From Kmart to Cash Flow: Neil Henderson on Self Storage Syndication and Conversions

Neil Henderson (00:00)
I had no business being at the conference that I went to in February of 2017.

But I sat down at a lunch buffet table that changed the course of my life when I met my business partner, Eric. So you never know where a relationship is gonna lead you. So get out there, meet people, pick up the phone, call people, reach out to people. At the end of this podcast, I’m gonna tell you how to reach out to me. And I can tell you most people don’t, but you should.

Quentin (01:59)
Hello, everyone. Welcome to the Real Estate Pros podcast. I’m your host Q Edmonds. You’ve seen me enough. You follow me enough. You know what I’m going say next. I’m excited to be here. I really am. I get so excited. And again, if you all probably know what I’m about to say, just meeting new people, getting to see things through their lens. We all could literally be doing the same thing, but still, because we are unique in the way we do, unique in our processes.

we’re still going to learn something different from each other. I always think about, I like the white baking shows. a lot of bakers are entering competitions and they’re baking the exact same thing. And the cakes never come out looking the exact same way, even if they use the exact same ingredients. And I feel like that about this real estate space is that whatever we’re doing, our processing is different. So it’s always going to be a different outcome. And so I’m so excited that we get to peek through the lens of someone

I’m interested in new today. Someone knows what they’ve done. I’m very good at what they do. And I’m going let them explain everything that it is that they do. But I’m so excited to introduce you all to Mr. Neil Henderson. Mr. Neil, how are doing today,

Neil Henderson (03:08)
I’m doing great, Q. I’m excited to be here as well. Thanks for having me.

Quentin (03:12)
Absolutely, man. So glad you’re here. And listen, Neil, I want to dive right in, man. I would love for you to tell the people what your main focus is these days.

Neil, if you can give us a little bit of an origin story, kind of how you got into the space where you are now. We love the hero’s journey. I mean, we absolutely love the hero’s journey. And then, tell them where you are in the world. People love to know where you are geographically, especially if they’re like, he’s right next door or he’s one town over. Like, how can we really get in contact with this gentleman? So what you’re doing, your origin story and where you are. Mr. Neil, sir, you have the floor.

Neil Henderson (03:45)
All right,

I’ll give you the high level to keep this short. I’m Neil Henderson. one of the general partners and the director of investor relations at Nomad Capital. We’re a Wilmington, North Carolina based self-storage investment firm, a little boutique firm. Some people have called us the craft brewers of self-storage. And our specialty is self-storage, but with a little bit of a twist.

Quentin (03:49)
Gosh, yes, sir.

Neil Henderson (04:11)
primary focus of the last five years has been self storage conversions. We take old big box retail buildings, grocery stores, old K-Marts, mills, textile mills, things like that. We convert them to climate controlled self storage across the Southeast, primarily Virginia and North Carolina, South Carolina, Georgia. And we’re currently looking in the Florida market. My origin story is I got, I was a

I had an 18 year career as a defense contractor, so nothing really state related. It was based in Las Vegas, Nevada. It’s where I grew up. Got involved in real estate and then eventually found myself in the commercial real estate space. Met my now business partner, Eric Hemingway, at a real estate conference in 2017. We hit it off. We’re looking for ways to partner for years and years.

And it took until November of 2021 before we started syndicating our self-storage deals. And that’s when Nomad Capital formed. And that’s where I sit today.

Quentin (05:16)
I love it. Thank you. Thank you for taking us through the journey. Thank you for letting us know what it is that you do. Welcome us to the origin story and no, no, that I got it. No, that is a no, that storage. Give me any. Give it to me again. I’m so sorry.

Neil Henderson (06:17)
Nomad Capital is the name of the company. Yep, yep. All good.

Quentin (06:18)
Okay, thank you. I apologize. And the reason

why I promised you I’m actively listening, because I was writing down different things that you said, because I was like, I want to get back to Nomad Capital. But I was listening to you.

I love how you say y’all the craft bureau of storage. I wrote that down. think that’s an absolutely incredible line. Eight years, 18 years as a defensive contractor, you met Eric around 2017. So 2021 y’all started syndicating deals, right? And I regurgitate these things that you said to us because I like to say this probably every podcast now that destiny has no wasted moments.

Right? Meaning no matter what we’ve gone through in life, they build to where we are now. We are a compound of the moments. Right? And so once you, sometimes when you reflect, you look back and just see kind of like the breadcrumbs, they kind of led to where you are now. Why you got the mindset that you have now. Sometimes while you fight so passionately for what you fight for now, like it’s just leading up to these moments. And so Neil, I would love to ask you throughout your life, throughout the moments,

Neil Henderson (07:05)
It’s absolutely true.

Yep.

Quentin (07:33)
18 years as a defense contractor, meeting Eric. What has these moments taught you about yourself? Has it taught you discipline, resilience? it seems like you already know. So please, Mr. Neil what has these moments taught you about you,

Neil Henderson (07:47)
That’s a great question. the answer is I don’t know. You know, it, I’ll say my time as a defense contractor gave me a real insight into systems and processes. Anybody who’s been involved with the military at all, and I was a civilian, but deeply involved with the war fighter, systems and processes and SOPs, they’re everywhere.

And also I’m sort of jokingly referred to around our office as kind of the SEC compliance officer. worked, I worked in a lot of high security during my time as a defense contractor and got, you know, used to following rules. And, and sometimes, you know, somebody will come to me and say, Hey, can we, can we do this? I’m like, I’m not an SEC attorney, but I would say no. And so sometimes I have to be the bearer of bad news and be the rule follower.

I, I got, I fell into real estate investing. bought my first house in February, 2005 in Las Vegas, Nevada, and, bought it after it was a year old condo that had doubled in value in a year. First lesson learned was maybe don’t buy something if it’s doubled in value in a year. don’t be that guy, be the guy that buys it and then watches it double in value a year later. so I lost the, I actually ended up losing that.

condo in the Great Recession. Had to sort of rebuild my financial life there and then got in, sort of fell into real estate again in 2014 and discovered how much I resonated with commercial real estate and ended up at a commercial real estate conference where I met my now partner. I guess one things I learned

I ended up working with my dad for a lot of my defense contracting career. And he used to say, you know, if you love what you do and you love the people you work with, you’ll never work a day in your life. And that was very much how he lived his life. And now that’s where I am now. And I love what I’m doing. If you told me that I would love being in self storage 10 years ago, I thought you were crazy. ⁓ But I love what we do and I love the people I’m doing it with.

Quentin (09:43)
Mm.

Yeah.

Neil Henderson (10:36)
even in the most challenging times, it’s still a lot of fun. I love coming to work every day.

Quentin (10:41)
Yeah, I love it. Thank you, man. Thank you for that reflection. And I would imagine, so I’ve talked to, of course, have people on that was in a self storage space. So I’m not an expert. So, but I think some of the things that they talk about why they love self storage is because they say, is no toilets, termites, and what’s the other thing is I can’t remember. You know what I’m saying, right?

Neil Henderson (10:51)
Sure.

Yeah,

no tenants, trash or toilets, I think is the phrase we often use, yeah.

Quentin (11:05)
Right. Yeah, yeah.

And I would imagine you being a system person that self-storage is a system that you kind of run over and over and over again. Is that correct?

Neil Henderson (11:17)
A little bit. Yeah. And I can’t speak, you know, I’m we have city storage management as our, our asset management company there that manages our storage under that brand. And I can’t say that I’m intimately involved with the day to day of that. I’m more on the investor relation side and just the general partner side. But it very, it very much is. Yes. I mean, you have, when you’ve got facilities spread across multiple states, multiple municipalities, you know,

Quentin (11:24)
Gotcha.

Okay.

Neil Henderson (11:45)
managers who are, you know, they’re a lot of times they’re 45, $55,000 a year employees. So, you know, you really need to have your systems and processes dialed in. We’ve got a fantastic operations manager in our company named Josh, Josh Mundy. And then we’ve got Cindy Ashby is our operations of our storage group. And she came up through Pinnacle Storage, which is a big local

sort of regional player here in North Carolina. And they’re both outstanding at developing those systems and processes. I can’t say that it’s just something that you just set it and forget it because there is a lot of nuance to self storage that I was I had no idea until I got into the business.

Quentin (12:34)
Thank you for that insight. appreciate that. So Nomad Capital, now that I got the name right, Nomad Capital, what is the next real goal for you guys? What are you looking to solve at scale next?

Neil Henderson (12:48)
Yeah, I mean, we’ve got about $100 million in assets under management. We’ve got 12 facilities, actually 11. We sold one this last week, a full cycle project this last July and sold that one. We’ve got nine operational facilities and two under development right now. And we just brought on a new partner who’s an acquisition specialist. He’s been in the business for

15 years worked with a very large storage group and he’s based in Florida. And that’s kind of where we’re looking right now is to break into the Florida market and do some more ground up development, which we’ve done. But we sort of took a step back from it after COVID just because we didn’t really see the opportunity there and we were finding more opportunity in conversions.

Quentin (13:40)
Yeah, yeah, I love it. So you have a partner, Eric Hemingway, right? Eric Hemingway, did I get that name right? Met him in 2017, just put on a new acquisition partner. So when you hear this word, Mr. Neil, I want you to answer it based on whatever resonates with you, relationship. When you hear the word relationship, what resonates with you with that word, Mr. Neil?

Neil Henderson (13:47)
Eric Hemingway. Yep.

Well, I hate to be a cliche, but real estate is a relationship business through and through. Everything from the partners, you know, I’m in syndication, which is very much a team sport. You’re not going to meet many syndicators who are one man operations. If they are, they’re a very, very small group. And so, you know, you have to build out a team. You have to build up relationships with

Capital partners, everything from large JV partners, family offices, fractional family offices to retail investors and build up those relationships and get people to know, like and trust you. ⁓ So that’s really, that’s oftentimes what we’re looking to do is just to get to know as many people as we can and get to know what their…

goal is and whether or not their goals align with what we’re doing and just build up that relationship.

Quentin (15:05)
Gotcha. I love it. Another question, another one word I’m going to throw at you because I want to hear your perspective on this. And so you talked about, you know, no like and trust. And for me, I think that comes down to one word, integrity. So when you hear integrity, Mr. Neil, what do you think about when you hear that? resonates with you with that?

Neil Henderson (16:05)
Well, I would say for me, integrity means doing what you say you’re going to do and doing the right thing, even when things, when that thing is hard. I can say right now, anybody who’s in the self storage space or the commercial real estate space period right now has been challenged over the last five years. some catastrophically I’ve had, I’ve had, multifamily projects that were total losses on in my own portfolio. know a lot of friends.

who are, I know a lot of self storage operators who are struggling right now, not as much as multifamily is, but it’s a tough time in the retail sort of investor syndication space. And doing what you say you’re gonna do even when things are hard is vitally important right now. And.

You know, it’s sometimes hard having conversations with investors when things are not going exactly how they hoped they would go and having to have those conversations explained to them to the best of your ability, what’s going on, what you’re doing, ⁓ and just putting your face in the fan and having those hard conversations. And for me, that’s integrity. The people who are not operating with integrity right now are ghosting their investors when things go bad. And I’ve seen that as well, and that’s not acceptable.

Quentin (17:27)
Mr. Neil, sir, I appreciate you, man. I appreciate your answers. I appreciate your thoughtful answers. I appreciate your self-aware answers. And I think people listening, that’s going to make them better business owners, better investors. Because I say this, Mr. Neil, the one constant thing in your business is you. Things, like you said, things may fluctuate. Things may go up and down. You may have to pivot. But one thing that is constant is you.

in your business, your integrity, the way you handle things, the way you overcome things, the perspective and the way you see things, the perspective and the way you see yourself. And so I just appreciate your eloquent, very thought out answers. Is there anything, Mr. Neil, any topic that I have not brought up that you would like to talk about? Or is there any kind of words of inspiration, education, motivation? Like if you came into this podcast episode with something on your mind that

Hey, I wanna make sure people know this. If it’s something like that, I just wanna open the floor up to you to be able to deliver that message.

Neil Henderson (18:31)
Well, I would say like we, you we, mentioned the word relationship. This is a relationship business and you know, I grew, I, as a baby real estate investor, I listened to a lot of podcasts and I spent several years listening, just listening to podcasts and just absorbing. I called it sort of eating at the buffet table of different real estate strategies, but just at some point you got to get out and do.

⁓ You’re only going to learn so much from a book. You’re only going to learn so much from listening to a podcast. And so get out there and meet people who are doing it. Have conversations with them. Even if it’s not necessarily something that is going to lead to a direct business relationship, you never know where things are going to lead.

I had no business being at the conference that I went to in February of 2017.

But I sat down at a lunch buffet table that changed the course of my life when I met my business partner, Eric. So you never know where a relationship is gonna lead you. So get out there, meet people, pick up the phone, call people, reach out to people. At the end of this podcast, I’m gonna tell you how to reach out to me. And I can tell you most people don’t, ⁓ but you should.

And, because I love talking, I love talking to real estate investors. love, you know, even, even if someone who’s not going to directly invest with me, it’s still usually a great conversation. I learn things and, they learn things. And that’s really my recommendation to people is get out there and meet people.

Quentin (20:12)
I love it. Listen, very, very quick story to your point about just getting out there and doing it, right? So only so much you can read, only so much you can listen to. So Mr. Neil, a couple of weeks ago, I had a plumbing issue here in my house, right? And so I wanted to save us some money. So I was going to play Mr. Plumber. And so I got all of the… I got the…

the blueprints, the instructions, I had all the instructions in front of me and everything looked very simple. I was like, it’s in front of me. And so once I started, I see you, I told the story twice and I got that same look when I told it the time.

Neil Henderson (20:50)
I can just second second

see where this is going.

Quentin (20:54)
This is what I learned. I seen what needed to be done. And when I tried to do it, I had to learn some things from experience. It was telling me to do some things and I could see how to do it, but how to do it was a little bit more difficult. And so what wind up happening, I reached out to a plumber and he gave me a very, very good tip that I would have never got from the paper. He said, you need a certain type of tool. He said, you need a bass and wrench. So I said, ⁓ wow.

So I went out and bought that tool, the Basin wrench, but my plumbing was so old that I couldn’t use the wrench that I actually brought. So I had to wind up, you know where that went. I had to wind up hiring somebody to do it. But what I learned from that is that sometimes things look easy on paper, but until you actually start getting involved and getting the experience, you feel like that you need different tools. And then sometimes you’re not proficient in that tool. So either you can get proficient in that tool or you can partner up with somebody that not-

not only is proficient in the tool, but also proficient in the craft. And so I think tying everything you said together, sometimes you have to get up off the bench, gotta stop reading about it and just dive into it because you’ll learn and it’s not a failure. And I mean, that thing haunted me probably for a week because I felt like I failed. But when I looked back at it, I was like, no, you I learned a very valuable lesson about myself.

Sometimes you try to save money and you spend money that you didn’t have to spend just to spend more money to hire somebody that could actually do it better than you. Again, it’s just this whole ecosystem of just learning and you will not learn sometimes until you actually get out there and do it. And I don’t, now today I don’t feel like I lost anything because I actually learned a whole lot. And so, and I know now I’m not a plumber.

So now I can use my tool set to sit here and have conversation with Mr. my talents at good use. yeah, absolutely. Talk to me, Mr. Neil. Yes, sir.

Neil Henderson (22:50)
Yeah. So there are two lessons that I would take from that story. So

one is to fail fast and iterate. That’s something I really believe in. And that’s kind of what I say to people, you know, get out there and do it, you know, just start, start somewhere. you’re not going to start bench pressing 200 pounds right out of the gate, but get out there and get your reps in, you know,

take your lumps and learn from it and move on. Because you’ll learn a hell of a lot more from making some mistakes than you will from just reading a book of someone who figured it out and did it perfectly. And the second is a book called Who Not How. And that’s really, and you need to, if you haven’t read that book, I highly recommend it, you need to read that book. And it’s something I have to remind myself every day when I’m.

Quentin (23:42)
Yeah.

Neil Henderson (23:46)
what I’m sitting down to try to figure out how to do something. And I need to ask myself, is there somebody that’s gonna be a lot better at this that I can just hire to do it? Because my time is worth something. And as I grow and I get better, my time becomes worth more and more. And as I get older and my time gets shorter and shorter and you start seeing that,

infinite horizon getting closer and closer. And so there are people out there that know how to do the things that you’re trying to learn how to do. And if you’ve got the money, just pay somebody to do it.

Quentin (24:30)
This is the mic and you just did the mic drop moment, sir. So listen, if there’s someone out there that would like to get in contact with you, reach out, collaborate, get to know, work with you, how can they get in contact with you, sir?

Neil Henderson (24:44)
Yeah, go to nomadcapital.us. That’s our website. You can contact us there, making a schedule call. We also host a podcast called Truly Passive Income with my co-host Clint Harris. We release that weekly. Go check that out. We interview mostly doctors and other real estate pros that are in the syndication space and people who are trying to figure out how to invest in alternative assets passively. So check us out.

Quentin (25:12)
Listen, Listen, let me say three things to you sincerely. So first, thank you for your time, right? Because you know we can put a premium on our time, right? Our time is our most precious commodity. So I don’t take it lightly that you was here with us today. So thank you for your time. Secondly, thank you for your story and the gift of your integrity. I believe stories have a way of planting seeds in people that can literally course correct them.

Neil Henderson (25:28)
course.

Quentin (25:39)
or spark an idea that they never kind of thought about or blend that with the idea that they had and like, was the missing piece. And so thank you so much for your story, your narrative. I appreciate it. And lastly, thank you for your perspective, your mindset, the way you think and bringing that perspective to this platform. I greatly appreciate you, sir.

Neil Henderson (26:00)
I appreciate that Q, thank you.

Quentin (26:02)
Absolutely. Well, listen, y’all heard Mr. Neil. Please, the information that he gave is in the show notes. Check him out. Check out his podcast. Get in contact with him. But definitely make sure you are subscribed here. Because I promise you, we’re going to continue to bring up amazing people just like Mr. Neil. So sir, thank you again. And everyone else, please have a fantastic day. Believe it or not, it is your choice. I know that sounds crazy to some people, but it’s your choice to have a great day.