293: My journey and how I got started in Real Estate

I write a lot of content about what I know, what I read, and what I think. I don’t know it all, but I’ve learned a lot from my journey and hope that my readers and listeners can learn from it as well. I’ve talked about my journey in fragmented bits and pieces as it relates to podcast topics, but I’ve never given a full picture of where I’ve been and how I got here.

I was born in 1989 in small-town Indiana; my mom was a nurse and my dad was a manager at a construction company. We were very middle class, and while I never had to go without we weren’t ones to spend on extravagant vacations or meals out. I played basketball and ran track, and was lucky enough to be the last guy recruited to join the track team at Cornell. I was the only person in the history of my county to go to an Ivy League school.

On Cornell’s campus in Ithaca, New York, I met a lot of interesting people who were doing a lot of cool things. I didn’t take life too seriously, spent a lot of time having fun, drinking beers, socializing, and dating, meeting my wife during my senior year. My track coach had a huge influence on me and convinced me to try the decathlon, being that I had been a decent hurdler and sprinter beforehand.

I took a few entrepreneurship classes, not even knowing that I wanted to start a company. My first company, Storage Squad, came to me during finals week of my junior year, as I was trying to lease out my apartment for the summer at the same time everybody on campus was. A friend reached out who was less interested in living in my apartment and more interested in storing his stuff there, we made a deal for $150 for the summer and I moved his boxes into my room.

This got me really excited, and I approached my friend Dan about this storage idea. We shook hands on a 50/50 deal, put flyers around campus, and were able to fill my apartment and Dan’s basement. We went home for the summer and decided to get more serious about the business and build a website for student storage. There were about 10 competitors in the space, none of them particularly strong, so we took bits and pieces of their business model and offerings to create our own. We decided that if we got 250 customers our senior year we would forego the job market, and we ended up with 260.

As we got more serious about it, we knew that we needed to expand beyond Cornell. We landed on universities in Iowa, Illinois, and Indiana based exclusively on campuses where we knew people. We bought cargo vans for each location, built processes, and rented warehouses. We grew from 260 customers to 550, then 1500, and then 3000, hiring part-time and full-time employees along the way and expanding to Boston.

Boston was a huge market for us. I spent two months nonstop advertising for customers, primarily with sidewalk chalk, and it was so successful that we had more customers than employees. With 2000 customers in our first year in Boston, we were way too small, it was extremely stressful being understaffed, and I was handling labor by day and customer service and management by night. We got through it and made a profit, but it was exhausting.

By 2015 Dan and I had about $500K in the bank and had experience selling, marketing, negotiating, hiring, and firing. We knew Storage Squad wasn’t our future–it was too stressful, unhealthy, and impossible to find a sustainable work-life balance. We started to think about real estate and did research on where to build a self-storage facility. We found property in Ithaca to build on and needed $1M in cash, so we structured some funky private equity terms and went on a roadshow of investors, pitching our idea at kitchen tables to get the cash. We even got the broker who sold us the land to invest in it.

We had a construction budget of $1.9M including the land and naturally went way over budget at $2.4M. We had to ask investors to chip in $25K more each but ultimately opened for business in May 2017. Things started going well, we filled up the facility, and by 2018 were out of drive-up space so we bought $400K of additional property across the street.

We bought three more small properties in 2019, including one in Erie, PA that we bought for $625K, not knowing it was a total mess of neglected customers. We had to saw locks and hold auctions for abandoned units, but that property is now worth $2.5M and has seen huge revenue increases.

We hit some big home runs with our early properties. In 2019 our Ithaca property was appraised for $5.2M, we cash-out refinanced it with $4M of new debt, paid out our partners, and kept some cash for ourselves. At this point, we knew we needed to get out of student storage and work on real estate full time.

Today we have 55 properties, 275 active investors, and have acquired over $75M of self-storage facilities. I turned 33 in July, and it’s been a tough journey but I’m so proud of what we’ve been able to accomplish. Student storage was a challenging business, but it gave us two things early on: $500K of capital to use on a real estate deal at 25 years old, and operational prowess. We learned how to solve problems, deal with real stress, sell, hire, fire, manage, and take risks. It taught us how to build and manage a company, and it’s been an incredibly valuable skill that has translated to real estate success.

I’m not a genius. There’s so much that I don’t know, and I figure it out as I go. Teaching and putting myself out there has transformed my career, and I look forward to seeing where the next decade and beyond takes my journey.

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The Nick Huber Show: https://spoti.fi/3AM8aoE

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About Me

I started the Sweaty Startup in December of 2018 because I believe the Shark Tank and Tech Crunch culture is ruining the real spirit of low-risk entrepreneurship.