10:47):
against the uncertainty that it's causing.
Absolutely. So next Wednesday we're going to
be talking about senior housing.Tell us about the panel.
I'm one of the panelists, honored to be one of the
panelists on on that event. What was the thought process
behind putting that event together?
Well, for many years I was just trading the the alts that I
(11:09):
would get in my box, which is a couple guys like baseball cards,
right. And then, so then I showed my
hands like, these are the ones that I like.
And then my audience was like, wow, we have about a 15,000
investors that are tuning in to our list.
And then we said, well, then they said, wait, what?
What about these other ones? Assisted living keeps coming up.
Assisted living keeps coming up as an attractive asset class.
(11:29):
So when, when I like it or we get requests for, hey, let's,
let's do a deep dive on this. And in all of our panelists, we
get, you know, two or three justlike yourself, experts in a
certain asset class that can talk with confidence that our
thought leaders in the space we get on and we have a friendly
discussion. We talked about the pros and the
(11:50):
cons that why it's good strategyplay.
What should passive investors look out for in the asset class,
how to be successful, What are the anticipated returns for
different kinds of investments. And so it gives you that ability
to show up live, get all your questions answered.
We leave them in as we can and we, we don't leave before we
finish them all. And I'm delighted to have you
(12:11):
there. It's going to be a really cool
one. We've got some super strong
powerhouse players, including yourself that are going to be
there to help educate and sort of unveil the the insurance and
outs and the pros and cons of systems living, investing.
Love it. Well, Patrick, if folks want to
connect, if they want to learn more, if they want to register
for the webinar, what's the bestway?
(12:32):
Passiveinvestingmastery.com that's our website at the top.
You'll see we have a few investments, but right below
that you're going to see our alternative investing mastery
series. If you want to see Victor on
there, register down below. We're going to be hosting this
when I'm I'm I'm very excited about it.
We all. There's also ability to set up a
call and wherever you're at in your career right now, I'd be
(12:54):
happy to contribute. I've I've got a book if you'd
like, I'd be happy to offer thatto your audience as well.
Victor Love. It well, Patrick, great to catch
up as always. And for the listeners at home,
definitely connect with Patrick Ryan's at
passiveinvestingmastery.com. Links for the website and the
webinar series will also be in the show notes.
(13:15):
And in the meantime, have an awesome rest of your weekend.
Go make some great things happen.
We'll talk to you again tomorrow.