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Show Summary
In this episode of the Real Estate Pros podcast, host Michelle Kesil interviews Cody Elliott, a storage unit investor who shares his journey into the real estate market. Cody discusses his background in equipment sales, the keys to successfully operating storage units, the challenges he has faced, and valuable advice for aspiring investors. He also outlines his future goals for expansion, including the potential for RV storage, and emphasizes the importance of personal finance management in real estate investing.
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Investor Fuel Show Transcript:
Cody Elliott (00:00)
Yeah, so I appreciate that question because I get that a lot. You know, me, I’m a small investor, you know, not a huge institutional investor, you know, just small. And I would say to just a normal man or woman as far as how to get started, especially if you’re young.you know, pay things off and get your personal finances in order. That’s kind of how we did it. We paid off our student loans quick, then we paid off our house quick. We just made extra payments and we built equity in that home. And then we could borrow against that real estate to build this real estate.
Michelle Kesil (02:06)
Hey everybody, welcome to the Real Estate Pros podcast. I’m your host, Michelle Kesil, and today I’m joined by someone I’m looking forward to chatting with, Cody Elliott, who has a storage unit, Real Estate Investing Business. So excited to have you here today, Cody.Cody Elliott (02:24)
Thank you, Michelle.Michelle Kesil (02:27)
Yeah, definitely. I think our listeners are really going to take something away from how you’re approaching your storage unit business. So let’s dive in.First off, for those not familiar with you and your work yet, can you share what your main focus is these days?
Cody Elliott (02:44)
Yeah, so my primary business…since 2012 has been equipment sales. So I sell small construction equipment, livestock handling equipment, trailers. And what kind of got me started in my interest in real estate? ⁓ Well, my grandparents had some rental houses when I was a kid. So I learned early, I didn’t want to be in the residential rentals, but when we built our shop here for our equipment business, ⁓ we started thinking about the diversification, you know, of our long-term, I guess, investments.
We had the opportunity to buy some storage units here in Marlowe where we live. So it’s been a really good experience so far. Like I was telling you, we bought them in 2022 and then…
We’ve pretty much been 100 % full since then and learning the process of rental contracts and tenants, dealing with those. And then we hope to grow that business where the place we have some bare land that has the opportunity to continue to grow that. So.
Michelle Kesil (03:51)
Awesome. And are you only operating currently in your Oklahoma market?Cody Elliott (03:57)
Yes, so far right now in a little small town called Marlowe, Oklahoma, which is Southwest Oklahoma, about a town of 4,000 people. And then we own some land next to an industrial park in a small town called Duncan, Oklahoma, about 20,000 people. And ⁓ so that’s our future goal too, is possibly growing that business and getting another location close to us, but probably stay close to Marlowe, easier to manage, know, in Southwest.Oklahoma.
Michelle Kesil (04:30)
Awesome. What do you feel have been some of the main keys that make the biggest difference in allowing your business to be able to grow and to run smoothly?Cody Elliott (04:40)
Yeah. On the real estate and storage unit business. ⁓ I think we just have a strong market here. We’re limited on, on space. So that helps obviously. ⁓ but trying to navigate those good tenants.⁓ in the application process, I guess you’d say, and keeping good tenants. That’s been a learning curve. like I said, mostly we’ve been pretty much full since we’ve owned them. We’ve had a little bit of turnover, but the good thing, we’ve had long-term tenants in our units so far.
Michelle Kesil (06:05)
Yeah, and how has that operational journey looked like for you?Cody Elliott (06:11)
Yeah. So that the funny thing, you know, when just jumping into the real estate, especially on the rental side was what insurance do I need? What contracts do I need? Um, and like I said, most of my tenants are, um, I guess you’d call them commercial customers. They run or store business assets there. So that’s kind of nice. And my units have a, an office. So I do rent out an office space to a customer or a tenant and younormal wear and tear maintenance, garage doors going bad, breaking down, ⁓ electrical breakers getting flipped in the middle of the night, things like that. So learning the operational side of it as well as getting payment on time, keeping people in there, communicating them when they get ready to move out. That way I don’t miss a month of revenue on a unit.
Michelle Kesil (07:11)
Yeah, absolutely, that’s important. What’s been some of the biggest challenges that you’ve experienced?Cody Elliott (07:19)
So far,I was, I would say the biggest hurdle, especially to profitability has been my increased in insurance, you know, my liability and property insurance, as well as our property taxes. I see those as, you know, you can’t, I feel like you can’t raise the rates fast enough, especially when you’re not turning over tenants. You want to keep good tenants. So you don’t want to keep raising their rates. ⁓ but at the same time costs are going up, ⁓ utilities, ⁓ it is in city limits, you know, so I’ll,
We have to use municipal ⁓ utilities, you know, and as a business account, they, you know, they add a business fee. Now, Oklahoma does have some of the lowest ⁓ utility rates, electrical rates, I think in the, in the region. So that’s nice, but you know, that balancing all those, all those bills and, you never know your property insurance and property taxes.
you know, if they’re going to increase five to 10 % a year, then I’ve got to keep up with, with, ⁓ you know, my rental charges, you know, my fees.
Michelle Kesil (08:28)
Yeah, definitely. And as far as gathering the investments and managing the storage units, what have been some of the major lessons that you’ve learned?Cody Elliott (08:44)
Yes, luckily I haven’t had to deal with any legal issues yet. ⁓ But so far it’s been preventive maintenance, of course, and taking care of the property. we have our units are highway frontage. So I’m looking to.you know, try to maximize that frontage, whether I could supplement, you know, broadside of a building for some advertising just to get extra revenue. ⁓
you know, adding my units have lights and things like that. So it’s, can upsell the quality of the unit. It’s not just a dark, you know, powerless unit. So trying to learn to upsell the rate, you know, because my units have more to offer and the location and, ⁓ you know, so those are some of the things I’m working on and learning about. So, you know, and being able to respond to tenants and things like that.
Michelle Kesil (09:49)
Yeah, and are you managing everything from the day-to-day operations as well?Cody Elliott (09:56)
pretty much. ⁓I’m the, you know, the, take all the calls and things like that, you know, and then of course, any, any major maintenance, you know, outsourcing that, ⁓ that will be something that we’ll have to work on as we grow. And, know, with our primary business and I don’t know if I told you, but I’m running for state house of representatives. So obviously if, if I get into office, I’ll be busier, you know, so learning to manage that as we grow, especially if it’s multiple locations may have to, work with a property manager.
or have somebody, you you outsource, of course, your lawn mowing and your general maintenance. So balancing those as a secondary business from my primary business, you know, it’s just, you can learn a lot of life lessons through that.
Michelle Kesil (11:18)
Definitely. And as far as like your equipment business, does that like fit into the real estate or what type of equipment are you selling?Cody Elliott (11:28)
Yeah. most of my, so used equipment as far as construction equipment, scissor lifts, light towers, and then a lot of skid steer type attachments. So implements. So most of my customers are construction customers, construction, you know, contractors. And so that’s been one good thing is that if I need an overhead door or plumber or electrician, I’ve already got a lot of relationships out there from guys that I’ve done business with in the past. And like I said, we built this shop that I’m sittingin in 2020, 2021. And after we built this little shop, it’s on a couple of acres and contractors, my customers have told me, Hey, we need more little shops like this. There’s nowhere to rent small shop space. And so it kind of got my wheels turning too for future growth as well as maybe looking at the opportunity to build some small shops like this, small square footage for contractors.
who need to rent just a small space. So I think there’s a lot of opportunity in the future for that as well.
Michelle Kesil (12:36)
Yeah, definitely that’s exciting. What advice would you give to someone that’s looking to also start investing in self storage?Cody Elliott (12:50)
Yeah, so I appreciate that question because I get that a lot. You know, me, I’m a small investor, you know, not a huge institutional investor, you know, just small. And I would say to just a normal man or woman as far as how to get started, especially if you’re young.you know, pay things off and get your personal finances in order. That’s kind of how we did it. We paid off our student loans quick, then we paid off our house quick. We just made extra payments and we built equity in that home. And then we could borrow against that real estate to build this real estate.
We did the same thing with our farm. Pay one thing off quick as you can, then use it. You you have, you have, ⁓ I guess you’d call it leverage or that relationship with the bank that you have assets. It’s easy.
you have collateral and you can call your bank and they’re quick to, know, the process goes quicker when you want to borrow money from them. So definitely getting your personal finances in order before you become a business investor for sure matters and have some cash on hand, that down payment. The more cash you have, the more negotiating power you have when a deal comes available. So that would be my biggest advice is get your personal finances in order.
Michelle Kesil (14:05)
Yeah, absolutely. That’s important for people to get sorted.Cody Elliott (14:11)
Yes, for sure. would like to, you know, as we grow this, of course, I’m learning on the job about real estate, but that would be great if I could become more of a, you know, a partner, a group, or, you know, as I learn more about these things and I would love to, you know, branch out into other real estate investments. So I’m learning, just dabbling in my toes in the water here, trying to learn as I go and not get so big that the risk isn’t there that ifI fail with everything you know life ends so
Michelle Kesil (14:46)
Yeah, absolutely. And what are you most focusing on solving or scaling to next?Cody Elliott (15:35)
Yep. So as far as my, my, real estate investments, our storage units. right now they’re, they’re, ⁓ kind of a drive through, like I was telling you, ⁓ the drive through double door. They’re great for small business space, you know, things like that, easy access, you can pull through. So the property we have, my long-term goal is to do RV storage. ⁓All the RV storage around here is full. So that’s my goal is to do RV storages. And so I’ve got room at our property here in Marlowe to probably add 10 units there. And then at my property in Duncan, it’s three acres right next to an industrial park. So I may, I may do a mix. It kind of maybe depends on zoning and, and cost structure. But again, I would make possibly like to look at, you know, some kind of commercial rental.
or if not, you know, just general storage or RV storage there. That’s our long-term goal with those two properties.
Michelle Kesil (16:39)
Yeah, amazing. Are there any mistakes that you’ve made along your journey that you’d like to share with others so that they can learn from them?Cody Elliott (16:52)
Yeah, you know, especially like in the negotiating or construction phase, like in our real estate here at the shop, I used, course, a contractor that I knew, a friend, and then all of our subcontractors were friends and locals. So it’s very hard when it’s difficult when you need to have a hard conversation with a friend and, and same with tenants. So, you know, my rental tenants, they’re all local. You know, there are a lot of our business people.and it’s really hard to have to call them multiple times to collect rent or if they possibly break something. So I would say a good life lesson is…
that balance between personal relationship and business. You know, have to keep those two kind of separate. And so that’s definitely in business in general and in real estate, I’m learning that, you know, put it in writing, put it in paper, agree on it upfront, set the expectation of what each of you, you expect of each other. And then when problems arise, then it’s pretty black and white who’s responsible.
Michelle Kesil (18:02)
Yeah, absolutely. That’s an important one.So what does the day to day look like in terms of managing these facilities? ⁓
Cody Elliott (18:16)
Well, luckily it’s…been pretty easy day to day. ⁓ It’s just making sure the lawn gets mowed and payment is in within three days of when it’s due at the first of the month. So the rental side, like I said, I’ve got great tenants. They don’t call me much. So I’m blessed there to be fully occupied and have great tenants. the day to day, course, always thinking about my property taxes and property insurance, those input costs.
How can we be more efficient on utilities there? You know, and remembering all the preventive maintenance of the doors and the locks and things like that. So, ⁓ so far it’s been a great experience. And like I said, I have an experience through my grandparents with residential rentals. I want to stay away from that from, so that single family or multifamily homes right now, I’m not interested in any of that. So that’s been, and that’s the reason I’m thinking about expanding into like an RV storage.
They won’t be in there every day. It’s not like they’ll be coming in and out all the time. They won’t live there full time. So I hope that the maintenance would be easier that way. you know, people that own RVs, of course, hopefully wouldn’t have a problem making their monthly rental payment. So that’s kind of my goal there.
Michelle Kesil (19:41)
Yeah, awesome. Do you have any other goals for the rest of this year?Cody Elliott (19:49)
For this year, and it’s, it’s a crazy year. Like I was telling you, I’m running for state house of representatives here in Oklahoma. So my elections in June. So we’ve kind of gone, all right, what happens in June determines our future here. But yeah. ⁓ that, like I say, I’m, my plan is, and I’m, I’m bad about this and I’m sure other investors will can maybe, ⁓ understand this. I have always been a cash paid off type person. I don’t like a lot of debt. maybe I.look too much of the Dave Ramsey side instead of like the Robert Kiyosaki side. But.
You know, in order to grow, know, we’re going to have to take on good debt. So start thinking about that long-term plan of either paying, you know, the storage units off that we have now, and then using that equity to, you know, for construction on the new ones. ⁓ You know, but we don’t want to wait too long that we miss the opportunity to go ahead and fill up those new units, you know, build them and fill them up. And so even if, you know, if we start construction right now on these
units we want. We’re probably looking a year out before, you know, at capacity or, know, before the construction is completed. So one of those deals trying to plan out 12 to 18 months and making sure we don’t wait too long and miss an opportunity. So thinking about that in the real estate side for sure.
Michelle Kesil (21:17)
Yeah, absolutely. Those are important things to plan and get ahead of.Awesome. Well, before we wrap up here, if someone wants to reach out, connect, learn more about what you’re up to, where can people find you and connect with you?
Cody Elliott (21:39)
Yeah, you bet. So my, uh, equipment business is frontier equipment sales in Marlowe, Oklahoma. Um, they’re welcome to reach out to me through Facebook. My personal account is Cody Elliott business account is frontier equipment sales, frontier storage, LLC, our phone numbers on both of those businesses. can call 580-475-8879. And like I said, reach me through pretty much any of the social media is we’d love to talk to, especially a new, a newcomer like, like me that if somebodylooking to get into real estate, welcome to reach out to me. Business, men’s ministry. If you want to talk about family business, real estate, politics, we can talk about any of those things. So I’d love to connect with anybody.
Michelle Kesil (22:23)
Perfect, well, appreciate your time and your story. Thank you so much for being here.Cody Elliott (22:30)
You bet. Thank you, Michelle. It was great.Michelle Kesil (22:32)
Of course, and for those listeners tuning in, if you got value, make sure you have subscribed. We have more conversations with operators like Cody who are building real businesses, and we’ll see you on the next episode.
