Trading Time for Wealth: How Clint Harris Found Financial Freedom

Can self-storage really be the key to financial freedom? Clint Harris thinks so.

Scott Meyers sits down with Clint, a former medical sales professional who escaped the grind by turning abandoned big-box stores into thriving storage facilities.

Clint shares his journey, his strategy for creating wealth, and why self-storage is one of the best opportunities in today’s market.

After years of trading time for money in real estate—flipping houses, managing Airbnbs, and dealing with endless headaches—Clint discovered the power of adaptive reuse.

Now, as a general partner at Nomad Capital, he’s built a scalable, recession-resistant business by converting underutilized retail spaces into high-value storage properties. 

WHAT TO LISTEN FOR

03:34 – The Wake-Up Call: Trading Time for Money

09:49 – The Turning Point: Why Self-Storage?

25:35 – The Secret to Hitting 500M in Assets

31:57 – Why Now is the Time to Buy Self-Storage

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Chapters

• 0:00 Why Now is the Time to Buy Self-Storage
• 3:34 TO LISTEN FOR 03:34 – The Wake-Up Call: Trading Time for Money
• 9:49 The Turning Point: Why Self-Storage?
• 25:35 The Secret to Hitting 500M in Assets

Transcript

Announcer (00:03):

This is the Self Storage Podcast with the original storage expert, Scott Meyers.

Scott Meyers (00:11):

Hello everyone and welcome back to the Self Storage Podcast. I'm your host, Scott Meyers, and on today's episode we have Clint Harris with Nomad Capital. Clint shares a very similar background to mine getting involved in, well, first of all, working in corporate America, myself in tech, but he and what he claims or what he calls is the white coat area of expertise, and that is in medical sales and in the medical field. And then now recognizing that there's a lot of money to be made in real estate. And so he began investing in single family houses, multifamily, and then ultimately found himself in self storage by way of conversions, and then built a property management company along the way as well as working with a construction company that is an in-house, which is where you gain most control. And that is the idea. That's what Clint was looking for, is control over his future. So with that, Clint, welcome to the podcast.

Clint Harris (01:02):

Thanks, Scott. I'm excited to be here, man. Excited to top talk shop with you. I think we got a lot of the same things going on, so I'm looking forward to learning and hopefully sharing something that can help others.

Scott Meyers (01:10):

Yeah, well, but seeing your name out there, seeing you on that podcast as well, obviously this isn't your first rodeo, but your story is a little bit unique, but I would also say it's a cookie cutter successful story on how people should get into self storage by starting walking before you run, looking at other folks that have created success and coming alongside of them, but then also, not that everybody has to pay their dues on the residential side and the multifamily before they find self-storage, but at least us starting small. So give us a little bit of your background and your journey and how you got into self-storage ultimately.

Clint Harris (01:47):

Yeah, sure. And it's funny, I felt like it was a unique story, but you and I are in a position where as we have conversations like this and we hear people's story, it really is a lot of times just the same kind of pathway over and over and over. It's amazing how many similarities there are. My version of that is that I had a 16 year career medical sales, implanting pacemakers and defibrillators. So I came out of college, did a year of medical training. I'm not a doctor, but I was the representative for the company. I would go into surgery and help those physicians, cardiologists put those devices in, and then that was my patient for the rest of their life. And I had a combination of surgery days, clinic days, sometimes in between, but it also came with being on call. As you can imagine, heart problems are not Monday through Friday, nine to five. So I was on call a week at a time, getting called two or three times during the week up to one to three hours away in different directions, still working during the day.

(02:40):

It's kind of a young man's game. Medical sales, specifically surgical sales and being on call can really wear you down and it's got a fairly high ceiling, but you're working really hard for it and you're trading a lot of time for money. I came to the realization that there's really not a great off ramp from that lifestyle anymore. People used to be able to make an unbelievable amount of money and ride off into the sunset. The reality is I believe that for most people across my generation, I'm 42, is that our parents and grandparents could save their way to retirement with the pensions, the 401k, the social security. I believe that's been taken away from most people my age these days. And so I started looking at how can I eventually build an off ramp from this lifestyle? I love what I'm doing, I was blessed to be good at it, but if I don't want to be doing this when I'm 55 or 60, what does that look like?

(03:34):

Am

(03:34):

I going to save enough to get there? Maybe, but I probably need to be aggressive. So I think I was 24, 25. I bought my first house was a duplex, and I thought I invented this concept of living in one half and renting out the other half and living for free. I was a genius and everything was going to be happily ever after. This is in the post 2008 crash. So from 2010 to 2013, my wife, now girlfriend at the time we bought nine single family homes and some of it we did right, most of it we did wrong. We accidentally burned a couple of them, which is great to get your capital back, but you're cannibalizing your cash flow. And eventually we just determined we flipped a few houses in the process as well, which is fine, but we did that typical going to make 30 grand and then you subtract all the holding costs and everything else and we made eight, and then the next one you're supposed to make 50 and you made 18. And then finally we got one right and made a decent chunk on one. But all of those things just taught me single family is a really slow way to get ahead

(04:36):

And if I'm flipping or wholesaling or anything else, you get paid one time, you're trading time for money and the day you stop working is the day you stop getting paid. So fast forward, I advanced through my medical sales career and I took a promotion in 2017, my wife and I moved to Wilmington, North Carolina, which is where we live now. Started a medical sales territory there and Wilmington is a beach town and that opened up an opportunity we didn't have before, which is looking into short-term rentals and exploring those options. So I remembered that first lesson from the first house. We slowly started liquidating those single family properties buying small multifamily properties on an island just off of Wilmington called Carolina Beach. First property was a duplex, it was two blocks off the beach we renovated, we lived in one half, which is a three bed, two bath, started doing Airbnb with the other, had a lot of success, did almost 60 grand our first summer, so paid for the property, utilities, mortgage taxes, and we were getting paid an average of around 1400 bucks a month to live in.

(05:38):

Nice. We were like, oh, this is real money. This is legit. So leaned heavily in that direction. We bought a quadplex, converted them to Airbnb, all four units. Then we bought another Quadplex, then another Quadplex, then we built house for ourselves. We turned both units to that duplex into an Airbnb. Fast forward, and at this point in time, I've replaced my income that I was making in medical sales, but for the second time I realized I'd done it all wrong. I had been so focused on that cashflow and the financial independence, it's the marketing buzzword that at the end of the day I was like, okay, I've replaced my income. I was still in medical sales, but even when I wasn't on call with the hospital, I was basically on call, right? I got my phone on me, I can't leave town for a month or two at a time. I'm location dependent, especially in the summer in this area, and I've got to have my phone on me. I was like, this is the opposite of what I was going

(06:35):

Through.

(06:36):

And that was the realization that I had was that I'd been doing it wrong, that my focus should not have just been on the financial independence. It needs to be on a combination of time, financial and location independence,

(06:50):

Because

(06:51):

Those things together create that freedom of purpose that gives you the independence of lifestyle to be like, it's going to look different for everybody, but what does that mean? Can I go to Costa Rica for two months with my two young boys and go fishing or is it charity or building or skiing or fishing or hiking or whatever it may be? Hopefully it's a positive impact on my family and the people around me, but I want the freedom to choose that, and that's what started a two year process of building out a property management company. I couldn't find one to manage my properties the way I wanted it done. So we built a management company from the ground up with some incredible partners, and during that timeframe, I was heavily educating myself on what's the next chapter for us in terms of the asset class we can focus on that's going to give us that combination of financial time and location independence. And that's eventually what led us into storage.

Scott Meyers (07:49):

So you're right, very, very similar story to many that get in this into the habitation of real estate business to realize that, okay, financial independence is his number, and once you've gone over that crest of replacing your active with your passive income, it doesn't mean that the hours are the same because there is still work involved in it and it is not mailbox money. The gurus will tell you and that when you're on, you're on, which is all the time. And even if you have grow to a scale that you have property managers or property management companies, when the real big things happen, which are many of those items that the management companies can't handle, it still lands on your desk and you still have to write out the check. And so it isn't all that it's cracked up to be. And so yeah, the impasse that I came to was pretty much the same.

(08:33):

I thought, okay, economies of scale will fix this lack of free time and then the ability with the additional revenue, if we grow this to have more management companies and managers in place to handle this, only to recognize that after we continued to reach another level and another level, all it did was just multiply and compound the problems. And so for the reasons we love real estate, all appreciation and depreciation, the things that we don't like are the tenants, the toilets and the trash. And so when you look around the landscape, there's a handful of things which eventually lead you to self-storage, but where did you turn at that point? Did you immediately say, Hey, I'm going to go do self storage, or do you think about winding things down or buying a coffee shop or what did it look like at that fork in the road?

Clint Harris (09:16):

Listen, you get so burned out on one, you think about long-term properties. Think about a short term. You have eight to 10 tenants every month

Clint Harris (09:23):

In

Clint Harris (09:23):

Each listing, so you get burned out on people pretty quickly. Even with the sales, the systems automation, everything else along with it, it's a lot, right? So I was in that process of getting burned out on tenants and started my aggressive pursuit of more passive investment strategies.

Clint Harris (09:42):

And

Clint Harris (09:42):

That started a journey of finding and identifying people that were smarter and better and than I am and asking them

Clint Harris (09:49):

And

Clint Harris (09:49):

Was I found a collective of investors or older successful investors that had been doing it for a long time that looked like they had the life that I wanted to live. And when I asked those people, it kept boiling down to three things and it was hard money lending. I didn't have the seven figures to get started there. It was mobile home parks, and I was already burned out on tenants and it was self storage.

Clint Harris (10:14):

And

Clint Harris (10:15):

That's when it was like, let me get this right. You're renting somebody a box of air, there's no kitchens, there's no bathrooms, there's no tenants I'm in. And that's what started me leaning in that direction.

Scott Meyers (10:25):

Yeah. And you, Clint, something you mentioned I found myself, and it sounds like you did as well. I came to the place where unfortunately I was kind of losing my love and respect for my fellow man after my fellow man had done me wrong so many times. And I found that I just business wasn't good because I didn't really like, I was beginning to not like people. And I think anytime you're in a business or in any situation in which you're losing your love for your fellow human beings, it's time to do something different. It sounds like maybe you got to that place as well.

Clint Harris (10:58):

Completely. Yeah, I couldn't agree more. I am a huge extrovert. I believe in people and the power of relationships, the reason I have the partners that I have and the success that I have is because the people that I surround myself with, and I know that who I am now is the same as who I was 10 years ago or who I'm going to be with the exception of it's what we all know, the places you go, the people you meet, the relationships you build, the content you consume. And if you get to the point where you're just burned out on all of that, that's kind of that point where it's like, alright, I've got to stop and do something differently. And it's kind of a sad place to be because you spend so much time and effort into building up

Clint Harris (11:33):

A

Clint Harris (11:33):

Vision of something you have in your head. It's really sad to get to the point where you're like, well, I've only got two options here. I can tear all this down, which for me would've been the second time tearing down a portfolio or I can take a haircut and give up some of this revenue, but build out a company that is going to be able to run this

Clint Harris (11:52):

When

Clint Harris (11:52):

I'm there and have operating partners that can take control of this for me. But then I'm still basically back to square one if I'm going to do this, if I'm going to have a second act here and we're going to build on the portfolio, how do I do it in a meaningful way that changes the amount of time that I get to spend with my kids that hopefully turns them into men of character and reflects on the amount of time that they think it's normal to spend with their kids? How do I have a lasting impact on things that are more important than just money?

Clint Harris (12:21):

And

Clint Harris (12:21):

To me, it has to have a focus of yes, the money has to be there, but it has to come with that time and location independence as well.

Scott Meyers (12:28):

Yeah. Well you know what? You did it the right way because another thing I want to key in on what you just said here is that so many people when they come to that impasse and they look at self-storage or whatever it is that they're going to go into and they recognize that, Hey, this seems like fewer moving parts. This looks like a direction we want to move in. But what you said was, I need to find some key operating partners, some key partners that are good at operations so that I can extricate myself. And I think too many people stay in the hunter mode and they're in the transaction based mode and they will go out and create a project like a conversion, an empty big box in sell storage or buying an existing facility, but then they pay no attention after closing to the operation side. They'll leave the same person in it that drove it into the ground that the previous owner had, or they'll hire their hairdresser because she's a nice gal and I can get her for less expensively than anybody else out there, but that is such a key piece. So let's dive into that a little bit more. Tell me about your partners and why you chose them.

Clint Harris (13:26):

Lemme start with the lesson I learned that made me realize the value of my partners as soon as they came into my life. I started out being, again, having too much faith in people around me and hiring people that I liked without looking at their ability. And I started out building our property management company, being quick to hire and slow to fire, and that matters when you're building out six cleaning teams with 16 or 18 different cleaners and a lot of moving parts, and I had to learn fairly quickly to be slow to hire and quick to fire, and it's not personal, but my name is on it. There's a reputation here and I'm giving people my word, and that's something that you have to be very tactful about that, and unfortunately, I think that lesson just comes from getting burned, right? It's a once bit and twice shy kind of thing, so we all know, or hopefully you know that in my experience, you have to have three things to have success with any type of real estate investing. It's time, it's experience and money. It rarely does one person have all of those things. If they have money and they have time, they probably don't have the experience and they're going to take some hard lessons just like I did to hopefully get that experience over a period of time.

(14:33):

So I met my partners again. I had gotten to the point in my life where I was willing to listen to wisdom from people that are a lot smarter than I was, and that's what I identified storage as something that seemed like a fit for the life that I was trying to create for my

Clint Harris (14:46):

Family.

Clint Harris (14:48):

Remember the background that I come from is asset conversion. I'm buying quadplexes with bad long-term tenants that haven't had a rent increase in 10 or 15 years. These are derelict properties, but they're in a great location. I'm moving the people out. This is 2018, 2019, converting the properties to Airbnb, staging 'em, getting 'em up and running, and it drastically increases the value of the property because the net operating income shoots up, which creates opportunity for recapitalization by refinance and things like

Clint Harris (15:18):

That.

Clint Harris (15:19):

And then Covid happened, which was a roller coaster. There were some ups and downs. The end result is we ended up doing really well throughout the process. After a couple squishy months when things first started, I met my partners at a local real estate meetup. Again, just knowing that everybody knows something that I don't, I met my partners there and quickly connected with 'em just because they were doing some hotels and small multifamily properties on the same island where I was.

(15:45):

So we ran into each other for a period of probably a year. I watched the renovations that they were doing, they were builders. They did an unbelievable job. They ran into some challenges and I own a property management company and that was kind of my wheelhouse. I was still doing it on the side, but I was very good at it. I'm very data-driven and analytical, and so there was opportunity for me to help them with one of the projects they were working on and they asked if they could hire me as a consultant and I said, no. I said, but here's the deal. By then we've known each other almost two years, and I know these to be strong, moral, ethical people that are doing everything the right way with a great family, and they have a long background in storage going back to 2006, and they asked me to help with something and I said, I'll do it. I'm going to bring my team in or consultant and help any way that we can. Here's what I'd like. I know that you're going to get back into storage. You've expressed interest in doing some larger conversions and taking it to a big scale. When you do, I'd like for you to invite me in. I'd like to invest in it, and frankly, I'd like to be invited in to help raise capital. I come from a background surrounded by medical professionals that are constantly looking for investments

(16:53):

And they're tired of trading their time for money at the

Clint Harris (16:55):

Hospital.

Clint Harris (16:57):

And so they did. It was probably eight or 10 months after that they called and said, Hey, we've got a Kmart. We're going to take this project down. We need to raise some capital for it. And you see how much you can raise, we'll see how much we can raise and we'll go from there. And we had, it wasn't an offer memorandum that wasn't much better than construction paper and glitter and stapled together and some crayons on the front, but somehow we raised the money that we needed to take down that Kmart. We bought a Kmart building for 1.5 million. It's 87,000 square feet. We put 2.5 into it, we're into the project for four, stabilized valuation is about 9 million.

Clint Harris (17:33):

And

Clint Harris (17:33):

I was like, oh, this is real, right? It's the same. I knew what I was doing with that first conversion that I did, but it's not until you get that appraisal or that you see the income that it really slaps you in the face. And that was very validating for me and I had a lot of risk there. Our investors were most of the doctors and physicians that I worked with that were my buddies. So that project went very well. So then we did another

Clint Harris (18:00):

And we

Clint Harris (18:01):

Did another, then we did a couple more, and then I left medical sales in November of 2022. General partner with Nomad Capital. We do syndication full-time. We're sitting on 150 million in assets under management, just wrapping up a 10 million fund on a small portfolio, which I know you're wrapping up a fund right now as well. Correct. Similar journey. And that's our model. We buy big box retail buildings like Kmart, grocery stores, warehouses, textile mills. We buy them for pennies on the dollar compared to the replacement cost. My partners are the GCs.

Clint Harris (18:35):

We

Clint Harris (18:35):

Build them out ourselves, convert them to climate controlled storage. We have management in-house under the brand name of city storage, and then once we stabilize them, we do a cash out refinance to recapitalize the investors and ourselves, which is non-taxable because it's a refi. From there, we keep the asset and they continue to cashflow long term and beyond that first initial payout that turns into an infinite return. The key for me, because remember the most important thing in my life is breaking the cycle of trading time for money.

Clint Harris (19:08):

And

Clint Harris (19:09):

That's when you can recapitalize without having to liquidate the asset. If I am a house flipper, a real estate agent or a wholesale or anything else, and I'm doing these projects and I build them up and I establish the value and then I have to sell that to get a payday,

Clint Harris (19:23):

That's

Clint Harris (19:23):

Great. I'm not knocking anybody's style or anybody's strategy and the big multifamily apartment guys are crushing it doing that. But at the end of the day, when they stop working, it's the day that they stop getting paid. Our goal is we're on a journey to try to get to 500 million in assets under management over the next five years and a billion in 10. The pathway that we chose to do that is storage because it's extremely easy to manage. It's extremely inflation resistant. We can do it for half the cost of ground up development and we don't have to liquidate the assets. They can continue to cash flow and change the trajectory of what our lives with our kids look like.

Scott Meyers (20:02):

There are many folks out there that have that very same business model, and many of us that are doing conversions are doing the exact same thing with regards to creating the value. And then there's an exit. But to your exit is, I'd say it's in the minority, maybe 20 to maybe 25% of the folks are able to get the returns, in other words what we call it around here, get a big enough pot of money at the end of a refi that is distributed to the limited partners in order for them to get an attractive return compared to the market. So depending upon where we're at, and depending in the market or when you're listening to this podcast, typically conversion projects and development projects a little riskier. And so for the past several years, they've usually had a two in front of them. So a 20, 21%, 24% IRR over three, four years.

(20:50):

But that's a challenge to get those returns when you're refinancing at a 75 or 80% LTV loan because essentially you still got 25% of your value tied up into the project. So I'm curious if you're willing to share, are your IRRs, have your IRRs been a little bit lower or are you creating such good deals and doing it so quickly that the IR is a compressed timeframe or are you raising capital in a debt structure in which folks are not at risk as much in first position? Are they coming into a debt position? So if you would share a little bit about the business model.

Clint Harris (21:27):

This is a great question. As I answer this, I think I probably could have done a better job of answering your previous question. I think these answers are frankly tied together a little bit. The reason that conversions work for us, I don't want to gloss over the risk that's involved here. The importance of good partners, good mentors, good data, the analytics of everything that you're doing, the road to self storage conversion project success is literally littered with the bones of people that thought they could pull it off, and I would've been one of those two if I had tried to do it on my own. The reality is I have great partners who have a background in storage who are the GCs, and we have top to bottom full vertical integration. And the reason our projects work for us is because I've got an acquisition team in this building where I'm sitting right now that's looking at 50 to 70 properties a week to get down to one to three per month that we're sending a letter of intent on to refining the properties ourselves, mostly off market deals. We're raising the capital in-house and then we are the GCs and we build out our properties at cost plus 12%.

(22:35):

After that, we do the asset and property management in-house under the brand name of city storage for combined 5%, 3% property management, 2% asset management. Every part of this is about landing at the lowest LTV with a stabilized project as we can.

Clint Harris (22:52):

If

Clint Harris (22:53):

An investor is buying a market, if you're paying retail cost for a building,

Clint Harris (22:58):

You're

Clint Harris (22:58):

Paying retail costs for the third party construction and you're paying retail costs for the third party management, you're likely to get eaten alive with the carrying costs before you even get to an open

Scott Meyers (23:09):

Facility. It's tough. It's not for faint

Clint Harris (23:10):

Time. You have one change order on a commercial project on something like a hundred thousand square foot Kmart.

Clint Harris (23:16):

It

Clint Harris (23:16):

Can throw off the project by months, and you have usually we negotiate at least two years, sometimes three of interest only payments, but this is thousands and thousands of dollars a month going out the door. And if you have a project that balloons from your average contractor, it's going to be at 18 to 24 month project.

Clint Harris (23:36):

Our

Clint Harris (23:36):

Typical conversion is in the eight to 12 months because this is all we do, this is what we focus on. You have something simple like the ports closed down recently from a

Clint Harris (23:47):

Strike. The

Clint Harris (23:48):

Next day I talked to our project manager and he's like, listen, I've talked to our door and panel supplier. They have everything we need for the next three projects. I talked to their metal supplier, they have enough metal in the country right now for the next five projects. After that, we've also identified another metal supplier who comes in through the west coast port, which is not closed down and it hasn't happened yet, but we probably need to factor in a 15% increase in material cost that's going to roll down to us if things don't open up soon. And all of those calls were made before I even got in the next day because this is what we do. This is all we focus on, and by the time that we had a solution to the problem, the strike was over and it wasn't a problem. But that's my point is if you're getting a building from a broker, you're hiring a contractor who's going to build this in a list of other projects he's working on,

Clint Harris (24:37):

And

Clint Harris (24:37):

Then you hire a third party property manager, you're carrying costs are going to eat you alive and no one cares about your business the way that you care about your business, the same reason I had to start my own property management company, you're just not going to get that from other people. So I don't want to gloss over it and make it sound like it's really, really simple because we don't want to get rich off the construction or the management or the acquisition fees or anything else. Our entire goal is to land at a low enough loan to value that there is room to recapitalize by way of a refinance, and then we can keep the property always into fixed rate debt. We have never used variable rate debt, and our goal is we want to be able to do a cash out refinance at a 60% LTV fixed rate, and the only way you do that, you got to buy it really well, which typically means off market. We do the construction at cost plus 12% and we do it very fast so that those carrying costs aren't eating us alive.

Clint Harris (25:35):

And

Clint Harris (25:36):

Then as soon as we stabilize, then we're looking to do the cash out, refinance, pay the investors and roll on that way. Our IRR is 19 to 22%. Some of our previous projects were better than that. Like you've mentioned, sometimes they come with risk.

Clint Harris (25:52):

With

Clint Harris (25:52):

The current fund offering that we have, we have four properties in there, so different assets, different geography, different operators and different local market drivers. So it creates some stability there. We really like that some of the previous individual properties had higher returns, but they all said higher risk because all your eggs are in one basket. So those are typically the ones where just like anything, and you made a comment earlier, any property, no matter the asset class is going to be as good as the person operating it. The operations on the backend is probably the most important thing for the long tail of the property if you're trying to achieve a valuation and recapitalized by a refinance.

Clint Harris (26:35):

So

Clint Harris (26:35):

You got to get there, but obviously you can't do any of that unless you get the order of operations and you buy it, right? And you raise the capital, you do the construction, you do the management. At the end of the day, in the long run, the truth always comes out and a property is only good as the people that are continuing to operate it.

Scott Meyers (26:53):

Well, Clint, this is the place where I don't want to assume that everybody on the call wants to get to, but it truly is because you're either in a transaction based business where you're buying, creating value and selling because you've got notes coming due or investors that need to be paid or you're creating value in five years and then selling and then having to do it over again. And no, it's not the same as killing what you eat and dragging it back to the cave over and over again. Like the early days, what we were doing when we were in single family houses, but as you mentioned, you would like to get to 500 million and then a goal of getting to a billion. And that doesn't happen if you're selling off a portfolio or a property every five years. You just don't get there. You can create a lot of wealth with that strategy, but ultimately you've done all the heavy lifting.

(27:34):

It is risky enough and there's a lot of hard work in taking on a project like this and then taking on the credit risk, the lease up risk, the construction risk. But when you are vertically integrated and you have that control and doing it just exactly the way that you had mentioned, which everything is a path through because everybody recognizes the value of getting fees for what is due to us and what keeps the lights on, but the delayed gratification of knowing that when we refinance this, we've got that cashflow and now all we need to do is build upon that and that is a great place to be in. And at those IRRs that rivals what most folks are having to do in order to get that amount of money back to their investors by way of selling and not keeping the property as well.

(28:17):

And so when you add all those other folks in, as you mentioned, the brokers that are looking for to get paid to commission, and don't get me wrong, we love our brokers and especially those that are listening, but when you have a third party property management company that also is looking at getting fees, whereas you're not, you're just looking to pay everybody and have it be a pass through. And then the same for every facet along the way from this construction company, which gets a very fair construction fee. However, when everybody is involved in the backend, we call it around here, when everybody is a third party getting paid, the challenge comes into play because there are 10 people that want a piece of pie and there's only eight pieces of pie, and so somebody's going to pay more or somebody's going to not get a piece of the pie, and that's when things begin to get a little bit challenging.

(29:06):

And so when you can control those costs, any and all three of those, then you, you're in good shape. So kudos to you. There's a lot of folks that like to see another example because there aren't a lot of those out there like yourself, Clint, to see that are doing just exactly what they want to do to see that they're now able to do it today in 2025 because many folks think that those days are over or those were the glory days and there aren't those opportunities out there, but there are. So that being said, you shared some of the numbers in terms of what you're looking to do in a year's time. What does 2025 look like for you? So maybe in two or three minutes, what does Clint's crystal ball look like or have in store for us for 2025?

Clint Harris (29:50):

Man, there's a lot of different directions to go there. So one thing we're excited about is that in terms of self storage, I kind of feel like we're in the doldrums the last 18, 24 months. Things are just, everything is below historical data in terms of lease up, occupancy, everything else existing facilities are doing well that have been full for a long time, but lease up and we have a lot of new facilities is a lot lower than what we're used to. That's because it's tied to the housing market. We thought we were safe because we have no variable rate debt. It's always fixed rate if we use debt. But the reality is the variable rate debt or the interest rates shooting up higher and faster than they ever have still had a drastic impact on the housing market. The housing market demand drivers for storage are death, divorce, downsizing and displacement. Obviously death and divorce are still happening, but what we've had is the housing market is effectively frozen. And so we're having a lot of stagnation across storage. Now the great news that we're seeing is that in the last quarter we had more home formation in all of 2023. It's changing. There's a new presidential administration, there seems to be a lot of activity. I know of eight new funds that have been formed since November when the election happened that have been put together specifically for self storage acquisitions. Those funds range from $50 million to $800 million. The interesting thing is that development for a lot of new storage has really slowed down.

Clint Harris (31:12):

So

Clint Harris (31:13):

My anticipation is that we know there's going to be demand, but there's a lot of money being put together for the acquisition of storage and there's going to be probably a two year gap with very little new development coming on board that wasn't already planned. So my expectation is that we are going to at some point end up in a high demand low supply

Clint Harris (31:35):

Situation,

Clint Harris (31:36):

Which doesn't help you that much in terms of a refinance. It's going to help you a little bit, but it does create the opportunity for us to trim the portfolio and pick off a few properties here and there. We have have a few mentors that we've worked with from the beginning that are recommending like, look, your capital raising efforts are going to be a lot easier if you do go full

Scott Meyers (31:57):

Cycle

Clint Harris (31:57):

On a

Scott Meyers (31:57):

Few properties. Yes, exactly.

Clint Harris (31:59):

We have a few that from the beginning are earmarked for sale. And our anticipation is that if we wait a little bit and we just sit tight, we're going to be in a high demand low supply environment and those cap rates are going to compress. So I think that that's a springboard keeping in mind that the long-term goal is a billion in assets in over a 10 year period that we can trim that portfolio if it's going to supercharge the capital raising efforts, which is obviously one of the toughest things right now. So

Clint Harris (32:27):

That's

Clint Harris (32:28):

Kind of where we are in terms of creating enough value that you don't have to liquidate the asset. The only way I know how to do it, you can do that when interest rates are 3%. You can do a property with a single family or whatever, you can buy a multifamily, you can increase the value, put stainless steel granted in the value's going to go up a little bit. Maybe you can refi and at least pull your money out or some of it. But in a high interest rate environment with lower LTVs compressed to 60, 65%, the only way to really get there is you have to add so much value that it has to come from a heavy, heavy value add, which is either a big addition controlling the cost by being the GC or in our mind an asset class conversion, right? Adaptive reuse. When you change

Clint Harris (33:12):

The

Clint Harris (33:13):

Asset from one to another, you change the formula by which the asset is valued. So our anticipation is moving forward. We have a small portfolio of properties that we will be selling. We think we'll position to do very well with that over the next one to two years. Outside of that, we're in acquisition mode. We have an accepted LOI right now on a $20 million project in Georgia, which will be the largest one that we've done. We have several more coming down the pipeline. We'd like to do six to eight deals a year. Average deal for us, not the big one that I just mentioned, but an average deal is we're buying a building for one and a half to two and a half, 3 million. We put two to 3 million into it, we into the whole thing somewhere in the four to 6 million range. And as a stabilized self-storage facility in these secondary tertiary markets across the southeast, they typically are going to land in the 10 to $15 million range, sometimes 12 to 17 depending on the market. And that puts us in a position for the cash out refinance event and continue to scale and move forward.

Scott Meyers (34:13):

Well, I think all of that is wise, and that is not a cookie cutter or a carbon copy of what we're doing, but certainly has a lot of the elements of where we see the market going. Speed is the name of the game and success rewards speed. And so in that two year timeframe that you mentioned, the way you get there and that you have assets in a position to be either able to take advantage of lower cap rate, lower interest rates is through conversions. I mean, that's the only way to get there and ground up right now, even if you have a piece of dirt that is already zoned and still already by the time you get to planning and everything out through and all the permits in place than afterwards is still taking much more time than we have in the past even with our experienced GCs. But anytime you start with the conversion, you've got everything laid out. It is just so much quicker to market to no matter what

Clint Harris (35:00):

City. For just a minute, I think you hit on the most important thing that a lot of people are probably gloss over. People are like, oh, well yeah, it's cheap. It is going to cost $120 a square foot for construction to build a new facility plus the cost of the land, and it's going to take three years to do the entitlement permitting engineering, the most important part of all of that is the speed. We can buy a building for dirt cheap. And our first handful of properties, we did 2K marks, three warehouses, two textile mills at a grocery store and a soda bottling facility. And on the day that we opened the doors as a climate controlled storage for the cost of the building, the land, the construction, everything was an average of 12 months and we were in it for just under $65 a square foot. Now that's getting harder to find, but they're still out there. But that's the number one most important thing is the speed and getting it turned over quickly.

Scott Meyers (35:50):

It affects everything. In the scenario you gave out earlier, if you had to go to a port, another port all the way across the country and it's 15% more, that's fine. I'll eat the 15% more, but if you tell me it's going to take 60 days, I'm going to go the corner and cry like a little child. That's right. Because everything's now really been messed up by that 60 days, not as much as the 15%. That's right. So such as the drum that we are beating over here in all our companies is speed. Yes. Not at the expense of excellence, not perfection. We expect that excellence and speed around here, and those are the two things that we're drilling home in all facets. So Clint, with that, we are running in it to the end of our time together. So good to be able to catch up with you and I'm looking forward to catching up and checking back in with you later in the year to see how things are going. But in the meantime, if people want to learn more about what you're doing or just find out about the brand, where are the best ways that they can find you?

Clint Harris (36:47):

Yeah, the best way is just go straight to the website, nomad capital.us. You can reach out to us, schedule a call, see our journey and our core values and beliefs. The biggest thing I would say is, yeah, we're raising capital for these projects, but the interesting thing is once we do the cash out refinance event, we're keeping the property and the investors are staying in. We aren't pushing out the investors. So it's a 19 to 22% RR during the life of that fund, but beyond that, it just turns into an infinite return. So because of that, the really important thing is making sure that we align with the right investor partners. I don't want to be in a situation where three, four years from now you're disgruntled with whatever decisions we're making because we're going in different directions. I'm still the one that has to take that phone call. So that's for us, the reason it's called Nomad Capital, because a nomad goes where they want, when they want, does what they want, they have a long-term vision in an asset class. It's inflation resistant and easy to manage. And we have that vertical integration. So believe it or not, we tell a lot of people no, because looking for those quick 3, 4, 5 year

(37:53):

Hits, which are great. So for us, we're trying to be picky because if we want to do this for a long, long time together, we want to make sure that we're on the boat together, we're rowing the same direction with the right partners. So

Scott Meyers (38:05):

Yeah, life's too short. I think many beginning capital raisers, they will take an investor and their capital at all costs. They got a deadline to be able to close. But those of us that have been around for a little while, you recognize that's not always the wisest thing to do. Absolutely. They're a client, a partner, even a limited partner. They can make a business not so much fun. And so yeah, there are some folks that we would just say, no, thank you. I don't think that this deal or perhaps we're not for you, but we'll put another deal in front of you if it makes sense. And so we can talk about that another time, Clint. That's right. Recognizing and those conversations and when it comes on, the sooner the better makes life a lot easier. So Clint, you're obviously very well schooled. You had to be for your first profession and very well schooled in real estate as well. So that being said, I know you're no stranger to taking advice. What is the best piece of advice you've received from a mentor or somebody perhaps older and grayer and wiser than you early on in your career?

Clint Harris (39:01):

I think that maybe it's recency bias, but what's really been resounding with me for the last year or two is the concept of risk, specifically calculated risk and understanding that risk is a muscle, right? There's a difference in risk and calculator risk, and I'm willing to be cavalier and I've done a lot of crazy things with my money once we are doing deals with other people's money

Clint Harris (39:23):

That

Clint Harris (39:23):

Is a representation of their store of life energy that is a representation of time away from their family that they spent doing things they probably didn't want to do

Clint Harris (39:32):

To

Clint Harris (39:32):

Raise that capital. So we have a responsibility there to take care of that above and beyond what we would do with our own money. But outside of that risk is a muscle and we should always put ourselves in positions where the more you work that muscle, the stronger it gets. And when you see opportunity, especially when the fundamentals are the same of what you've already been doing, maybe just

Clint Harris (39:53):

Smaller,

Clint Harris (39:54):

You're willing to go after it. And then the idea of mentors and intelligent people that can be a sounding board and using data and analysis and constantly being in learning environment, whether it's books or podcasts or networking or opportunities to talk just like this.

Clint Harris (40:10):

That's

Clint Harris (40:11):

Where the real value is. And understanding that that risk is a muscle. And the way that you build that up is continuing to take calculated risks and becoming more and more sure about the way that you operate because you have those wise voices in your life and give you the opportunity to learn from other people's life experiences instead of making those mistakes on our own.

Scott Meyers (40:31):

Yep, a hundred percent. Well said. We have chats about that in our mastermind as well, and that relates to stay power as well. Those of us that walk with a limp that have been through some of our recessions and have been in business for a little while, we understand when the challenges are coming down the road because we can see it a little farther down the road. And when you know what that looks like and what challenges you could face, then yes, you've done the reps, you've flexed your wrist muscle a little bit more, and so you're willing to be able to now utilize it because you know what is coming, what the risks are, but then you also know to handle 'em and whether you had the state power to be able to do so. So well said, my friend. All right. Well, Clint, thanks so much. I appreciate your time and looking forward to once again catching up with you a little later on in the year. We'll check back in, see how the fund is doing and how 2025 is shaken up for you. So with that Storage Nation, you have been hanging out with the Clint Harris with Nomad Capital. All of his information and bio are going to be in the show notes along with the contact information. So with that, Clint, thanks so much. Take care and have a great day. Thanks Scott, really

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