Like so many real estate investors, Patrick Grimes learned a lot of lessons the hard way in 2008 and 2009. Having begun investing in single-family homes in 2006, he found himself at the top of a market that (supposedly) had no top.
“I was a high paid high tech professional,” he told Michael Duncan of The Road to Financial Freedom. “I got some advice to invest in real estate. So I did … but at that point I wanted to double and triple my money every two to three years.”
“I learned that I was speculating on assets,” he said. “And if the music stopped and I didn't have a seat, I would lose it all.” Which is exactly what happened.
Today, the situation is much different. As the founder and CEO of Invest On Main Street, he manages a portfolio of thousands of apartment units — all with the benefit of non-recourse loans and economies of scale. He also offers a diversified energy portfolio — another tax-advantaged asset class.
“I believe ‘essential needs’ is the theory there,” Grimes said. “And that's housing, food, and energy. Those are the things that aren't gonna go away.”
“And we're not [in] China, where the government houses, feeds, and energizes everybody,” he said. “And so that allows for us to get into these assets where the IRS is like, ‘Yes, please invest. We need you to invest. So here's all these tax advantages.’”
High-earners tend to be 25% invested in alternative assets, the ultra-wealthy 50% in alternative assets. Compare that to only 8% for the middle class.
Grimes is on a mission to change that — even for investors who fall below the accredited threshold that would qualify them to invest in his funds.
“I do know others that structure these deals differently for non-accredited investors,” Grimes said. “So if you’re … they're not accredited investors, reach out. Either way, I'll forward you one to other investors that I know that are structuring investments that help individuals like yourself take that leap forward.”