Introduction to Alternative Investing
As investors seek new ways to diversify beyond traditional stocks and bonds, alternative investments are gaining traction. These investment options, including tax liens, litigation finance, and technology metals, offer high returns and passive income potential while reducing reliance on volatile markets.
In this episode of Tax Sale Insiders, host Brian Seidensticker, CEO of Tax Sale Resources, speaks with Patrick Grimes, founder of Passive Investing Mastery, about the strategies and opportunities within alternative investing.
Grimes shares his personal journey from a mechanical engineering career into alternative investing. Initially, he made risky investment decisions that led to significant losses, particularly in pre-development real estate during 2009-2010.
However, he learned from these mistakes and shifted his focus toward low-risk, high-return strategies. His insights provide a roadmap for investors looking to diversify and achieve financial independence through non-traditional assets.
Unique Alternative Investment Strategies Discussed
Patrick Grimes introduces several unique alternative investments that provide passive income and financial resilience in different market conditions.
Tax Lien & Tax Deed Investing: A Lucrative Yet Overlooked Strategy
One alternative investment Grimes discusses is tax lien and tax deed investing. These investments allow individuals to earn high returns by purchasing delinquent property tax debts or acquiring real estate at a fraction of its market value.
While Grimes personally has not participated in tax lien and tax deed investing, he recognizes its strong potential. He included it in his Alternative Investing Mastery Series to ensure investors understand this lucrative opportunity.
- Tax lien investing provides a secured interest in real estate with state-mandated returns.
- Tax deed investing allows investors to own properties outright after tax foreclosure sales.
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Litigation Finance: High Returns in the Legal Industry
Litigation finance, or legal funding, is one of Grimes’ top investment picks. This strategy involves providing capital to lawsuits or law firms in exchange for a share of the settlement.
Grimes highlights litigation finance as attractive because:
- It does not correlate with the stock market—its value remains steady regardless of economic downturns.
- Legal cases continue regardless of financial conditions, making it a recession-resistant asset.
- Investors can earn 20%+ returns, as law firms often require outside capital to pursue high-value cases.
This investment is gaining popularity among alternative investors looking for stable, high-yield opportunities.
Technology Metals: Capitalizing on AI and Semiconductor Growth
Grimes also discusses technology metals investing, a niche investment in rare earth elements like vanadium and gallium, which are essential for:
- AI development
- Semiconductors
- Electric vehicle batteries
- Data centers
With China restricting exports of these metals, global supply shortages have led to 20-30% investment returns for those who purchase and hold these commodities.
Grimes, a longtime precious metals investor, explains that while gold and silver are traditional hedges against inflation, technology metals offer higher growth potential due to their industrial applications.
Real Estate Debt Funds & Acquisitions: Opportunities in a Downturn
Grimes details how commercial real estate disruption has created new opportunities:
Debt Funds (Income Funds)
- Private lending to struggling real estate operators at 12-14% interest rates.
- Provides steady passive income without the risks of property ownership.
Acquisition Funds
- Focused on acquiring distressed commercial real estate at a discount.
- Many sellers are financially distressed due to rising interest rates, inflation, and property insurance spikes.
These strategies allow investors to capitalize on market shifts while mitigating risk.
Other Niche Alternative Investments
Grimes introduces additional unconventional investments that offer high-yield opportunities:
- Bourbon Barrel Aging – Investing in aging whiskey barrels, which appreciate over time.
- Laundromats – A stable cash flow investment that remains profitable during recessions.
- Aviation Investments – Funding pilot education and aircraft purchases amid a global pilot shortage.
These niche investments demonstrate the wide range of opportunities available outside traditional markets.
How to Get Started with Alternative Investing
Grimes emphasizes that successful alternative investing requires:
1. Daily Learning
- Listen to industry podcasts like Tax Sale Insiders.
- Read investment books and attend educational webinars.
2. Weekly Active Learning
- Attend live events, mastermind groups, and investor meetups.
- Network with experienced investors and industry professionals.
3. Diversification Across Multiple Asset Classes
- Spread investments between real estate, debt funds, legal finance, and commodities.
Grimes offers a free book detailing his investment journey and alternative strategies, available at Passive Investing Mastery.
Conclusion – Diversifying Your Portfolio for Long-Term Success
Alternative investments provide financial security, passive income, and high-yield opportunities beyond traditional markets. Strategies like tax lien investing, litigation finance, real estate debt funds, and technology metals investing allow investors to diversify and reduce exposure to volatility.
As Grimes emphasizes, continuous education and networking are key to mastering alternative investments.
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