How to Achieve Family Adventure using Self Storage with Erik Hemingway

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.

Welcome to the road to family freedom.

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.

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.

Welcome to the road to family freedom.

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

to have you here.

Oh, thanks. Thanks. A quick update.

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

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.

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

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?

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?

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,

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

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?

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,

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

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

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

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.

Yeah, I understand. But Brittany says,

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.

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.

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

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

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

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,

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.

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

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.

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?

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.

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.

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.

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

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.

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?

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.

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.

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,

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,

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.

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?

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.

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.

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

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.

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

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.

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.

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

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

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

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.

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

I know. That’s why I had to quit.

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

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.

Let’s plan our own trip.

Yes, that’s it. There you go.

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?

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.

We’ll put it in the show notes. Yeah.

It’s been been great talking to you.

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.

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.