How to Achieve Family Adventure using Self Storage with Erik Hemingway

Neil Henderson: 00:00

I’m Neil and I’m Brittany. We are a family on a journey towards financial and location independence. Each week we interview successful real estate entrepreneurs about their chosen investment strategy, and rated based on how much money it took to get started, how long it took to educate themselves. Passive it is and whether or not they could do it from anywhere in the world.

Brittany Henderson: 00:19

Welcome to the road to family freedom.

Neil Henderson: 00:21

This week, we sit down with Eric Hemingway, a general contractor who escaped the rat race and spent three years sailing the Mediterranean with his family. He’s built financial freedom for himself, largely using a portfolio of self storage facilities.

Brittany Henderson: 00:34

If you like our show, the easiest way for you to give back is to leave us a rating and review on iTunes head on over to road to family freedom comm slash review for links and instructions on how to do that we would be so grateful. All right, enough out of us. Let’s hit the road to family freedom.

Neil Henderson: 01:00

Welcome to the road to family freedom.

Erik Hemingway: 01:01

Great. Thanks for having me on. Of course, it’s always great talking to you.

Brittany Henderson: 01:06

to have you here.

Erik Hemingway: 01:07

Oh, thanks. Thanks. A quick update.

Neil Henderson: 01:10

You just survived the hurricane everything okay, there. Yes,

Erik Hemingway: 01:13

Hurricane Florence just came through two weeks ago. And yeah, so we’re still in the midst of picking up the pieces. But yeah, doing okay. Thankfully, we made through Okay, and a lot of other people, you know, had a lot worse damage than we did. So we’re, we’re pretty grateful. Great. Glad to hear that.

Neil Henderson: 01:27

Well, let’s let’s get right to it. So do you recall an aha moment for you when it came to real estate?

Erik Hemingway: 01:34

I think for me, it was I’ve been in real estate for in some way or another for probably 25 years, my dad and I started a business in northern Arizona together not in construction, it was a retail store. And after about a year, we we realized that it wasn’t quite enough to support both of our families. So I branched out and got into construction started literally on the ground floor, sweeping out jobs and digging ditches and all that kind of thing and slowly worked my way up to Super intending and project managing and then the guy that I was working with, he had an investor who would come into town, buy some properties, and then you know, leave and we would build the properties and spec houses and that kind of thing. And it was then I think that it started clicking like this is this is a you know, ready to make a real a decent living. And it’s, you know, it’s a need is always going to be a need housing and that kind of thing. And so in 2001, I left that company and started my own contracting firm and just started, you know, started kind of basic, and in one spec and then eventually to specs. And yeah, so after being in construction for a little while I realized, you know, this is something I’d probably like to try on my own, you know, my thoughts were so I left that company and started my own construction company in 2001. And the thought was, you know, do a spec house, make a pretty good chunk of change off that and then maybe take a couple three months off, and then do another one, you know, kind of do this thing? Well, it didn’t take me long to figure out that in construction, it’s really hard, it’s a hard machine to stop and start like that, because you don’t get any loyalty from subcontractors, and you just lose all your rhythm. So we started our business and just slowly grew it in the early 2000. You know, just kind of thought we didn’t really know the difference of spec houses, residual income, you know, passive income or anything like that. It was just kind of a, you know, a full time job really, you know, 12 hours, 1012 hours a day, five, six days a week, you know, that’s kind of how it was. So yeah,

Neil Henderson: 03:25

so that’s kind of where you got your your start. And you discovered, yeah, that’s really passive. Just, you know, right, right, I can you know, watch the checks roll. Oh, yeah. So that was sort of a realization for you, and where did you go from there?

Erik Hemingway: 03:40

So I think it was 2004 or five, you know, kind of, I’d been in it for about 10 years then kind of burned out on, you know, just trading your time for dollars kind of thing. And that was right around when Rich Dad Poor Dad came out. And I remember reading that and thinking, you know, the cashflow quadrant, you know, the employee side, I think I also read e myth. Yeah, maybe even three visited one of those additions, but are you working on your business or you’re working in your business, and especially as it related to real estate, like, in my mind, what I try to tell our kids is we you know, and everybody explains it differently. But there’s track one where you’re, you’re working a great job, or you’re self employed or whatever, it’s the left side of the quadrant, you’re either an employee or self employed, but you’re still working and getting paid, you know, for for your work. And it could be great, you know, you could be a brain surgeon and make 300 grand a year, or you could be just punching the clock in at a regular job or whatever. But you’re still even if you’re getting paid really well, you’re still trading your time for money. And I think it was kind of that shift where I thought, you know, let’s try to make something that we get paid whether we work or not. And that was kind of the first I had a few friends that said, you know, self storage is really a cool business. It’s a you know, you hear all the all the different ways to describe it’s a cash cow, it’s like a slot machine, you know, it’s easy money or whatever shot, it kind of just kept that in the back of my mind for a year or two, and then found a piece of property that I thought would work well for storage. And so we started exploring that and actually putting numbers to it. And I wasn’t really thinking like an investor, then just thinking this looks like the next natural step. You know, I’m doing residential, and I’ve done a little bit of commercial development, small office buildings, and that thing, that kind of thing. And I thought, well, maybe storage is, you know, a good option. So this was 2004, we found a piece of property and then had to go through the rezoning process and get it rezone commercial and of course financing and gathering all my costs to build it, you know, as a general contractor, and all that. So it was it was it was quite a road there, you know, probably a year and a half of I think I probably spent at least two or three hours a day on some part of the project. But that was our first laying the groundwork towards something residual.

Neil Henderson: 05:51

And you see where to go with this. How did you end up? We’re going to kind of skip forward here. How did you finance that first property? Did you bring in investors? You have some money, right?

Erik Hemingway: 06:04

Yeah. So we had some cash that we had done, that we had built up from selling spec houses and doing some smaller investing and thought, Well, you know, the smaller ones have gone well, you know, doing spec house, and we were doing like starter homes, hundred, maybe 150 to $250,000 sales price. And you know, this is 10 years ago, or 12 years ago or whatever. But I thought, well, if if we could do good putting 20 or 30,000 into these projects, what if we put 150,000 into a storage project? You know, what, what kind of return would that be? And of course, the climate for financing was way different than it is these days, I had built a relationship with a with a community bank. And you know, I was expecting to get laughed out of there. I went in, I said, What do you think about what do you think about a commercial project? What do you think about financing a self storage? And he said, Yeah, yeah, we’d love to do that, you know, bring me the details. And we, you know, we’d be happy to finance it. And that’s pretty much how, how kind of loose and informal It was then. And after that meeting, you knew they were going to do it, it was just working out the details, whether you’re going to bring in 15% or 10%, or, or 20%, or whatever. But so I was I was pleasantly shocked that that he was willing to take the risk on us. And so we we move forward and started developing the storage. That’s awesome. Yeah,

Brittany Henderson: 07:16

I’m going to hop this in here, and we can stick it in somewhere else. But can you explain what a spec houses?

Erik Hemingway: 07:25

Oh, sorry. Okay. Yeah, so so we were developing spec houses, and spec is short for speculative. So what we would do is buy a piece of property, and we either had a house plan, or we would design one for that lot. But after a while, we had a few different plans that we could use. And so maybe it was 1314 1500 square foot house. So you’re taking all the risk, right, you’re buying the lot, and it’s pure speculation, you’re hoping that somebody that there’s going to be a customer to buy this house when you’re done and ready to sell it. And we had done I had done a lot of that with the previous company. And it’s, it’s, it’s like a customer except for you just don’t have a customer yet. So you design it, you build it, what you think is going to sell, you know, it’s going to appeal to the largest audience decorate it painted cabinets, countertops, basically, when the house is almost done, you put it on the market, and then you know, people that are in the market, they’re either going to buy a used house, or they’re going to buy a new house, and here’s yours ready to go. And, and there you go. So So and it’s like a lot of real estate, you know, you start with the end price in mind and work your way backwards, you know, we’re going to we know, a 1500 square foot house is going to sell for 190,000. Let’s say we know it’s going to cost us 100,000 to build it and a lot is going to cost us 25,000. And it looks like we might make 30,000 on this project. So so then it’s yes or no, then I mean, it is risky, because then of course, all the surprises along the way are on you, you know, if there’s, you know, here’s you run into a $10,000 bill to connect to a sewer or septic system or whatever, then that’s, that’s, you know, that’s on you. Which which you might not be able to recover from your sales price. So yeah, that’s the that’s the risk factor that some people don’t like.

Neil Henderson: 09:04

Alright, so in regards to the Self Storage Facility, you know, you built that, and then you just sat back and started counting your money. Right?

Erik Hemingway: 09:10

Exactly, just like everybody said, it’s easy money. So no, we. So leading up to the storage was probably like I mentioned a year and a half or so of doing our homework. And I think we had a property under contract for six months, it was vacant land, and it was residential. But my offer was contingent on me being able to rezone it commercial, because I wasn’t I couldn’t close on the property with it without being able to do what I needed to do. So you know, I think that’s pretty normal for commercial property like that, especially if it’s somebody that’s been on the market for a while and you’ve got a seller, that’s, that’s willing to wait it out with you that you know, they will, they’re willing to wait with that, you know, I had no problem closing on the property if I can, if I can use it for what I need to. And so thankfully, they were patient enough to wait with me through that. And then we close on the property. And then 2006 was all the year of building the project. We actually started in January, and we’re hoping open the doors in August 1 of that year. So looking back, it was pretty fast project for that size, it’s about 42,000 square feet total six buildings of traditional drive up self storage, and then a 5000 square foot commercial building, that we have leased spaces, five lease suites for different tenants, we’ve had restaurants and hair salons, and we’ve got an insurance office in there now and just commercial space for lease, we had to add that that was one of the the conditions of the rezoning is that they wanted the front zoned lighter commercial, and then the storage in the back just to kind of make it more visually appealing from a highway. So gotcha. So yeah, so 2006, of course, as we know, was probably right at the peak, and we opened the doors, and I thought, you know, the phone’s just going to ring off the hook and this place will be full in six months. And of course, it ended up probably taking close to six years before it was actually what you would consider are, you know, safely in the black. And so that was very unexpected, but you know, hindsight, it was we’re glad we were able to weather that time period and able to keep the property. So, so little financing side of it, we we bought the property with the community bank, like I mentioned, and then shortly after we refinanced it with a credit union. And that’s who’s had the note, you know, all since then, when we ran into, you know, after 2007, and eight, and it started becoming pretty clear that it was a pretty major recession, for example, there was two or three subdivisions near our facility that we were counting on for our lease up, you know, as the as they’re selling houses, these folks are going to need storage, will all three of them went bankrupt. Right? Right. Pretty, right, you know, pretty quickly into the recession, 2008, maybe 2009. Done, I mean, empty streets, and that was the end of that. So there goes my attendance. And it just, you know, first for probably two or three years there just kind of trickled along, you know, we’d have 12 movements one month and 11 move outs, and then the next month was 14 move INS 15 move outs, and it just kept fluctuating that way and just cannot seem to get past the, you know, our numbers were at 45 to 50%, we’d at least be covering the the payment, you know, the overhead. Yeah. And it was just, you know, floundering around that that mark for a long time and thinking what’s it going to take to push this over the edge? You know, so that was it was not all? Like it like we thought it was going to be for sure,

Neil Henderson: 12:31

yeah. Well, but you know, well, you know, I know your story, but you know, but you went from there, you know, your your self storage facilities just kind of barely limping along. So you decided to, you know, to just dig down and, you know, work harder and build more, right? Yeah,

Erik Hemingway: 12:49

yeah. So it was, it was like a perfect storm, that all happened right around there. And, you know, this is even before things got got really bad as we made the decision, we had an opportunity to, to move our family to Costa Rica in 2008. And we had already kind of decided we were done with the building our spec houses and all that. And it wasn’t even, you know, the white writing wasn’t really on the wall. So clear in 2007, it just felt off to me, you know, I had a lot of a lot of other people were in the business now and bidding on the same jobs. And you know, just kind of getting that awkward, you know, everybody’s in this now, everybody thinks it’s a great way to make a lot of money. And so the market was very crowded. And you know, I’m the type of personality that with everybody’s doing something, I usually would just go the other way just out of principle, not even if it’s smart or not, I just feel like, this is too, this is too crowded, I’ll do something else. And so we had an opportunity to go to Costa Rica, and we ended up selling our house after we moved, we moved before it was sold, and we moved down there ended up being down there for a year and a half selling this stuff we had back in the States. And it was the summer of 2008, we had a buyer come along for two small commercial buildings that we owned a warehouse and a little office building. And like little I’m saying, you know, literally 2800 square feet, maybe 3000 square feet for small suites, we had a buyer that came along for that, which was just amazing, you know, it was really 1159 in the in the economy, and this guy had a 1031 and had to find something to buy and bought it. And we were tickled to sell it. So that really was the cash that helped us kind of get through the next few years feeding the storage habit and and ended up doing something else. So at this point, it was 2009. And it was pretty obvious that you know, there wasn’t a lot to things were trailing behind the United States are the people that were buying property in Costa Rica were from the US or Canada. And by that time by 2009, no one was buying down there. And so the job had moved down there for was was you know, getting much slower and the writing was on the wall there that this isn’t going to last forever. So so we made it another bold decision, we had some cash from the sale of the two office buildings. And we know we save some cash to to protect this with the storage, we decided, let’s keep the storage. Let’s sell everything else liquidate and ended up we ended up traveling abroad for another three years by a sailboat. So

Neil Henderson: 15:18

well, we would love to, at some point, we’re going to have you back on the show, we have what we’re going to call detour episodes where we, you know, interview people not really regards to real estate, and that we’ll have you back on and get more detail on some of your adventures, but

Brittany Henderson: 15:33

Okay, perfect. Alright, so with all this what is what’s your destination with real estate investing? Where’s this?

Erik Hemingway: 15:40

So yeah, so will will, will bracket the sailboat years there and fast forward 2000 basically 2013, we came back to the United States where we were gone almost five years altogether, and decided to relocate to Wilmington, North Carolina still had the storage in Arizona, which by now was generating a little cash flow, you know, maybe 1000 1500 a month, which was great, but we’re still banking, it all just didn’t have a buffer there. So then we got to Wilmington, North Carolina just basically started over, you know, we didn’t know anyone, we literally sailed here, so had no house and no job and just started over. So you know, trying to get plugged into the local Ria meeting meeting people making contacts and trying to decide what was next. And and to be honest, you know, spent it was the resettling or re entering the society, or what have you is, was was as every bit as challenging as the sailboat, if not more. So it was very, it was a dark couple of years that for me, you know, the sail adventure was over, it was kind of back to reality, I would have preferred to keep traveling. But you know, of course, our kids were older, they wanted to get plugged back in, and all those kinds of things. So it was it was a lot of unknowns there. And and I’d really didn’t know what what to do, I didn’t feel like I had the context to start over. And construction, again, the economy was just starting to come back to life here. And so it wasn’t like, you could just go throw up a speck and feel like you’re going to sell it. So you know, we spent quite a bit of time I looked at doing starting a landscape company, I used to be a chimney sweep in a previous life. So I thought maybe I can do that here. You know, I printed cards for all these businesses that that I never even started. And after about a year of that I said, I just got to go back to construction is what I know. And we actually put the nail bags on my son and I and my son in law just started picking up whatever we could find, you know, framing jobs or renovation jobs, just, you know, kind of started back from scratch and trying to make a living. So that was a that was a tough time. It wasn’t till probably 2014 that we decided, you know, we felt like the economy was strong enough. And things were starting to look up that we started actually buying our own properties. And you know, through hard money loans or whatever, you know, whatever options are available when you’re when you’re starting back out. And then we had a rental house and then we ended up buying a triplex that we renovated and use for Airbnb. So we did that for another couple of years. And then it was 2016. When we you know, we were all working hard, same kind of thing, you know, framing and doing the remodeling ourselves, you know, we were actually out there pounding the nails, put the roof on all that kind of stuff. And I thought I just I just can’t do this anymore. I’m 45 or 44, whatever it was at the time, and I thought there’s got to be an easier way. And by this time now 2014, the storage in Arizona was doing well. And finally had turned the corner I thought, you know, felt like we were in a good place. And I said, let’s let’s look at the option of doing more storage. That’s when we we came across the building here that we converted, it was a warehouse, a printing warehouse, and then we converted to storage, and then leverage that were able to do another storage. So we actually have two storage properties here and still the one in Arizona. So does that answer the question? Or what was the question the end goal?

Brittany Henderson: 18:55

So what you’re you’re accumulating property? What Yes,

Erik Hemingway: 18:58

the goal is okay, good. So the goal is more of residual income, obviously, it’s really the direction we want to go we have a lot of different hats. And in irons in the fire we have a construction company that I’m still mostly involved with, that’s my 30 hours a week is in a construction company, but we use that to build houses that we’re going to keep as rentals or what have you, we want to continue with storage, you know, now my kids are older, I’ve got a 23 year old and a 24 year old and I’ve got an 18 year old and so you know, we just want to keep building kind of a family Empire, you know, we’d love to keep you know, as whenever kids want to work in the business, I’d love to have them, I think it’s a great avenue for them to to be able to invest their money, they kind of see what we’ve been able to do and and want to get in on some of that. And I’m happy to help. And we just want to build something together. And I think the goal is that we all have something that obviously Rachel and I can pass down but that the kids can work in and build their own residual income and their own passive properties, whether it’s apartments or single family homes, or what have you. So yeah, that’s the kind of the direction we’re heading. I love that you, you use the term residual income, sort of what I prefer to call it overpass, so many people call it passive income and right, and then that gets kind of a dirty word because it’s you know the word all the Guru’s use. And, and it’s not most of it’s not completely passive. But right, what I like about it is what the way I think of it is that it’s it’s something that continues to pay you long after you’ve put in the work right to get it going. Now it may it may still require some continued work. But that work is more along the lines of blowing on the hot coals as opposed to start trying to get the fire started. That fantastic analogy there. Yeah, and and passive does sound too good to be true or too easy. And and eventually I made in my mind, passive income is still down the road for us, we’re still pretty involved in the in the different businesses, but it is residual and it’s getting more so as we go. So the amount you get paid is not proportional to the amount you work. And that’s what you want, you know, you want to get paid more than you work. And I have always been I’ve always tried to just as soon as we finished one project or one investment to just redeploy that money as quick as possible into into the next thing sometimes to a fault where you find the next thing before you’re done with this thing. And and that leaves you strapped for cash and all, you know, trying to keep that balance, but definitely no money is sitting around doing nothing. You know, everything’s back out into something.

Brittany Henderson: 21:26

Yeah. You said you say you’ve got the 3030 hours a week that you’re working on sort of more your construction company, how many other time are you spending on your real estate endeavors,

Erik Hemingway: 21:37

the storage, I have a manager that manages the property in Arizona, she’s been there for 11 years, she’s fantastic. She just handles everything, they’re collecting rents, you know, I don’t do anything day to day there, I just came back from a trip there, I make about one trip a year there and then probably involved three or four hours a month, I would say you know, just kind of answering questions, oversight, that kind of thing properly here a little more. So I’ve got a manager that does both properties. And we office in part of one of the buildings. So it’s, you know, we see it every day, but it’s not, I would say maybe 10 hours a month on the storage is here. So that’s, you know, we don’t we don’t I’m not really sure which direction to go with the construction company, because that is a bulk of my time, and probably, you know, maybe 20% of my income, you know, the 8020 rule is, is not working in my favor right now. But I recognize it, you know, I know at some point, it’s going to be handing off business to my son and you know, maybe son in law, they can they can kind of take it and I maybe I’ll take a backseat and just be an investor and find the property and finance the spec and they built they go build it, they call subs and do all that kind of thing. So that’s the direction I think we’re heading is, you know, a contracting company can be a great vehicle to have to keep in my mind. That’s our that’s still our track one, right, that’s our daily, you know, punching the clock, if you will. But we try to take whatever we make out of that and push it onto track to track to is all of our long term. As for now residual and at some point Long, long term. We don’t know what what’s what’s going to happen in 10 or 15 years, but maybe we’ll 1031 into do a 1031 exchange into like a triple net lease property. If you’re familiar with that whole process. Are you going to you’re gonna hit on those.

Neil Henderson: 23:23

Yeah, I understand. But Brittany says,

Erik Hemingway: 23:25

okay, okay. So, in real estate, you’re, you’re able to do what’s called a 1031 exchange. And that’s just the section of the IRS code that’s, you know, section 1031. Basically, you could sell any any asset and, and trade it for like kind. So investment property, you can sell it and buy another investment property, it could be you could sell a storage, you can buy an apartment building you could buy, you can sell a residential rental and buy a laundromat, it really is pretty wide open. But the advantage of it is any any gains you make on the sale is going into the next process, you’re not going to pay capital gains tax on that on that transition transaction. So and then, you know, of course, kind of what a lot of real real estate people will say is the holy grail of real estate is what they call a triple net lease where you know, the example everybody uses the Walgreens or maybe a grocery store, some fast food restaurants, Taco Bell, or what have you. They they don’t own their buildings, investors on the buildings, but they sign a long term lease for maybe 2025 years, where they’re responsible for maintenance, upkeep, air conditioning, spray property taxes, insurance, basically everything but the note and they’re committed to a long term lease, you’ve got a strong tenant, like an operator of a taco bell, and maybe he owns 20 franchises, and he’s your tenant. So you’ve got a pretty strong tenant there. And it’s literally you pay the mortgage note, and you get a check, or I guess the other way around, you get this, you get the check, you get the check, you pay the mortgage, and it’s it’s literally, you know, that is in my mind, that’s passive income. Yeah, you already log onto your phone and and make sure the deposit happened and the payment was sent. And that’s it. I mean, that’s as easy as it gets. So I’m not there yet, you know, who knows, maybe that’ll be some someday down the road. Yeah,

Brittany Henderson: 25:12

thank you so much for explaining that. I think one of the things that we want to do with this, with this podcast is to help educate people who maybe aren’t in the spot that you’re in, or my husband is in and I’m still sort of learning and I haven’t been as much of a full partner in the prep, like the process. Sure. Absolutely.

Erik Hemingway: 25:33

It’s, well, it’s, you know, I mean, that’s, that’s all of us, we’re all learning. You know, I think it’s just important to just keep learning. I mean, that’s something I’ve always I’ve always tried to impress on my kids and myself is just you can’t stop learning, you know, because there’s, there’s so much knowledge to gain First of all, but then there’s so much so many things changing all the time as well. So I just finished up a tax book, you know, an audiobook this past week, just maybe it’s something I haven’t heard, I haven’t heard I learned a ton from the book, you know, and and I listened to a lot of podcasts as well. And there’s so much knowledge out there that it’s nobody’s further along the road. And it’s just a matter of what you know, it’s it’s not it’s just a matter of keep keep filling yourself with that knowledge. It’s great.

Brittany Henderson: 26:15

What’s the tax book, so we can put it in the show notes for everyone who wants.

Erik Hemingway: 26:19

It was tax free wealth, Tom wheelwright, it’s part of the rich dad series.

Brittany Henderson: 26:24

All right, we’ll put that in the show notes. Yeah,

Neil Henderson: 26:26

sure. Well, let’s talk. Let’s talk education. You know, when you, you sort of learned real estate organically sort of being a general contractor and things like that. But once you decided to go into storage, how did you get yourself educated on that niche,

Erik Hemingway: 26:40

though, what we, what I started out doing was my wife and I went to Miami to a trade show. I think it was inside self storage, and there twice a year or once a year and there’s another one Self Storage Association, which is in Vegas, where you guys are at went there just kind of a crash course met vendors look at doors styles. And you know, of course, there’s there’s some breakout sessions for new owners and just kind of kind of dove in and try to figure out what what is this industry about? And what’s the pros and cons and all that kind of thing. So that was our first step.

Brittany Henderson: 27:13

Is there anything else that you’re doing? To continue to educate yourself? Or any favorite books or podcasts you want to recommend?

Erik Hemingway: 27:20

I listened to a lot of bigger pockets. I listened to Joe Ferris best real estate ever. best ever. Best Ever real estate podcast? Yeah, there’s a there’s a lot of great information out there. So those those two are probably most consistent.

Neil Henderson: 27:34

We already sort of talked about how much time your endeavors take each week. But are there any sort of systems that you’ve maybe developed to kind of leverage your time and remove yourself from the process?

Erik Hemingway: 27:47

Well, that’s, that’s a great question. That’s kind of where I’m at right now is how to kind of get other team people in here to kind of let me free up a little bit, I’m really trying to hone in on what my strengths are. I really like finding the deal, crunching the numbers, trying to see what maybe other people missed and opportunities to add value to an existing property that might be underperforming or mind having be used in the right way at all. And that’s really fun for me and, and trying to just look at things creatively. I don’t like the bookkeeping part of things. I I’m doing it right now. But I don’t like it. You know, I really like just putting the pieces together and then setting it in motion, and then kind of letting it letting somebody else finish it. I’m a starter. Yeah, not the not the finisher upper. Here. That makes sense.

Neil Henderson: 28:32

Totally. So you recently hired you said the recently hired a manager to manage your I know, you have the manager in Arizona. Correct? Correct. And Jason both, and I so how did you how did you go about selecting them.

Erik Hemingway: 28:46

So both of them just kind of came to us, we didn’t advertise for it. The person in Arizona was it was a situation you’d never done storage before. And she learned, you know, along with me, really, I sent her to some seminars and get were some resources websites to to learn and she’s learned kind of on the job, you know, as we’ve as as we’ve gone, and now she’s fantastic. You know, I would have no question no trust 100%, no doubt that she’s looking out for our best interest and, and just a great manager. So so the guy we’ve got four here, as actually a family friend, and he was looking to make a career change. We had lunch one day, our wives are really close friends. And the four of us went out for lunch. And we thought, you know, they said, We want to talk to you about your business. I thought he wanted to invest, and maybe do some finance some spec houses or something. And, and we had the legend and he said, I’m looking to leave the company I’m at and just wonder if he had a spot for me totally caught me off guard, you know, drove away, we drove away from the ledge thinking that that is not the way I thought that was going to go at all. I was all ready to pitch him like returns and how much percentage I could pay and all this kind of stuff. And so I thought about it for maybe a week or so. And I thought, yeah, he’s looking for a job. And we’re probably going to be looking for a manager, I bet it would be good, great fit, I think his personality would be perfect for for what we need. And so we came back to him and said, What do you think about this, you’ll office here and you’ll run these two stages. And same thing he’d never done storage before. He’s got a background in accounting and marketing and done a lot of different things. He just finished work as a, like an ocean tech, you know, on a boat where they monitor deaths of channels, and sounds and all that kind of thing on the east coast. So it’s totally different for him, but but he was away from home a lot. And that’s what he wanted to fix. So we we brought him in, kind of turn it over to him, I figured it’s easier to just I mean, I’m not a great manager, I recognize that I’m actually a terrible Storage Manager. So there wasn’t a lot for me to teach him about it. So I let him kind of go, I put him in the place. And then we actually already had a trip planned. So we closed on our second property here. He started shortly thereafter. And then we actually already had a trip plan for two weeks later. And we were out of the country to Southeast Asia for the next three months. So I figured well, this could go to two ways here. And it was it wasn’t never a trust issue. And he’s a great thing on his feet person and just go in and I said, you know, here’s I just laid out the rule. I think I gave him three goals. I said, I’d love to see, you know, when we inherited one of the properties, there was a high number of delinquencies and people not paying that was one of his task is with all these delinquencies down, try to get this other property to X number of percent. And we’re on lease up so I don’t remember, take it from 30 to 45%, or whatever the numbers were and and he did fantastic. We were available by email. And I think he contacted us three or four times in three months. So it was pretty, pretty minor. You know, he figured a lot of stuff out of his own. He’s a researcher guy. So he dove in and learn the software. I brought my manager from Arizona here when he started and we spent two or three days together just kind of a crash course. Here’s how you, you know, move somebody in, transfer him to another unit, you know, move them out, you know, all those kinds of things. And and then that was it. So. So here’s the here’s the sheriff’s that you’re in charge.

Brittany Henderson: 32:04

So hi, your friends. That’s lesson Yeah, well, yeah, yeah.

Erik Hemingway: 32:07

So I mean, I could go it could go both ways, I guess. But we’ve been very blessed and fortunate. We’ve got some great people. And and I think anybody will say that, you know, the difference, of course, in any businesses is your people, you know, you hire great people. And that’s just let them let them do their thing. I’m not a micromanager. It’s just that I just don’t have the energy to, you know, do my job and years. So I just assumed turn it over to you. Of course, there’s going to be glitches, just plan for that. And there’ll be things that you would have done differently, but that’s okay, too. You know, I mean, it’s just I like to give them ownership of their position. Awesome. Moving away from that. So right now you have properties in Wilmington, where you live and then you’ve got the the property in Arizona, do you plan to do any more long distance investing? I don’t think so. I think there’s a lot of opportunities here. Last year, we bought a an apartment building just outside of Wilmington, it’s up in another city county Pender County, I’m in a town called Hampstead and it’s we bought it with it under syndication, which is like a partnership for one specific project is a is a good way to describe a syndication and so we we kind of dabbled with that I wanted to try it because we’d eventually like to do syndication on self storage and do some more projects, bigger projects, maybe. And I think there’s just a lot of growth happening here. If I didn’t have the manager I have in Arizona, I would definitely consider probably selling that property and and, you know, exchanging it from one closer to home. I know a lot of people are all about estate investing and all that. But I think there’s a lot of opportunity, right in most people’s backyard.

Neil Henderson: 33:40

Awesome. Great. So what do you think is the most critical skill for someone who’s entering the Self Storage market to develop in themselves to master that niche?

Erik Hemingway: 33:52

Oh, that’s a good question. I mean, from my experience, I guess I would have to say flexibility. Because things don’t always go according to plan. And I think you have to be willing to you know it or change directions if need be. I think that would probably be it. Because there’s always something else to learn something else to that didn’t go according to plan. And just being able to adapt, I think is is probably pretty helpful.

Brittany Henderson: 34:16

So if you could hit a magic reset button and go back in time to start your investment journey over again, is there anything that you feel like you would do differently? Any systems you might have put into place or anything else? Well, that’s a hard question.

Erik Hemingway: 34:31

That’s a hard question. I guess, I guess it’s a good question. Because he, I mean, you hopefully you learn some lessons back, you know, from what you could have done differently to go forward don’t typically look backwards too much. You know, it’s more like where here’s where we’re at now. And where are we going? I’m pretty happy. I think we’ve taken some big risks personally and in in business, and have been really fortunate that they’ve that they’ve come, you know, through like we hoped they would. So I suppose I would maybe not take as many as bigger risks. Just so fewer sleepless nights, I suppose. But then on the flip side, of course, you wouldn’t you wouldn’t, you know, we wouldn’t be where we are. So it’s it’s hard to say, I don’t know if that answered your question, or not too? Well,

Neil Henderson: 35:10

Good answer. So I want you to imagine that you’re standing in a room full in front of a room full of aspiring real estate investors, primarily people, you know, who have a job and families and maybe they’re constrained on time, and they haven’t done their first deal or things like that, what sort of what strategies would you suggest for them,

Erik Hemingway: 35:31

that’s good, that’s, I’ve got a close friend, that is just making the transition from day job to full time investor, we talked quite a bit. And I think education is huge, you know, just becoming familiar with the business as a whole. And all of the terminology and just anytime you can devote to learning to pieces, I think is a great is great, you know, inspiration as well as education, you know, things like bigger pockets, you hear a lot of episodes about people that started with nothing and built 30 rentals or 50, rentals or whatever. And, and it’s still possible, I think real estate is still an amazing vehicle, except for maybe if you’re super lucky with a.com, you know, a tech business, I just don’t know of any other way you can build wealth, besides real estate, you know, as quickly and as you know, creatively, that’s one of the things I love about real estate is there’s so many different avenues about it, you know, residential rentals, apartments, storage, leasing, you know, there’s so many ways to do it. And so I would, I would encourage somebody to educate themselves. And then to start small, try to get some partners together to maybe go in on a rental house or a fix and flip, and then you’ve got some cash and you don’t need, you know, maybe you bring in three partners. And then you could you know, the next one, you can do one partner, and then you’re doing one on your own. And it’s so hard, I think to get the first step, you know, and and I would just encourage people to take whatever steps they can to make that first step. And then then you get momentum, you know, you see you close the deal, you made five grand on top of your investment, and hey, it worked. So now it’s a matter of scale. So you know, you know what you did, and and now you can do it again. And then if you want, you can go bigger, and then you can more more of them or whatever, whatever the case is. So it’s I know, it’s really, really hard to stand at the edge of the cliff and take that first step, you know, on the trail. But that’s education, and the first step, some wise words, and I absolutely agree.

Brittany Henderson: 37:28

All right, we didn’t really talk about your your traveling, but it you have recently written a book about your your family travels, you want to tell us a little bit about that?

Erik Hemingway: 37:38

Yeah, yeah. So it’s an E book that I wrote with my daughter, Maggie. And it’s just steps to take your family traveling. It’s not, it’s a great little read. It’s just kind of some bullet points, we look back on what we did to kind of the steps we took to take our family traveling. And I know there’s a lot of people that would love to do that. And so that’s it’s just kind of a bullet point thing of what we did. I’d be happy to give you a link for that. You can put it in the show notes.

Neil Henderson: 38:03

Yeah. Let me share with you. And I’ve actually read it. It’s a great read. Oh, good. You know, it’s more it’s not. It’s different from someone, hey, you’re going to take your family traveling for a week. It’s how how are you going to steps you’re going to take to take your family traveling for a long period of time.

Erik Hemingway: 38:19

Yeah, true. Yeah. Thank you very much. Yeah.

Neil Henderson: 38:22

And you I’m going to I’m going to skip this kind of battery here for a second. Eric also used to host a fantastic podcast called the family adventure podcast. And it’s on hiatus. I like I prefer to call it on hiatus. I’m going to try and get try and talk Eric and getting back going.

Erik Hemingway: 38:39

I know I know. We’ve after the trip to Asia, we’ve we’ve had a few false starts. We thought we were ready to get to dive back in. And it’s just I think it’s one of those things for us right now. It’s just one thing too many. We love doing it. I mean, we finished 150 episodes, which was kind of our goal. And we did that it was kind of the the book k pop is on in Gary Williams, Gary Keller, Keller Williams real estate, the one thing and that’s a great read, you might put that in the show notes as well. It really helps you focus on where you’re going and and is this contributing to my one thing, and it came down to the podcast just wasn’t wasn’t part of the one thing. So

Brittany Henderson: 39:16

you got to get those. Jason Yeah. And the things you you don’t want to be doing so that you can get back on it. No, that’s right. Dance, monkey dance.

Erik Hemingway: 39:28

It was fun. Medic, a lot of fantastic people, as I’m sure you guys will, on your podcast journey met some great people all over the world. And it was really fun to meet up with a few people in Asia that we’d had on the show and then get to meet them in person. And that was that was pretty special.

Neil Henderson: 39:42

Yeah, I still curse your name for introducing me to the bag bomb.

Erik Hemingway: 39:48

I know I had to quit watching it. I just can’t do it. It’s just

Brittany Henderson: 39:52

no time. Neil starts where I’m like, no, we’re not doing that. I know.

Erik Hemingway: 39:57

But whether or not you do it is still it’s like just the fact that you know, there’s people out there doing that puts me in a bad mood.

Neil Henderson: 40:03

Yeah. totally true. Actually. I know. Sometimes. I know.

Erik Hemingway: 40:07

I know. That’s why I had to quit.

Neil Henderson: 40:09

Yeah. This is really amazing. But it’s actually putting me in a really crappy

Erik Hemingway: 40:13

mood. I know. I know. I know. I know. Exactly. So I’m happy. They’re out there. I don’t wish him any ill. Well, I think that’s fantastic. But yeah, it’s better that I know they’re not there. Yeah.

Brittany Henderson: 40:25

Let’s plan our own trip.

Erik Hemingway: 40:26

Yes, that’s it. There you go.

Neil Henderson: 40:28

Yeah. Well, listen, Eric, it’s been so great having you. We always love talking to you. If any of our guests want to reach out to you what’s the best way they can reach you?

Erik Hemingway: 40:36

Ah, let’s see. I guess the best way is family venture podcast calm is a website or we’re building our I mean, if they need storage, they can always go to our storage website. No, I’m just kidding. But we were getting our construction page up on builders.com is our construction company. And it was started when we had three kids, Emma Levi and Maggie. So that’s what the Elm is for. And it’s just on builders talking calm. It’s it’s we’re getting that thing up shortly. And so people can always go there. See your projects you what we’re doing. There you go. All right.

Brittany Henderson: 41:06

We’ll put it in the show notes. Yeah.

Neil Henderson: 41:09

It’s been been great talking to you.

Erik Hemingway: 41:10

Yeah. great talking to you guys. Yes. Thank you so much for having me on. And best of luck. I know you’re going to do well. Thanks. Thanks. All right. Cheers.

Neil Henderson: 41:20

And if you like this podcast, we would really appreciate it if you take just a few minutes and leave a review for us on iTunes. It’s really simple to do. Just go to road to family freedom comm slash review for links and instructions. Thanks for listening. We’re doing this all again next week. Until then, safe travels.