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E18: How to “Cash In” in Hard Times: Cash Dispensers (ATMs) vs Distressed Asset Funds
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Get ready to dive into the world of alternative investments with Bronson Hill and Patrick Grimes. In today's show, Bronson takes us through the exciting journey of his ATM fund investment, highlighting consistent monthly cash flow, tax benefits from depreciation, and stellar overall returns. Meanwhile, Patrick unveils the details of his Recessionary Acquisitions Fund, where distressed assets are acquired at discounted prices for cash, with quick turnaround times and projected annual returns of 30-40%. Join us as we explore the risks and advantages of each investment, including essential needs, flexibility to exit, and downside protection.
Finally, find out why Bronson's fund earns the spotlight for its ability to harness the time value of money, delivering upfront returns through monthly distributions. Sit back, relax, and let's deep-dive into these intriguing investment opportunities!
Here are some power takeaways from today’s conversation:
[02:46] - Bronson and Patrick’s background
[10:32] - Patrick’s recessionary acquisitions strategy
[19:50] - Bronson’s ATM fund
[26:33] - The ATM fund’s minimum investment, ROI
[40:54] - Diversifying retirement account funds
[44:32] - The benefits of checkbook control accounts
[48:52] - Risks in ATM funds
Episode Highlights:
[10:32] Patrick’s Recessionary Acquisition Strategy
- The recessionary acquisitions strategy involves capitalizing on buying opportunities during economic downturns, specifically, buying distressed properties from owners needing quick exits, closing within 14 days of due diligence. Properties are bought all-cash at a discount, often 20-30% below market value. This approach focuses on making immediate returns on the acquisition, allowing for compounding growth by reinvesting and acquiring additional assets. Through tax advantage exchanges and strategic selling, one asset can be transformed into two, and further multiplied. As we approach 2025, with an expected increase in distressed operators, taking action and purchasing quickly becomes crucial for long-term financial success. This strategy minimizes risk by calculating returns precisely and allows for flexibility in case of unfavorable market conditions.
[19:50] Bronson’s ATM Fund: Consistent Cash Flow
- The ATM Fund offers investors the opportunity to diversify their investment across a portfolio of over 25,000 ATMs across 12+ states. With a minimum investment of $52,000 (which may increase to $100,000), investors can expect consistent monthly cash flow, known as a "preferred return," starting from around the fourth month of investment. The fund has a proven track record of never missing a monthly payment in its 11-year history, providing reliability to investors. Individual investments have a duration of seven years and offer attractive returns of approximately 1.8 times the equity multiple, with an 11% cash-on-cash return and a 19% internal rate of return (IRR) when factoring in early distributions. Moreover, the fund provides strong tax benefits through high depreciation of 80% in the first year, offsetting gains for investors. Despite the COVID-19 pandemic, the ATM industry has demonstrated steady growth of around 4% annually, making it a resilient investment option.
Resources Mentioned:
Patrick Grimes:
www.passiveinvestingmastery.com
Book: www.passiveinvestingmastery.com/book (referral: Cash Flow Fight Club podcast)
Patrick’s article on Forbes.com: Recessionary Acquisitions: Investing For The Upside Of Downturns
Bronson Hill:
Book: Fire Yourself
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