The Professionalist Real Estate Investing Podcast

Unlocking Wealth: House Hacking & Self-Storage Strategies w/ Neal Henderson

• The Professionalist Real Estate Investing Podcast • Episode 42

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What if a spare guest house could rewrite your relationship with time and money? That’s where Neil Henderson began—snapping a few photos, posting an Airbnb listing, and discovering how a small experiment could turn into a playbook for financial independence. From that first booking, Neil followed the signal: systemize, delegate, and scale. The journey led him through FIRE fundamentals, house hacking with a newborn at home, and ultimately to a business model designed to compress risk and simplify operations—self storage.

We explore how FIRE becomes tangible when you track net worth, reduce your biggest expenses, and anchor to a clear target. Neil breaks down why housing and cars matter far more than lattes, and how his Carolina Beach setup covers about 80% of living costs by renting the ground-floor unit while his family lives upstairs. He lays out a practical mindset path: start with Ramsey to gain control, then leverage Kiyosaki to reframe assets and debt. Along the way, he shares the moment BiggerPockets pulled him into the investing rabbit hole and gave structure to the math of freedom.

Then we zoom into self storage as a maturing asset class. Instead of 12-month leases and constant maintenance, storage operates on month-to-month terms with leaner expense ratios and stronger predictability. Neil explains why converting empty big box stores into clean, climate-controlled facilities creates value, especially as new construction slows and institutional capital searches for inventory. We talk transparency in capital raising, how to match investors to the right deal, and the counterintuitive trust you build by turning away misaligned money. For newcomers, Neil offers a simple filter: don’t shop IRR, shop operators—track records, references, and background checks beat glossy decks every time.

If you care about buying back your time, this conversation gives you a grounded path: house hack creatively, spend less on the biggest line items, and choose assets where the systems—not your weekends—do the heavy lifting. If you found this helpful, follow the show, leave a quick review, and share it with a friend who’s ready to trade hours for ownership.

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SPEAKER_01:

Welcome everybody to the Professionalist Real Estate Investing Podcast. I'm with with Neil Henderson. How are you doing, Neil? I'm good. How are you? I'm doing great. Well, Mr. Neil Henderson, he's a real estate investor, a co-host of the Truly Passive Income Podcast, and general partner uh at Nomad Capital. You got a pretty long rap sheet. I like that. So, Neil, your background is really unique and from nearly two decades of defense contractor to acting and then real estate. What was the awe moment that pushed you toward financial independence?

SPEAKER_00:

I say it's twofold. One, I was we had bought our first, my wife and I bought a house together, had a guest house at the front of it in Las Vegas, and it had for about 30 seconds it was gonna be my ultimate man cave. And my wife said, Oh no, no, that's gonna be the place where our guests come and stay. I I lost that argument very fast, one of many that I've lost since then. And we owned the house for about six months, and I remember Christmas Day on in 2013. My mom came to me, she hands me this article about this company called Airbnb. And she said, Hey, I think this would maybe be something you guys could do with your guest house when people aren't staying there. And I was like, Yeah, whatever, mom. But I thought about it for a couple of days, and then shortly after New Year's Day in 2014, I went out there, took some photos of it. I'm a photographer, and I listed it on Airbnb. Having no idea how to do it, I did a lot wrong, but within 48 hours, we had our first booking. And we were 65% booked from that date until COVID shut us down in March of 2020. And that was my first aha moment with real estate, where I was like, wow, this is this is easy money for the most part. I mean, once we got our systems down, once we weren't the ones doing the turnover, my wife and I were doing the cleaning early on. I was like, this is really easy. Started looking for some ways to scale that, to scale my short-term rental business. Las Vegas, by the time I started looking into that, Las Vegas was already becoming pretty hostile to short-term rentals. And but I found this article on a website called Afford Anything by a woman by the name of Paula Pant. She's a pretty well-known real estate influencer now. And the article was about how she she had converted one of her long-term rentals in Atlanta, Georgia to a short-term rental. And she was comparing the ROI on the on the return on time. Now, I don't remember much about the article, but I do remember there was this little link over on the right-hand side for a website called Bigger Pockets. And I clicked on that link and I went down the real estate investing rabbit hole. And that was really my first, I would say, the moment that kind of changed my mindset around financial freedom, around real estate, and everything.

SPEAKER_01:

Bigger Pockets definitely is a great resource for anybody who's starting in real estate investing or is in real estate investing because they have so many gyms to help you out into getting into real estate if you're uh if you're a rookie or a seasoned vet. It's it's a great avenue to go through. Well, you mentioned that you you're you've been inspired by the fire movement. What does financial independence retire early? What does that personally mean to you?

SPEAKER_00:

Well, it means that you don't have to sacrifice the healthiest best years of your life, trading your time for money in the hopes that one day you'll be able to stop working and do the things that you want to do with the people you love when you want to do them, at a time where your body starts to break down, and and a lot of times you can't do those things anymore. That's really what clicked for me. And it was the first time when I discovered the fire movement that I really kind of had the math in front of me where I finally kind of broke the code on, oh, this is what it means.

SPEAKER_01:

Okay, nice. Great. And then I wanted to get into like, because I I know you do a lot of house hacking with you started with house hacking also. This is a no, I know a question that someone asked me before, so I'm directly definitely asking this question of you. What's one of the biggest misconceptions people have about house hacking, especially today?

SPEAKER_00:

Well, I would say that only, you know, one is that only single people can do it. People with families can't do it. And that it has to cover a hundred percent of your mortgage, or it's not not a legitimate house hack. And let me dispel both those. I have my wife and I have been married since 2011. We just we're having our 14th anniversary today, as a matter of fact. Happy anniversary, my love.

SPEAKER_01:

Happy anniversary.

SPEAKER_00:

Thank you, Tony. And we started we started doing Airbnb when my wife was pregnant with my with our son. And right out of the gate, we had a uh, you know, we had a newborn in our house when we were still figuring out Airbnb. And I I just want to encourage people to like look there. There's a lot of different kinds of house hacks, and it can work for in almost anyone. You can do it from you know, buying a duplex and living in one side and renting out the other. You can do it with uh an ADU that's become a lot more popular now. There's a lot of communities that are allowing people and changing the regulations on auxiliary dwelling units where you can build on your property. And then the second is that it has to cover 100% of your mortgage. We when we were in Las Vegas, our mortgage was low enough that we were covering 100% of our mortgage plus, and we were actually putting money away. We were paying down our mortgage faster at an accelerated rate, which I probably wouldn't do now, given what I know about interest rate arbitrage and all that. But now we and we turn that home into a house hack here in Carolina Beach, North Carolina, where we live. We're across the street from the beach. And we live in a it's a three-story town home, and the bottom floor is a separate apartment that we rent out as a short-term rental, and we live on those top two floors. Now, it does not cover 100% of our mortgage, but it covers 80% of our living expenses, and that includes our mortgage, our taxes, and our insurance, uh, and some of our you know, our utility bills as well. So, you know, so many people I think nowadays are so focused on trimming their expenses around the edges. They, oh, you know, if you stop spending money on eating out, if you stop eating avocado toast, if you stop, you know, getting, you know, lattes from Starbucks, that you know, you'll be in a better financial position. And I think that's that's all good and you should do that, but I think you you really start to make moves when you're able to eliminate two of your biggest expenses that most people have, which is your housing and your car. Now, I don't all my cars are paid off. I don't have I don't do car loans anymore. I've done it in the past. I learned my lesson. I buy I buy for cash. I I prefer to buy used. I haven't bought a new car in a long time. And uh and I have eliminated 80% of my housing through house hacking. Now I'm I'm 90% ahead ahead of most Americans just by that, just because of that.

SPEAKER_01:

Yes, that's true. Yeah, because the biggest, yes, always the biggest expense is where you live, where you rest your head at and drive like automobile prices now, they're outrageous right now. And I I tell people this too, just like what you said, I always buy used cars too. You buy a brand new car with zero miles, you as soon as you drive it off the lot, it depreciates 20% right off right off of it. As soon as you drive it off the lot. So why buy something brand new? And everything I tell everybody, everything you basically can get a warranty for. So why not buy used? It doesn't that structure of I bought something brand new to buying something used is that concept is you might as well just throw that out the window. I said, as long as it's got four wheels and it can take you there and it's dependable, that's all you need basically.

unknown:

Yeah.

SPEAKER_00:

And that's a hard con and it's a hard concept for people. You know, you don't have money, you finally get money at some point in your life, and and you want to have some nice things. Well, what you're doing is you're buying an anchor that is gonna keep you that you're gonna or a ball and chain that you're gonna be carrying around for as long as you're paying as long as you have a payment on that car. And eventually, I mean it's gonna depreciate down to nothing by the time you've got it paid off in most cases. And I think a lot of people just don't make that mental shift, and I think that's a shame.

SPEAKER_01:

No, I'm glad you said mental shift. So how do you go about having that mental shift? Because mental shift definitely, that's more like one of my number one things is the mindset, because a lot of people don't have that mindset to to shift their gear into okay, how do I go about starting out getting financial freedom? Everybody wants, not everybody, but a lot of people do a nine to five. So, how do I get out toward that nine to five into something that okay, I can use this to free up time with my family? Because I tell people that's one thing we can't buy, we can't buy time because time is limited. And then us enjoying ourselves with our family, like that's to me, that's what life's about. Enjoying time with our family, using all the time, not working nine to five and not working tremendously tremendously amounts of overtime. So, mind shift-wise, how would how did you how did your mind shift change from where it was at working until where it is now?

SPEAKER_00:

It was a couple of different ways. One was Dave Ramsey. I read I read Dave Ramsey's book. I think Dave Ramsey is a great starting position for someone who's just trying to get a handle on their finances. His whole whole idea of the baby steps of, you know, uh of one, just living within your means, which is hard. I get it, but like you're never gonna get ahead if you can't live within your means. You know, saving a thousand dollar emergency fund, even if you've got credit card debt, paying down that credit card debt, paying attention to you know the interest rates, any interest rate that's above six percent, pay it off. Like if it's below that, you can, you know, you can figure that out. I I'm not I don't agree with Dave Ramsey that you should not use debt at all, because I'm a real estate investor. But when you're getting started, you really, you know, if you aren't used to using leverage and using debt, just start with Dave Ramsey, man. Just like get your get control of your finances, build an emergency fund. And the second one was uh Robert Kiyosaki, I mean the purple Bible. You know, and and I, you know, God, you know, and it's it's not a how-to book, it's just a mindset, mindset shift book, but it really kind of opens your eyes to all right, what am I what am I really trying to do here? And once I started, once I had my finances under control and I wasn't, I didn't have a bunch of credit card debt, I'd learned how to sort of use leverage, I started tracking my net worth. You know, every month I would sit down, I I would figure out how much my house was worth, what my mortgage was, what kind of debts I had, how much cash I had in the bank, how much, you know, what my money I had invested was worth. And you start to see that net worth grow and you start to understand what it is you're building towards. Now, the the fire movement will talk a lot about investing in low-cost index funds, building up a portfolio, a cash, a nest egg of 25 times whatever you think you need to live on in retirement. So if you think you need to live uh on$100,000 a year in retirement, then you're gonna have to save 25 times that in order to live on that$2.5 million. And the less you can live on, the less you're gonna need for that nest egg. And that was a mindset, mindset shift for me as well, because that was the first time anyone had ever really spelled out the financial freedom math for me.

SPEAKER_01:

That's that's great. And I I'll go back to the being where you were talking about, because I've been in so many debates with people about Dave Ramsey, he is a great starting point. And yes, he he he teaches about paying off all debt. But like when it comes to real estate, even in business, I tell people there's there's a distinction between good debt and bad debt. But both of them, they're two different things. You you want the good debt because that good debt actually opens you up to opportunities thing, opportunities where bad debt doesn't open you to no opportunities. So definitely with uh real estate investing in business-wise, that good debt is always good. So I'll get into a little bit about the go ahead. Go ahead.

SPEAKER_00:

No, I was gonna say, yeah, I mean, I'd just say those two books, you know, Dave Ramsey and and Kiyosaki, Rich Dad, Poor Dad, they're both great starting points. I would say start with Dave Ramsey if you've like if you're still just struggling financially, start with Dave Ramsey. And once you've got control and once you, you know, feel like you're you're no longer just living paycheck to paycheck, then read Kiyosaki's book. But then once you kind of get a taste of Kiyosaki, go beyond that because you really kiyosaki really doesn't get into the nuts and bolts of of how to be a real estate investor, but he just sort of opens your eyes to the possibilities.

SPEAKER_01:

Yes, yes, indeed. And I want to get a little bit into because you got your hands into self-storage. And I know self-storage was definitely huge around like the the pandemic time and everything. So what how did this shift you from most people they wanted to either get apartments or a single-family home? What drew you to the self-storage investment?

SPEAKER_00:

Yeah, I I first learned about self-storage investing at the best ever conference in 2017. Uh, it was the first time I'd I'd really been exposed to commercial real estate and syndications. I was learning about raising capital for multifamily syndications. I was doing a little bit of it at that time. Uh, and I saw a man named Scott Myers get up on stage and he spoke about self-storage and he talked about how it's a great, it's a commercial real estate asset class that is a lot simpler than multifamily. Uh, there's no tenants, no trash, and no toilets. It's you're really really just renting people a box of air on a month-to-month basis. You don't have 12-month leases. And on top of that, your expense ratio tends to be a lot lower than multifamily. You know, whereas multifamily, you're typically going to have 50% of your gross income is going to be taken up by expenses, not including your debt service. Self-storage, a lot of times, is lower. It's more like 35%, and sometimes even lower if you've had a facility for a long time and you're operating it efficiently. So it just clicked for me. It was a very simple business model, but it was still commercial real estate. And I love commercial real estate because of how how predictable it is versus residential real estate. And that was really what sort of opened my eyes to it. Uh, and then I literally at that same conference, I met my now business partner at a lunch buffet table. And he was he was a self-storage owner operator then. We clicked, started hanging out. I started coming out to visit him. He was based here in Wilmington, North Carolina, and we stayed in touch for years trying to find a way to partner, partner up on something, and had a lot of false starts, but that finally came together in late 2021.

SPEAKER_01:

That's great. Uh, the reason why I wanted to deal with talk about the self-storage is I I told people, especially with that in that commercial side, you don't you don't deal with tenants, you don't have to deal with plumbing, no toilet. They said everything's basically the when those self-storage they're they're literally structured almost fireproof. Because they have everything's basically metal. You don't have to deal with that. And like you said, it's not a it's not you don't have a year lease on it, it's month to month. So I think self-storage is one of those, it used to be one of those hidden gyms, but now a lot of people, especially in my area here in California, they're just if anything comes available store still self-storage-wise, they're on top of it because it is a great asset. And the the the overhead cost, it doesn't cost that much because you're you're just gonna be generating so much from it. Because right now I know a lot of people or need self-storage. And I've actually talked to one, because I even have I even have a self-storage. And the people that I that I've I've been with, like they're always full. They're always full. And I know that it's clean, it's a very uh they have cameras, security, everything is taken care of where you don't really have to worry about anything. So it's it's just a win-win with the with the people who who rent it out and the ownership. Yeah, so go ahead. Sorry. No, no, go ahead. I I got I want to listen to you do more of your wisdom.

SPEAKER_00:

Yeah. So uh storage, storage is a maturing asset class, is how I would describe it. A lot of people picture the old self-storage facilities, all drive up, not climate controlled, a lot of times off in the sort of industrial area of town, not particularly clean. But now a lot of people you're starting to see those much more, you know, I call them storage palaces, you know, the extra space, three, three, four stories, climate-controlled, you know, really clean office space, you know, waiting rooms, uh, and a lot more technology involved in it. You're sometimes some of them are getting, you know, Wi-Fi locks, you don't even have your own locks and things like that. So it's really a maturing asset class. And a lot of the institutional players have discovered it. And it's one of the things that's you know going on right now is that there's billions of dollars in institutional capital coming together to buy self-storage or build self-storage. And you know, construction on self-storage has has slowed a lot over the last three years, primarily because of the interest rate environment, the cost of construction, things like that. But but the capital is still there and it's still coming together to buy it. So we really, you know, we we don't buy self-storage, we build it. We take old vacant big box retail stores, old warehouses, uh, you know, bottling facilities, things like that, and we convert them to climate-controlled self-storage. So we're really we're continuing to build because we're seeing an environment where there's going to be a drop in new supply coming online, but there's still all these interest institutional players that are looking to buy it.

SPEAKER_01:

That's that's great. And that's I'm glad you said that. Yeah, because the old self-storage is actually changed. Yes, I've seen a lot of them with climate control of the the electric locks, like uh it's it's changed tremendously right now. And I know a lot of them too, they're having more space for people who have bigger boats, bigger mobile homes. They they have those areas for them to park if they don't want to park at their house. Okay, so you've raised over$17 million in investor equity. What's your formula for earning trust and confidence from for investors?

SPEAKER_00:

Yeah, so it all starts, you know, we often talk about you need in order to get someone to invest with you, you need them to know you, to like you, and to trust you. And oftentimes that's going to start with your friends, your closest friends and family. Those are the people who know you, like you, and trust you. And that was a lot of our early investors were friends of the friends and family of mine, friends and families and colleagues of my capital raising partner, Clint Harris. A lot of people from the white coat professional community. He was a medical device salesman, so he had a lot of friends and family who were white coat professionals. A lot of our early investors were those people. Well, eventually, you're gonna run out of that. And you need to sort of go beyond that. You need to, you know, get out there and get people to not only know you, but now they have to get to like you. And that's why, you know, we go out and I do podcasts. I have I have my own podcast. We've got truly passive income. We're not usually on there pitching things, it's only an educational platform, but it's also a chance for people to get to know us and hear us speak. Oftentimes when I'm talking to investors, they will mention that, oh yeah, I've heard you, I've heard you on your podcast a bunch of times. And so we're already starting from a we're not starting from scratch. And then finally, you need to get them to trust you. And that's uh and that really just comes down to saying what you're gonna do and doing it. You know, we're you know, we're operating, we're we're fairly new syndication. We've been doing self-storage for almost 20 years, but we're kind of new to syndication. We syndicated our first deal in 2021. We've only exited one of those deals, did pretty well, and so that's sort of where a lot of the trust comes from. But what you what it looks like is uh like a bunch of circles. You've got the people who know you, and the your conversion rate's gonna be very high with those people. I think early on when we came to people and said, hey, you want to invest in this? We're converting a Kmart to a self-storage facility. Who wants to invest? And probably 50% of the people we talked to wanted to invest, and then you got it into another layer, and maybe it's the people who know them. They don't know you directly, but they know the people who know you. And well, now your conversion rate goes down to maybe 20%. And then you get a little further from that and you start getting to people who don't know you, where you're advertising on meta, and now your your conversion rate really starts to drop. And now you start getting into a numbers game, and just you know, you're essentially having to do paid marketing and and having to just not cold calls, but warm calls with people who have seen your ads, they've maybe heard you on a podcast, and you start a conversation with them. And normally what I will do, I very rarely will come at someone trying to pitch them about what we're trying to do. I will first try and understand what that person is, what that investor is looking for. Because if we have somebody who comes at us and they're looking for immediate cash flow or they want to do a 1031 exchange, we're not a good fit for that. We're doing essentially development deals. It takes us almost about a year to build out our facility. It takes another 24 months or longer to lease it up to stabilization where we can start paying distributions. And so we always tell people listen, if that's what you're looking for, we can point you in the direction of some other operators that are that we believe in, they're doing some great stuff, but we're not for you. And that usually you'd be surprised how much trust that builds when you tell somebody, hey, listen, I'd love to take your money, but we're not a good fit for you.

SPEAKER_01:

Great. I like that because my my last podcast, I was talking to a gent a gentleman about this too, and it's about the trust, the trust that you you develop with each one another, uh, trustworthy and doing what you say you're going to do. That is huge. Like it's kind of like you, you know, you practice what you preach. You you have to do that, and that's how you gain trust. And then just like the platform with I have and platform you have, that's gaining trust because you're good out there, you're giving information that the average person doesn't know about it, but it helps them out to gain where they need to go to gain financial freedom. And then I wanted to ask with the with newcomers, because I deal with a lot of newcomers who want to get in real estate investing. What are the keys to you know the do's and don'ts when especially approaching potential partners? Because I know some that I've talked to, they're like, well, I don't know who to go to. I want to do a I would I might do a syndication deal, but I don't know anything about a syndication deal. They've heard of it, but they don't know how to go about it. They don't know the red flags or maybe like what the numbers, if the numbers, or as I could say, the numbers are not mathing up. Yeah.

SPEAKER_00:

So in order to be successful in real estate, I think you need three things. You need a combination of one or all of these things: time, experience, and money. And most people don't have all three. They they may have time, but they don't have experience or money. They may have experience, but they've got no time and money. Or they may have money, but they've got no time. And without the time, they can't get the experience. And that's really where syndication comes in, when you've got people who've got the money, but they don't have the time and they don't have the experience. And what you so then what you're doing is you're leveraging someone else's time and experience. We don't, I don't do self storage as a hobby. Not I I'm in a building right now with roughly 16 people who are doing this full time. That's this is all we do. And there's a lot of experience and a lot of bumps and bruises that can came along with that. And so the best advice I have for people who are maybe getting into syndication for the first time, as a as an LP, I could go into you know, somebody who wants to get on the jet get on the GP side, but right now I'm talking about getting as an LP is don't focus on the deal. So many people come in and they're they're shopping IRR, internal rate of return. They're shopping the returns. Oh, hey, look on this multifamily deal, I can get a 16% return. Oh, but on this, on this retail deal, I can get 21%. Oh, but on this industrial, light industrial, I can get 25%. Don't do that. Find an operator who has experience and a track record and has been doing what they say they're gonna do for a number of years. Like I don't I don't recommend that you sign up with an operator who's just trying out a new asset class. I don't recommend that you get in with an operator who's never done that asset class without their own money. And I recommend lastly, I recommend that if you get to a point where you're gonna put some money in with somebody, do a background check. Talk to some of their previous investors. And yeah, I mean, that's that that would be where I would start.

SPEAKER_01:

I'm glad you said that because you yeah, you want to know their track record, you want to know how many syndications, how many transactions have they been dealt with, because that's gonna that speaks volumes in itself, because someone can just say, Yeah, I I've done this and I've done that, like where's the proof? You need the proof to know how to go about, hey, should I be with this person or should I not? Because you're putting you're putting your capital up. So you're not trying to lose your capital, you're trying to gain that capital up. That's what you're trying to do to go about furthering your your income with uh real estate investing. So, so Neil, how can the audience connect with you with you know, because I know you're with the Nomad Capital and you you have the the podcast of the truly possessive income podcast. How do people get in touch with you?

SPEAKER_00:

Yeah, well, check out our podcast, Truly Passive Income. It would it'll be wherever, wherever you listen to podcasts. If you search for it, it comes right up. But the easiest way to get in touch with me is just shoot me an email. I'm Neil N-E-I-L. I don't I don't spell it the sociopath way at nomadcapital.us.

SPEAKER_01:

Okay, great. I'll put that all in the show notes and everything, and I will be subscribing to your podcast and listening to it also. Appreciate every everybody out there, thank you for watching and listening to the professional real estate investing podcast. Like, subscribe, put any comments you need to on there because I'm just trying to better uh people's education when it comes to real estate investing. And thank you, Neil, so much for the the opportunity to interview you and may you have a blessed day.

SPEAKER_00:

Thanks, you too, Tony. I appreciate it. Thank you.