Self-Storage Investing: How Wayde Elliott Finds and Develops Profitable Deals

Wayde Elliott (00:00)
But it turned out that that project when I exited, made $10 million, which was more money than I made in my entire dental career, 20 years of doing dentistry. So that was kind of the light bulb moment. I would say it’s the second project that really clicked that, hey, this is a real thing and can really do something with it.

Cody Crabb (01:50)
Welcome back to the Real Estate Pros podcast by Investor Fuel. I’m your host, Cody Crabb, and today I’ve got Wayde Elliott with me. Wayde is the founder of StoreIT, where he develops and operates self-storage properties across Oregon and California. Wayde, thanks so much for joining me today.

Wayde Elliott (02:04)
Well thanks for having me. Very grateful.

Cody Crabb (02:06)
Yeah, we’re we’re super happy to have you. Wayde, you we were talking a little bit before the podcast and you have a a little bit of a unique story getting into real estate. You ha you basically had to pivot overnight. Take me back to that moment to kind of introduce our audience to you and and kind of maybe end on how you ended up in self-storage.

Wayde Elliott (02:25)
Sure. Well, I had a successful dental practice for 20 years. Amazing patients, amazing staff, amazing partner that I I partnered with. And I had a patient come in that had some back troubles, couldn’t lean flat, and she had a broken upper second molar. And I was doing a crown prep, and about halfway through the crown prep, I felt a sharp burning pain in my neck radiated down my right arm. And the pain got so severe that I couldn’t finish the procedure.

Actually had to have my partner finish the procedure. So in one minute, in one procedure, one patient, my dental career was done. I blew out two discs in my neck and through, I tried traction, physical therapy, ultimately went to surgery, have a couple big plates in my neck. And that ended my dental career overnight and super, super scary time. I was working three days a week, making 350 grand a year.

Lots of income. I had a fair amount of freedom. I was trading time for money, those three days a week, but it ended abruptly. And that’s what pivoted me to I dabbled in real estate a little bit, but it’s really hard to get all in on real estate when you’re, you have a a dental practice, right? So that—

Cody Crabb (03:39)
Wow.

Wayde Elliott (03:40)
—was the pivot. And—

Cody Crabb (03:41)
Let me just kinda let me get into that just for a second. Was there any indication of this beforehand? Like do you have any symptoms or like maybe like an achy neck or something? Like d was it did it was there a lead up to it or was it just kind of boom?

Wayde Elliott (03:52)
Yeah, I think as a practicing dentist, I mean, most dentists can relate to this. You’re always you always have aches and pains in your neck, in your arms, your shoulder, but you never really believe that it’s gonna take you out. And it did. It it took me out. Holy cow.

Cody Crabb (04:08)
Yeah, well and it’s this is not like a this is not like one of those like I can muscle through it. You told me in the in before the podcast, your doctor actually said, Do not continue being a dentist. Like you actually were told you can’t do this anymore, right?

Wayde Elliott (04:22)
Correct. And I tried all sorts of modalities, traction therapy, injection into the neck, like all of them. And it just it wasn’t gonna happen anymore. So I had to pivot. And I had the good fortune while I was practicing dentistry, I had a patient who was a very, very successful businessman. He owned a lot of businesses, a lot of real estate. And I would always ask him, hey Larry, what is your most successful business or real estate play that you’ve done? And he talked about self-storage and he actually helped me with my first project, which was I’m super grateful for.

Cody Crabb (04:56)
Yeah. So okay, so th this is this is one one of the things I wanted to ask you. So as somebody that you kind of just took a leap and you were like, the safest route is gonna be self-storage. What what appealed to you? I mean, what did he say to you? Like what what appealed to you about self-storage and what kind of ended up being the reason that you stuck with that?

Wayde Elliott (06:01)
I think there’s the least amount of brain damage. So, you don’t have toilets. You have tenants, but they’re not like a multifamily tenant where there’s way more laws around multifamily where you can’t if they don’t pay, you can’t just kick them out. Where self-storage, you just lock the gate. You don’t need a lot of staff. The buildings are, you got concrete and steel around the the it’s basically a garage, right? So—

Cody Crabb (06:26)
Well 99.9% of the time, there’s nobody there. Like they come to pick up stuff, really. Right. Like that’s it. Yeah. So that I I definitely I’ve talked to a lot of people that are like, I don’t the reason I don’t want to be in real estate is because I don’t want to be a landlord. And this seems I’ve thought many times this seems like a really good solution for that because you technically have tenants, but they’re just not there. They’re paying for space that’s not that’s for their stuff, not themselves.

Wayde Elliott (06:52)
And if you have a fourplex, right? One person moves out, that’s 25% of your revenue. Where you have a self-storage facility, our largest facility has 850 units. So you get someone that moves out, it doesn’t really move the needle much. So once you get stabilized in the, you have three, four, five, six hundred units, it just clicks along and you do have some churn. Which is expected, but it’s not the same it doesn’t affect your revenue like a smaller multifamily project would.

Cody Crabb (07:21)
So once you decided to go all in here, give me that kind of first like little little start there. What did that first deal of yours look like? What you you said development was what you are in now, but is that was that what you started in or how how did how did that that transpire?

Wayde Elliott (07:37)
Yeah. So my first project, I was still doing dentistry and dabbling in it and getting it entitled and getting it built and made a whole bunch of mistakes. Like there was a ton of mistakes. You don’t know what you don’t know, right? So you don’t know you don’t know, then you don’t know, and then you don’t know that which is the 10,000 hour. So when I started, I didn’t know I didn’t know. So, I would have change orders that I didn’t know were good or bad or you just don’t know. I had a whole bunch, I had wetland on the property, the property flood, like everything that could go wrong on that first project probably went wrong, which was a blessing because, now I know what to look out for, what to avoid, what some of the challenges might be. So it really turned out to be a blessing. And that first project I sold, had some money, made another mistake. Didn’t pay tax, we’re talking about mistakes, that’s really where the value is. Didn’t pay tax on that money, rolled that money into an 84 Lumber property. It was, I think, 15 acres. It had a 50,000 square foot building on it, built that up, didn’t pay the tax bill. Just kicking the can down the road. You don’t know what you don’t know. But it turned out that that project when I exited, made $10 million, which was more money than I made in my entire dental career, 20 years of doing dentistry. So that was kind of the light bulb moment. I would say it’s the second project that really clicked that, hey, this is a real thing and can really do something with it.

Cody Crabb (09:06)
Yeah, well, I mean hang on here because you just casually jumped from I didn’t know what I was doing to I exited with a 10 million dollar exit. So so what ha what happened between them? Like yeah, that I think everybody on here is like, tell me how to do that, because that’s amazing.

Wayde Elliott (09:21)
Yeah, I think that there was some luck involved. When I got financed on that first deal, banks financed on appraised value. So that was forever ago. They don’t do that now. They give you a loan based on your cost, not the appraised value. And these will appraise a lot higher than your costs that you have in it. So I had some luck there on the first one. The second one, I made some mistakes, of course. But I built it out slowly and added more units and had the good fortune to have a REIT buy it and they wanted it way more than I did and were willing to pay a price that was probably above market and had a really good exit on that one. They’re not all like that. That is my home run with the bases loaded, right? But we model out our deals to have at least a million dollars in value or we won’t even do it. So we have a very specific buy box that we look for, whether it’s a development deal or a conversion deal of a of a building.

Cody Crabb (11:05)
Yeah. So you you said you have a a really specific buy box. What does a deal have to look like right now before you’ll get close to it and kind of consider?

Wayde Elliott (11:12)
Yeah, so we we tend to go in the secondary and tertiary markets where the the REITs aren’t a big factor. So, population of 25 to 150,000 people. There has to be good demand in the market. It can’t be overbuilt. And the the rates on the units have to be good. So I think this is an interesting distinction. When I first started in this business, I relied on my gut and you don’t know what you don’t know, right? So I would just go in with a lot of hope. And that is a terrible strategy. If there’s one thing that I would really recommend is to dig in and ask a lot of questions, be very curious and model out the deal. Whatever you have, if you have to hire someone to model out the deal, just to make sure that it makes sense before you jump in. Like it’s easier to model out, if it’s a single-family home or a duplex, but as you start getting into the bigger deals, you want to make sure you don’t stub your toe. So modeling it out is really important, getting the feasibility, getting all the data to make sure there’s enough demand in that market, the rates. We do secret shopping. So we have a whole SOP and playbook now that’s developed over the last 14, 15 years that, we we have a lot of certainty around deals that we do. I mean, things can still go wrong when you’re developing there’s especially on a conversion, there’s things you just can’t see until you really get in and start doing the construction. But try to get as many of those boxes checked before you jump in. So, really double down on the due diligence and so demand and price per square foot, or if you’re in, doing a duplex or single-family home, really have a good understanding of what am I gonna get what am I gonna get for rent for this unit or these units. So you can model it out and make sure it makes sense. Whatever that if you’re modeling out on IRR or cash flow or, multiple multiple of the amount you invest, just have some data around that and be very curious. So, find your tribe or find your group that you can really lean on to get some experience around that asset class. Cause I’ve been in, I think we talked about this, I’ve been in car washes, multifamily. I was in the cannabis business for a while. I was the first licensed grower in the state of Oregon and that was a complete disaster. On paper it looked really, really good and ended up losing about $800,000. So that was a very, very good learning. So you can make some mistakes, but be curious, I think would be my take-home message and ask a lot of questions. Set your ego aside.

Cody Crabb (13:34)
Yeah, I think it seems like you have a good balance between like trying new things and not being afraid to kind of venture, but also kind of knowing where you are knowing where you live and like kind of sticking to that. You’ve gone from doing these, you mentioned this earlier, with you’ve gone from mentioning okay, let me say that again. You mentioned earlier you’ve gone from kind of doing these with your own capital to syndicating in the last few deals. What why what what changed? What’s what’s kind of changing your mind on that now?

Wayde Elliott (14:01)
We do a meeting, a strategy meeting once a quarter. We have a coach come in and kind of help us with our, our rocks and our KPIs and where are we gonna what are we gonna do? And our goals expanded quite a little bit. And to reach those goals, I didn’t have enough capital to do that. So we raised 6 million bucks for the last two deals that we did and I put 2 million, so we really raised 4 million bucks and I put 2 million of my own capital in there. And this was all new, right? Like, and I made some mistakes on this as well. We didn’t charge any fees. And, my team, my accountants, everybody’s like, Wayde, you have real fees. You have staff, you have a development company, you gotta charge some fees. But I was so interested in just making it, one of our core values is a win-win, or we don’t do the deal. I wanted it to be such a win for the investors that we didn’t charge any fees. And I’m okay with that, but moving forward, we recognize the fact we have to charge some fees to just cover our overheads. So, I’ve made some mistakes along the way. I mean, that 10 million sounds great, but make no mistake about it, I’ve made some mistakes.

Cody Crabb (15:01)
Well, the thing I really like about mistakes is or well, like this kind of feeling of like mistakes are good. It’s always appealed to me because I feel like if you’re not you’re not doing if you’re not failing, that means you’re working below your potential. And so if you if you are actually making mistakes, that means you’re pushing and you’re trying to do something new and better and bigger. So I because it’s above your skill set. That’s why you failed. So I think that’s a that’s a great way to to look at it for sure.

Wayde Elliott (15:27)
And I think the biggest learning, some of the biggest mistakes that I’ve made at the time felt like a curse. But when I look back on those, they were a true blessing. Like they were a blessing. Because, if I was still doing dentistry, I wouldn’t be doing what I’m doing today and have the success in the development world. And I wouldn’t have the freedom that I have. So it seemed like a curse at the time. Same thing in cannabis, right? We had a publicly traded company that was going to buy all of our product. It all went to shit. And at the time it felt like a curse, but it was a true blessing because it helped me focus in. And we stay in our lane now. And I think that’s another take-home message. Like whatever you do, whatever asset class, whether it’s car washes or cannabis or real estate, make sure you stay in your lane. And if it is real estate, pick an asset class, right? Whether it’s multifamily or single-family or storage or industrial commercial, whatever that asset class is. Stay in your lane and get really good at it.

Cody Crabb (16:20)
Yeah. One thing sticks out to me about your story, which is it wouldn’t have happened unless you had done both. If you weren’t a dentist first, you wouldn’t have met this contact that got you into it. And so so like your specific combination of career things it was what allowed you to be where you are. So I I like that you don’t see it as like a and then everything got ruined and I just start over and you’re like, Yeah, next thing, let’s do and you just like what what skills do I have? What I what can I do? What resources do I have network? And I love that. I really—

Wayde Elliott (16:48)
And I think this is another good thing that I’ve learned over the last 10 years is this paradigm shift that I’ve had that if you look at things as on the way instead of in the way, happening for you instead of to you. Just that little subtle shift really changes the narrative you play out in your head. And it’s been super powerful. So now I look at challenges as this is just on the way. And it’s happening for me, not to me. And something good will come from it. This is just part of the journey, part of the process. Sometimes it can be a bitter pill, but usually it turns out for the best.

Cody Crabb (17:23)
That’s it it’s funny that I still can’t really believe how much just kind of viewing things as like almost trying to trick yourself into being positive, like how well that works. You can know you’re doing and it works. I’m a performer. I have done music stuff and have been on stages a lot and stuff. And one thing I would I would I never really got like stage fright, stage fright, but I get those jitters before you walk on stage. And then someone told me one time, yeah, what I do is I just pretend that I’m excited and that’s why I have jitters. And then I started doing that and I was like, Why does that work? Like it completely your body’s like, yeah, no, that’s fine. We’re excited. So we’re not nervous anymore at all. And so it’s it’s funny that like your brain is way more powerful than than we give it credit for sometimes and in that kind of stuff because—

Wayde Elliott (18:06)
I love that. I’ve been doing a lot more public speaking lately and same thing. I get a little jittery. I love that shift of I’m jittery because I’m excited. I’m going to use that. I’m going to steal that.

Cody Crabb (18:15)
Yeah, please do, yeah. Because it totally blew my mind when they said it, because I was like, makes you go like, this is just different. This isn’t scared jitters, this is excited jitters, and then you’re like, then it’s fine, then you’re not nervous. So yeah, it’s that kind of thing that it can really it can really change everything for you. So give me some more what what are some other things in in your mindset that you’ve changed that have allowed you to kind of push forward and and make some changes in in how you see things.

Wayde Elliott (18:40)
Yeah, I think beliefs and gratitude. So every morning I have a gratitude practice that I do. It’s a gratitude journal, but if you don’t if you’re trying if I’m traveling, I don’t bring the journal with me. And I do a five-finger gratitude. So something small I’m grateful for is the the little finger. The ring finger is a relationship you’re grateful for. The middle finger is an FU that you’re grateful for. That one’s a hard one sometimes. You gotta really think about that, but be grateful for that FU. The pointer finger is something you can point at that you’re grateful for. And then the thumb is something within yourself you’re grateful for. And just doing that quick little gratitude practice really has helped me stay in a what I call a beautiful state, which is I have an affirmation every morning. I’m gonna live 95% of the time in a beautiful state. And we all have a choice, right? We can either choose to be in a suffering state, whatever it is, if something goes wrong on a real estate deal or someone cuts you off, you can choose to either be in a beautiful state or a suffering state. So having that gratitude practice helps me maintain that beautiful state. And 95% is a pretty lofty goal because there’s a lot going on. But that’s really helped. And I think the other thing that’s helped is being intentional with my beliefs. So Napoleon Hill, who wrote the best-selling success book of all time, Think and Grow Rich. He said, whatever the mind can conceive and believe, it can achieve. And I think that belief part is you have to conceive it, but you also have to believe it in your heart. And I’ve I’ve really leaned into that belief cycle. They’ve written books on it, psycho-psychocybernetic loop. And, your beliefs lead to your thoughts, your thoughts lead to your emotions, your emotions lead to your actions, or more often than not, what actions you don’t take. Your actions or lack of actions lead to your results. And then that ties back into your belief. So this, the more I think about it, the more I lean into it, both personally and professionally, has really changed my life, like in a profound way. And when I go back to that belief cycle, like what are my beliefs or what are my thoughts? How am I feeling? Am I in a beautiful state or a suffering state? Because you make different decisions. If you’re in a suffering state, your decisions that you make are way different than if you’re in a beautiful state. So I think that’s something that’s really moved the needle for me and hopefully it will land with some of your listeners and they’ll find value.

Cody Crabb (20:53)
Finger thing, I’m totally 100% stealing that from you because that is the coolest. That is it and also easy to remember. Like I already can kind of I can already remember it just because of the mnemonic device. So that’s awesome. Did you get that from somewhere? Or was that all you?

Wayde Elliott (21:05)
Yeah. So I’ve been a part of EO and someone in my EO group that—

Cody Crabb (21:09)
Okay.

Wayde Elliott (21:09)
—six or seven years ago or eight years ago and it just stuck because it’s so simple. I’m a simple guy. I learn best at the eighth-grade level. And so I want everything simple. And that was very simple to me.

Cody Crabb (21:22)
Love that. Yeah. I will 100% be stealing that. So thank you so much for all that you’ve given us today. This has been great. Before we kind of wind down, I’d love to hear are is there anything that you’re that’s you’re looking forward at that you’re excited about? What’s what’s coming up for you and StoreIT that that is has kinda kinda got you got you excited?

Wayde Elliott (21:38)
Yeah, I think we have a team right now in place that is so amazing and I’m just looking forward to scaling up and really doing some some big things and just applying all of our core values and letting the team do their thing and and and really scaling it up, doing some awesome things in the storage industry.

Cody Crabb (21:57)
Well, I can’t thank you enough. This has been really good. Just to kind of leave our listeners with one final thing. For someone that’s listening who, they’re where you were before that first deal, maybe they’ve got a job, maybe they’ve got resources, they haven’t made the jump yet, and maybe they’re afraid of this kind of abrupt thing happening. They want to be prepared. What’s the first thing that you would tell them to start doing now?

Wayde Elliott (22:16)
I would I would let everyone know that I didn’t come from money. We were definitely poor growing up, you know, shopped at the Goodwill and Kmart for our clothes, my sister and I. I didn’t come from a real estate family. And I I didn’t come from a family that prioritized education. So I think I would shift your belief that, you know, if someone like me that didn’t come from money, didn’t come from education, didn’t come from real estate, has done this, that it’s possible. Just know that it’s possible and really have awareness around your beliefs. Like what are your thoughts every day? Is it, you know, I can do this or I can’t do this? And you know, how does that make you feel in your heart? Are you feeling good about that, bad about that? And really explore your beliefs. Like, what are the beliefs? And I think—

Cody Crabb (23:00)
The why behind it and stuff. Totally. Totally.

Wayde Elliott (23:03)
Yeah, it’s possible. And whether you start with, you know, a single-family home, I would just encourage to start somewhere. We try to be intentional about posting stuff, simple little principles that I’ve learned. I’m a big learner and a grower and spend, I don’t know, probably a hundred grand a year on learning and growing. And I try to give that back through our social media channels. And I’m happy to share. We don’t sell anything. So my passion is just sharing and giving back what I’ve learned from these, you know, different courses that I’ve taken, seminars, masterminds, you know, different learnings that I’ve done.

Cody Crabb (23:37)
Your experience sounds pretty helpful too. Yeah, on top of all of that. Well, like I said, thank you so much. This has been a really rich episode. Everyone definitely got something out of this. So I can’t thank you enough. Audience, thanks for your time as well. If you liked this one, make sure you don’t miss the next one. And we’ll see you there. Wayde, take care. You have a good one.

Wayde Elliott (23:53)
Thank you, Cody.