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We educate investors and potential investors on the in's and out's of investing in rental property. We focus on residential and multifamily investing, but include commerical, storage, mobile home parks, and more. We interview industry experts on tax strategies, property management, vendor selection, syndications, capex, and more.
We're starting to use some AI. Our sites now have cameras that are monitored twenty four hours a day remote, and they have speakers. So if someone comes on-site, they someone watching the cameras can say, hey, red sweatshirt, the police have been called. You need to leave right now. There is opportunity.
Wayde Elliott:I'm always open to learning better ways of doing things, and, you know, we always one of our core values look for opportunities and solutions, not problems. So if there's a better way to do something and it involves AI or a different technology, we always research that, and we always wanna explore that.
Nicholas Cook:Hey, investors. Welcome to the Retire on Rentals podcast. I'm your host, Nicholas Cook. And in this show, we explore how to optimize real estate investing, create passive income, discuss operational tactics, and ways you and your family can retire on rental income. If you wanna invest in real estate or currently do, then this podcast is for you.
Nicholas Cook:Okay. Today's guest here is Wayde Elliott with STORE IT. He is the visionary over there, setting the sites for where the company is going, what projects they're focused on. Wade, we're really excited to have you on the podcast today to learn more about your business, what you've accomplished, and help listeners understand essentially the storage business. But before we get into your, you know, storage career, as you might say, what did you do before that?
Wayde Elliott:Well, I was a dentist for twenty years, a practicing dentist for twenty years. That's where I got started and allowed me to transition into the self storage space.
Nicholas Cook:Got it. And so you're obviously, you know, you're practicing dental work. You know, it's kind of a big jump. Right? It's not exactly like a related or adjacent industry.
Nicholas Cook:How did you decide that self storage was gonna be the business for you that you wanted to move from, you know, a successful practice as a dentist to something that, you know, candidly is probably a little more high risk?
Wayde Elliott:Yeah. I had a patient that came in that owned about seven self storage facilities, and I loved his lifestyle. He had a lot of freedom, and I really valued that. I didn't like trading time for money. The only time I was making money in dentistry is when I had my hands in someone's mouth, and he would come in, he traveled around, he did fishing and hunting adventures, and he had a lot of freedom.
Wayde Elliott:So every time he would come in, I would actually go over. I would have hygienists standing around me like, Hey, you got to come do a hygiene exam, and I was always under the mindset. This is important stuff. Like, wanna get some knowledge.
Nicholas Cook:It's your window of opportunity.
Wayde Elliott:Yes. I'm a big believer in not reinventing the wheel. If it's been done and it's been done effectively and efficiently, I wanna learn from that. I'm a big learner.
Nicholas Cook:Great. Well, obviously, you know, there's a lot of people out there who hear about investing in real estate a variety of different ways. And a lot of people have concepts or dreams about moving from their current role to really doing what you did. And so it takes a lot of, you know, courage and bold action to do that. So maybe you could just tell us a little bit about your first storage deal, how you got started, where that was.
Nicholas Cook:I mean, there's a lot that goes into, you know, going from, hey, I would love to have this lifestyle to, you know, having a facility.
Wayde Elliott:Yeah. I think one thing that's important to tell your listeners is that I was really forced into it. I had a spinal tooth disc in my neck that were blown out. Was working on a patient. In one procedure, one day I was doing dentistry.
Wayde Elliott:The next day, that was the last day I did dentistry. So I was kind of forced to start swimming and really understand and shift careers because I couldn't practice dentistry any longer. So I, at the time, I believed that to be a curse, but it actually turned out to be a blessing as I was able to focus a lot more of my time on understanding self storage and really going all in and really digging in. So I think the first facility that we built, I had a lot of help from that patient. He was very giving with his time and knowledge and Awesome.
Wayde Elliott:It was close to my practice, so I could really understand it. But I did make some mistakes. So it's it it wasn't all rainbows and So
Nicholas Cook:in terms of that first deal, you said that you developed it. So rather than just buy a storage facility and say, hey. You know, I'm gonna try to learn from one that's already running. It's got some tenants in it. Like, you did really one of the more, you know, high risk, I guess, from my perspective, high risk endeavors.
Nicholas Cook:I mean, development has high risk, high reward. Why did you decide to build out your first site instead of acquire one?
Wayde Elliott:Yeah. That was a that's a good question. I I think you don't know what you don't know. Mhmm. And I just assumed that that was what to do.
Wayde Elliott:There was a piece of property that was in Saint Helens where I lived, and as we got into it, there were so many challenges that I just didn't know or understand, and we just worked through it, and we just we had to move the highway access. We had to put a culvert under a railroad. There was wetland issues. There were some environmental issues. There was like a whole host of things, and I think I just, not knowing what I didn't know about development, I just trudged through it and went through it, and I had the good fortune at the time that banks appraised that property on or they gave me funding based on the appraised value, not on the cost to build the facility.
Wayde Elliott:So, I had that luxury of really levering up on the appraised value because it appraised for a lot more than what I had to put in.
Nicholas Cook:Mhmm.
Wayde Elliott:Now, we don't have that luxury any long
Nicholas Cook:any longer. It's Fair enough.
Wayde Elliott:It's cost and not appraisal that you have to bring the cash in. So it's changed a lot since that first one. Yeah. So I was very fortunate on the first one.
Nicholas Cook:Well, that's great. And, you know, one of the things, at least, you know, when I got into real estate, I got into it flipping houses, and the first deal I did was, I mean, tons of stuff went sideways because I really didn't know what I was doing. However, between the first deal and the second deal, I hit a home run on the second one. And it was because I learned so much from the first experience. Maybe you can talk a little bit about just the journey from that first deal to to the second one, and maybe how that one maybe went differently or what you learned from that, what you implemented.
Nicholas Cook:Just because that progressive learning process is like, I mean, that's that's where the experience compound. So maybe you can tell us about that.
Wayde Elliott:Sure. I had a very similar experience. My second deal was the home run. Mhmm. And we actually sold the first one, took the capital, rolled it into an old 84 lumber site in Forest Grove, and that we didn't have to deal with the wetlands or moving access.
Wayde Elliott:There was already a building that we just put self storage inside the building. There was already carports there that they stored lumber under, so we use that for carport parking for RVs and boats. So
Nicholas Cook:Oh, wow.
Wayde Elliott:It made it a lot easier, and there were some light bulbs that went off on that deal. We made more money on that one deal than I did for doing dentistry for twenty years. So that's really what lit the fire, if you will, and started to accelerate the development team and projects that we do. Got it. Having that home run.
Nicholas Cook:Yeah. And so the second facility, is that something it sounds like you guys basically bought the site and then developed it and put more units. So your trend has been development. Is that pretty much what the focus is of STORE IT as you guys find sites, develop it, or do you do, you know, repositioning of existing facilities? You know?
Nicholas Cook:And if it is one or the other that you focused on, maybe you can explain why you've decided that's the path.
Wayde Elliott:Our focus is to add value and whatever that looks like, we have two models. We go ground up from just the dirt, and we also will buy a warehouse or a lumber yard or a manufacturing facility and convert that or a conversion project. So one of those two and we base our decisions based on adding value. How much value can we add to store it and to investors that come in on these deals? So we don't buy existing self storage facilities.
Wayde Elliott:It's harder for us to add enough value, get enough juice out of that squeeze to to make it worthwhile.
Nicholas Cook:Got it. And so one of the things too, you know, in in real estate, and I I reference, you know, real estate because that's my wheelhouse. Right? Whether it's multifamily residential, those kind of things. But, you know, we rely heavily on comparables, and it's very local business.
Nicholas Cook:And I assume that your first site was in a completely different location than your second site. Yep. So how do you go through some sort of due diligence to feel like you should move forward and that there's a demand for that? Obviously, your your goal is to add value. You're creating a a product where there's not enough supply.
Nicholas Cook:How do you decide, like, hey. I'm gonna go to this whole new market, essentially. I mean, maybe a submarket, but still a new market and have the confidence to develop.
Wayde Elliott:Yeah. I think when I first started, I relied on my gut and just a feeling. I didn't have any of the tools that we have today. So now, today, we model everything out, do a perform a one year, three year, five year. We do feasibility studies.
Wayde Elliott:We do geotech studies. We, you know, have a whole system and playbook, if you will, from start to finish where when I first started, it was just kind of willy nilly and more of a gut. More. And it worked out for me, obviously, but now there's a lot more confidence, especially as we take on investor dollars. It's so much more important to have really a system that we take it through and ensure that it's profitable and we can add value.
Nicholas Cook:Yeah. And that that makes sense. And sophistication, you know, dials up as your experience goes. And yeah. Mean, I look at what I've I've been in real estate for twenty years and in management for seventeen, and if I think about what I was doing in the first five years, I mean, was just I mean, it's pretty embarrassing looking back.
Nicholas Cook:But you you like, you mentioned earlier, you don't know what you don't know. What is what do you think is the hardest part of development? Like, in terms of, like, every kind of process has a a pain point or where there's a high area of friction or where you think most of the risk is. Like, what what would you say is the most challenging or hardest part about developing?
Wayde Elliott:I would say there's really two. Like, identifying sites that we can add value to. So we may go through 30 properties, 30 sites or buildings that we want to convert, and maybe one of those 30 actually makes sense for us to do. And then I would say the second one is all of the bullshit around the jurisdictions, whether it be the county or the city, and, you know, their interpretation of the code and our interpretation is different, and what they believe to be right. Like, we're going through it right now where our property's in the county, the city wants to annex us, we don't wanna get annexed, so they're wanting us to give them a half acre of the site and like all of this other bullshit.
Nicholas Cook:Blackmail. Yeah. Basically.
Wayde Elliott:We pushed back, and we actually had some huge wins. Like, a lot of the folks in the county are getting behind us and supporting us because the city is being so unreasonable. So I think it's dealing with all of the different bureaucracies and jurisdictions, whether it be Division of State Land or the county or the city or Army Corps of Engineer. Just trying to get it to the finish line is is a huge challenge and a process. Without a playbook would be a lot more difficult.
Wayde Elliott:I look back on some of the early projects that we just did from gut and just kind of trudged through it and made our way through it. But looking back, you couldn't do that today. It would be much, much harder. You probably could, but it would be a a lot more risk. I wouldn't wanna take that risk for me or the investors.
Nicholas Cook:Yeah. And as you've expanded your development and done more development, have you scaled up the size of the facilities? Like, did you I'm not sure on the relative typical sizes, but did you go from, like, 50, you know, facilities or storage units to a hundred? Or, like, is that something that you've added as part of the expansion and development? It's just bigger sites?
Wayde Elliott:We've identified we're a lot more specific on our buy box now, so we know that we want five acres. So we can have enough to have a manager on-site and have enough revenue coming in so we can hire a property management company like you. Like, it has to be big enough that the economics work.
Nicholas Cook:Yeah. That makes sense.
Wayde Elliott:So it's it's, I would say, gotten much bigger. Like we have a facility now in Woodburn, Oregon that has 230,000 square feet, where, you know, our first one was 60,000 square feet. So we, I would say we have, but we're more interested in opportunity and value. So we would do a smaller site if we can add value and get the same IRR return to us and the investors.
Nicholas Cook:Yeah. No. That makes perfect sense. So one of the things I'm curious about, and this is kinda circling back to the origins of how you got started in your your career in dentistry. You know, sometimes there are lessons that you're able to carry forward from a prior profession.
Nicholas Cook:You know, for me, I was moving from flipping houses into more management of, you know, asset management, investing, things like that for a longer term run versus short term. And, you know, when I was making that transition, I was thinking like, well, you know what? Like, half of this skill set's gonna translate over to the new business, and and I don't have to worry that much. And what I found out, it was only about 10% of my skill set translated over. It was completely different animal, completely different business, clients, opportunities, just the whole thing was different.
Nicholas Cook:How you found deals. You coming from dentistry, are there are there lessons you've learned or you did learn in dentistry that you've been able to apply to the store it business, a self storage business?
Wayde Elliott:Yeah. I would say the biggest lesson that I took from dentistry to developing real estate would be the culture and the core values. So when I was doing dentistry, it was a very light environment. Everybody was laughing. We had fun doing it.
Wayde Elliott:We were crystal clear on our core values, and one of the core values doing dentistry was exceptional customer service, whether it's giving an injection or billing or whatever it was. That's our number one core value in real estate development at Store It. So I think having some clarity around core values and culture and, you know, making it fun. If it's not fun, then nobody wants to show up and it's just it's work. So Yeah.
Wayde Elliott:I've had the philosophy that my work is my play and my play is my work. There's really not a huge differentiation between the two. Like, when I'm traveling to sites, I like doing it and it's fun for me. Where there were days when I was doing dentistry that it was work. Mean, we still had you know, a culture, a fun culture, and Yeah.
Wayde Elliott:There was fun, but I guess I didn't have the freedom like I do now.
Nicholas Cook:Yeah. I mean, very different probably from just a regulation standpoint and also just immediate human impact standpoint. And I imagine, you know, if you're a dentist, I mean, I, you know, I try to stay away from the dentist as much as possible as I'm sure everyone does. But, you know, if someone I have to and I had this kind of experience somewhat recently in the last, like, twelve months because I had to get a filling. Right?
Nicholas Cook:And I to to be fair, it was probably well deserved. So I I didn't blame them for it. But I'd I'd this filling done by this person, and they whatever they did was just it was slightly off. Probably just in such a way that it would be almost difficult to measure. And I, you know, I dealt with it for about three weeks, and then I, finally, gotta go back in because this is, like, not going away.
Nicholas Cook:And, you know, some other doctor came in and just, like, did a little thing, like, filed some stuff down, and then solved the problem basically permanently. And that was, you know, over a year ago. But I will say that I lost a little bit of trust in the first doctor. Right? Yep.
Nicholas Cook:So now, like, if I have another appointment, it's like, I kinda want a different person. Not because I don't think they're maybe good, but it's like, just don't wanna have to deal with that for three weeks. Yep. And so I imagine, you know, trust is a major factor for that profession and, you know, if you're taking investment money, which it sounds like you you do. Yep.
Nicholas Cook:Has that played a role into to how how you kind of approach your business too?
Wayde Elliott:I think so. I have an investor that I just talked to the other day, and, one of the projects we had to pivot a little bit. There were some grant dollars that got moved, and I thought it was a huge deal. But when I called him, told him what we were doing and how we were overcoming it and pivoting, he said, wait, I trust you. I didn't even look at any of the agreements.
Wayde Elliott:I signed everything. I trust you. So I think trust is a really big deal. It's a huge deal. And I think in addition to that, like when I was doing dentistry at every review, I would ask the employees, if this was your business, what would you do differently?
Wayde Elliott:And, you know, if they said I would give myself a $10 raise, I would throw that out. I really valued input from the team that's doing it every day, all day. Like, I'm just a small piece of the big puzzle. And I think with STORE IT, I value the team's input and opinions and what direction to go huge. And I think that's been a part of our success is because everybody takes accountability and ownership, and you know, they're looking for opportunities and solutions, not problems, which is another one of our core values.
Nicholas Cook:Yeah. Well, I love that, and it sounds like you've got a lot of good buy in. I mean, core values is one of those things that people underestimate the power of, and they sometimes ignore. And I think that's largely because a lot of businesses that are large, you know, the ones that are institutions that we all kinda recognize, they've got these core values. And it sometimes feels like they're just words on a wall.
Nicholas Cook:Right? But when you get into businesses that are more local or or have a really strong culture, then you can see those being practiced. And I always love to see people if we're interviewing them for a position to ask us what are our core values. Yeah. Right?
Nicholas Cook:Because we try to interview, you know, through the lens of our core values. We like to hire and reprimand based on that same infrastructure, and it just leads to kind of like a north star. So I I love that you guys are focusing on the core values in your in your culture so much.
Wayde Elliott:Yep. We hire and fire based on the core values. Like, if someone's not a fit, they don't meet those core values, they're gone. In fact, just today, we heard a story of one of our managers at a facility in Central Valley, California drove to one of the other sites that were going to start construction on doing research on the prices of the other facilities, how they were ran, you know, maybe some of their shortcomings. Like he was bought in.
Wayde Elliott:We didn't tell him to go to the other facility that we're gonna start construction. He just did it, and I think that's so critical to get everybody involved, and like he just took it upon himself to do that, and that's, I think that's true core values.
Nicholas Cook:Yeah. I mean, if it's if it becomes part of your DNA through that process, then that that's a huge huge win. One of the questions I have for you, and I've always wondered about this, because I've actually never had a storage facility, which, you know, maybe at some point I will. But I I have not had a storage facility, but you always see TV shows about storage wars and stuff like that. So I imagine you've dealt with people who've abandoned their property before.
Nicholas Cook:What is that process like? I mean, you is it really something where you're finding some treasures in there occasionally? Is it like I mean, maybe you can paint a little picture of like how that process works, and if there's a secondary market for for acquiring those kind of things.
Wayde Elliott:I'm probably not the right person to ask because my stance is I don't wanna sell people's possessions, but we do have that come up, and there's a process, but I don't deal with the process. The management company deals with that process. It's a whole legal, you gotta report to the newspaper and, you know, send letters and certified mail and it's a whole process and I don't know it really well, but it's being done. But we try not to sell people stuff. That being said, there has been a few units where, you know, we get maybe most of it's not worth selling because if someone hasn't paid for six months, it's stuff that they don't care about.
Wayde Elliott:But we have currently, at one of our facilities, we have a motor home that doesn't have a title. She was living in it, so we kicked her out and she signed over the motor home that doesn't have a title or a VIN number or anything. So now we're stuck with this thing that has no value. We gotta tow it off and figure out what to do with it. So
Nicholas Cook:Got it.
Wayde Elliott:My experience is it's not as glamorous as the TV show.
Nicholas Cook:Okay. It's not worth it. I've not even seen the TV show, but I've seen trailers for it. I'm like, wow. This looks dramatic.
Nicholas Cook:And I can imagine, you know, there might be some stuff in there. I'd always dream about somebody leaving or abandoning, like, their their, you know, nineteen sixties whiskey collection because I collect bourbon and it would just be that'd be like a gold mine. People might not might not realize right away what they have, but, so that's good to know. One of the things is, I mean, you've obviously been, you know, in this business for a while now, you know, almost what, fifteen years plus, something like that. Yeah.
Nicholas Cook:You know, have you thought about exploring into other asset classes? Maybe you already have and I just don't know, but have you got into like, oh, maybe we should develop multifamily or maybe we should develop, you know, stuff for storage for boats and things. I mean, like, have you kind of branched out or have you really kinda stayed focused?
Wayde Elliott:Yeah. So what I know to be true is where your focus goes, energy flows, and I've started other businesses from a car wash, junk removal business, moving business, cannabis. I was one of the first licensed producers, farms in Oregon. Oh, wow. And I lost about $850,000 in the cannabis business.
Wayde Elliott:So I try to stay in my lane because now I know that when I get out of the lane, I get a flat tire or go in the ditch or something bad happens. So we're hyper focused on just storage. And that being said, we do some boat and RV storage. So it's all centered around storage. So we stay in our lane, I guess is we don't venture out.
Nicholas Cook:Storage is your expertise. That's fine.
Wayde Elliott:Storage is our expertise.
Nicholas Cook:So, you know, being an expert in in this, I mean, at this point, you've obviously built enough, you know, facilities. You've run them. You've been in this business. You know, if somebody wanted to start, you know, to get into the storage business, you know, what advice would you have from for them in terms of, like, how to enter the business? Would it be like, hey, do what I did, do the development route, or maybe, like, buy one and, you know, try to reposition it and prove maybe the rents you're getting in facility?
Nicholas Cook:Or, like, what what advice would you give someone who's like, hey. I wanna get in a storage business. I have no idea where to get started.
Wayde Elliott:Yeah. That's a great question. I've had a lot of people ask me that same question, and to advise someone to jump in and do a ground up construction where, you know, it's anywhere from 8 to $12,000,000 with a whole bunch of risk. And if you don't have the playbook, if you don't have the expertise and how to do it, I I couldn't recommend that to someone. There are some syndication deals where if you can get in with someone you trust, like you said, put money in and maybe learn the process that way, or buy a small facility.
Wayde Elliott:I know there's some smaller facilities you can buy, you know, maybe it's, you know, 100 units, something like that on a small site. I would either recommend buying a super small facility that's already up and going, that has some cash flow coming in, and learn it a little bit that way, or do a syndication deal where you invest with someone that you trust and can see the process from start to finish and be curious. Ask a lot of questions, whatever, you know, whichever route you go. From my experience, self storage operators are very open and willing to share their experiences and, you know, shortcomings and and wins as well. It's a very great space.
Wayde Elliott:There's not a lot of scarcity. My experience, there's not a lot of, you know, close to the chest. It's it's open.
Nicholas Cook:That's great. Yeah. You know what I think at the of the day too, I've learned just being in business that collaboration. I mean, you can tell somebody how to do something all day long, and so I don't fear sharing information. Mhmm.
Nicholas Cook:The execution is the hard part.
Wayde Elliott:Right? %.
Nicholas Cook:You know what? If I give you all the information and you execute, that's impressive. Like that that's a win. That's what I wanna see. That means the conversation was worthwhile that that time was used well and that someone else is winning.
Nicholas Cook:So I'm I'm glad to hear that's how it is in the storage. I know in my industry, it's very much like that too. But on the brokerage side, less of the sharing, a little bit more close to the chest. At least that's how it's been traditionally. And so, you mentioned California and as being a site that you're looking at or expanding within.
Nicholas Cook:So it sounds like you're in Oregon, California. Have you gone into any other markets?
Wayde Elliott:We've looked at some other markets and they just haven't met our criteria quite yet, but we're certainly open to going outside of Oregon, Washington, California.
Nicholas Cook:Got it. Yeah. Cool. Very cool. Well, we're gonna take a quick commercial break from our sponsor, and then we will be right back.
Nicholas Cook:This show is sponsored by Sleep Sound Property Management, one of Portland's largest and top rated management companies that specializes in multifamily and residential real estate. They can help you acquire, operate, protect, and sell or exchange your properties. If you want to invest in real estate, give them a call or visit them online at sleepsoundpm.com. That's sleepsoundpm.com. Okay.
Nicholas Cook:So we're back from our commercial break here. And, you know, one of the things I wanna talk to you about because this seems to be, you know, the highlight or headline, I might say, of every industry right now. In some industries, maybe maybe it's not affecting them. But everyone's talking about, you know, tech platforms and AI and things like that. What is going on in the storage space?
Nicholas Cook:Has that been you know, is that starting to see momentum from these types of tools? Are people talking about how AI is gonna bring, you know, efficiency to that business? Like, what what's going on in that conversation?
Wayde Elliott:We're starting to use some AI in our research and identifying sites. It's it's really early coming in, but I would say technology is starting to get a foothold in self storage. Like, our sites now have cameras that are monitored twenty four hours a day remote, and they have speakers. So if someone comes on-site, someone watching the cameras can say, hey, red sweatshirt, the police have been called, you need to leave right now. So I think some things like that and some access control things that we have are starting to infiltrate into the storage space, which is great.
Wayde Elliott:We love, you know, keeping up with the times, but I don't think the AI is infiltrated as much as it has in other industries.
Nicholas Cook:Do you think there's opportunity there, or do you think it's not hit that yet because there's a reason it hasn't, or is it just kind of a, you know, blue ocean still?
Wayde Elliott:I mean, there is opportunity. I'm always open to learning better ways of doing things, and, you know, we always one of our core values, look for opportunities and solutions, not problems. So if there's a better way to do something and it involves AI or a different technology, we always research that and we always wanna explore that. But we don't want to be the first in and spend a whole bunch of money on something. So we're kind of waiting to see how it plays out, and we go to the self storage convention every year to kind of see the new technologies and what's happening and get feedback from folks that are actually using it and then implement it.
Nicholas Cook:Got it. And, you touched on conventions, which I'm a huge proponent of. I think there's nothing that's probably moved the needle in terms of my learning curve more than going to conferences for things in my industry because you're surrounded by people that know your world. They're engaged because they paid to be there. And you can't replace just the human face to face connection.
Nicholas Cook:You just can't. Yep. And within that, you find companies that you, you know, admire and you aspire to and you kinda set set as like a benchmark. Are there companies or operations that you've seen that kind of just kinda blow your socks off and you're like, hey, we're trying to aspire to that and, you know, how is that influencing your vision at STOREP moving forward?
Wayde Elliott:Yeah. Actually, that makes me think about something. So, for your listeners that are interested in self storage space Mhmm. 100% go to the convention and just kind of see what's out there. Talk to some other self storage operators.
Wayde Elliott:That's the best place to get a whole bunch of operators in the room. Mhmm. That would be probably my first piece of advice to your listeners to if they're interested, go to a self storage convention. There's lots of conventions all over the country. Go to that.
Wayde Elliott:And I would say, as far as operators that we look up to, I mean, there's some 800 pound gorillas. There's some REITs, extra space, public storage, and I think when I go to some of those facilities, they do some things that we don't do. I don't feel like their core values are really integrated. Maybe the managers don't give an F and, you know, they're not as customer service centric as we
Nicholas Cook:are. Disconnected.
Wayde Elliott:It's more about, you know, the stock price and profit and loss, and they do some things that, some bait and switch where they lower the rates, and then two months later, they raise them. So we try to stay away from practices like that, and I think at first I was kind of enamored with the 800 pound gorilla, but as I dug into it a little bit more, I think being a smaller operator and being a little bit more nimble and really being able to live, breathe, sleep, our core values has helped us a bunch. Got it. Got it. I don't know if that answers your question or not, but
Nicholas Cook:No. It does. I mean, I'm I'm always kinda curious, you know, it's everyone kinda knows who the big operators are, but I you know, it's a double edged sword. Right? Because I think, you know, even if they have a great corporate leadership, it's hard to carry a message forward down a chain when you've got that many people.
Nicholas Cook:And, you know, that's one of the benefits of being a smaller operator. You can be more responsive. You can be more nimble. You can take on opportunities that, you know, deal sizes that may not work from them. You know, like, a big thing in real estate investing in our market or, like, our industry and specifically is, you know, we can go into markets that institutional investors won't go into.
Wayde Elliott:100%.
Nicholas Cook:Right? And so that's less competition, but it does require, you know, more intimate knowledge of those areas because you don't have as much data to work with. You're not able to pull reports and find, you know, all the comps and all the things that you might wanna see, especially, like, from a socioeconomic and demographic standpoint. So that's kinda how you outcompete is is you just have really strong market local market knowledge.
Wayde Elliott:Yep. 100. I would say we operate in markets where most of the REITs aren't in. Some of the markets we're in, the REITs are in.
Nicholas Cook:Mhmm.
Wayde Elliott:But most of them, it's just, you know, mom and pop operators that we're able to allow a we allow some sophistication to the facilities that just bring it a little bit above what's happening in those markets. So that's our strategic advantage.
Nicholas Cook:Got it. So one of the things that, is true in real estate, I mean, we've got, you know, heads and beds. Right? We've got habitability issues. We've got all kinds of maintenance things you could ever imagine and not imagine happening.
Nicholas Cook:What is the maintenance side of of storage? You know, like, you guys got some walls and roofs and I realize summer maybe temperature controlled and things like that, especially if you get into things like storing wine collections, that's maybe a different story. But what kind of maintenance stuff are you dealing with or capital, you know, expenditures for for your facilities?
Wayde Elliott:It's very low. We have concrete, steel, and garage doors. We don't have to deal with toilets and termites and well, we have tenants, but the laws are a little different for self storage. Like if someone doesn't pay, the gate gets locked, right? Where I think in your industry, you have to hold their hand and you're married
Nicholas Cook:with unbelievable. It's it's it's unbelievable. And I will say, you know, Oregon is semi reasonable compared to some other states, but they've slowly made it more and more difficult. There are some rules that came out during COVID that they're like, these are emergency measures. They'll go away after COVID.
Nicholas Cook:And guess what? They made them permanent. Right? I mean, it's just like, it's rare that they implement a rule then roll it back. I mean, it just, you know and it's it's difficult.
Nicholas Cook:And, you know, to for some re you know, in some cases, that's valid because you are dealing with somebody's place where they live. That's where their family is. So I understand to some degree, but also at the same time, if you want people to create housing supply, then you've got to make recovering the assets easier and less expensive because that adds into the risk. Right? And then that reduces the, you know, demand for, you know, investment in that area or not necessarily the demand, but the willingness of people to go in and and wanna invest in in that area.
Nicholas Cook:And, unfortunately, that negatively affects the supply. And we're seeing that all over major metropolitan cities, certainly on the West Coast, is it's not a lack of potentially space or expertise or Demand.
Wayde Elliott:There's demand for it.
Nicholas Cook:Demand, absolutely. I mean, that's the driver at the end of the day. Right? And so, you know, that that that those types of regulations have made things really complicated. So it sounds like in self storage, you've got rules, but maybe not as Right.
Nicholas Cook:As complex.
Wayde Elliott:And I'm curious. I just read this yesterday. Maybe you could speak to it, that the multifamily permits are a third of what they were three years ago, I think. Like, the amount of permits is, like, a third of what it was or some crazy number like that. Like, it's
Nicholas Cook:Yeah.
Wayde Elliott:It's like straight down.
Nicholas Cook:Was this local, like, regional Yeah. Stat or is it national? Yeah. Portland. That's absolutely true.
Nicholas Cook:One of the probably the biggest things that affected that aside from, you know or I should say the thing that affected it the most from a regulatory standpoint was, we introduced something called inclusionary zoning. And, basically, it says that if you're gonna build more than 20 units, then 20% of those units have to be affordable. Right? And so the challenge with that I mean, it sounds great on paper. Like, oh, you're gonna make some units that are affordable.
Nicholas Cook:The challenge with that is is that when you do that, those, units that are deemed affordable means the rents are lower. Right? So that gap has to be made up by all the other units, which means everyone's rent in the entire building has to be higher, and those buildings just don't pencil. Yep. Especially when you layer on the interest rate environment.
Nicholas Cook:And so we've seen it fall off a cliff. And the thing that's frustrating is that we were warning the legislature and the city about this for years before they implemented these rules. Then they implemented these rules. We told them, hey. These are the canary in the coal mine, and they used every excuse in the book about why that's not really the case, and this is just a you know, what happened was it sped up the permit filings, and and and, of course, there's gonna be a lull for a period of time.
Nicholas Cook:And, like, while that might be true, like, you have to talk to the people who are actually creating the supply. Like, they're the ones who have the narrative and have the belief system and can tell you, and for them to just ignore it, because they felt like we had such, you know, popularity within the city and we're they were so confident about the you know, in migration patterns, you know, have now seen the opposite happen. And it's really really sad because and I've said this probably before, but, you know, if you have a building now on a site and you put 19 units there because now those can all be market rate, even though that building could have supported 50 units or 40 units, you've pretty much permanently created a problem with the supply because that building's gonna be there for fifty to a hundred years.
Wayde Elliott:Yep. Right? Yep.
Nicholas Cook:So that is not I mean, it's really going against in real estate what we call is highest and best use. Right? And so there's a lot of other ways for them to have gone about approaching this issue. But I think with anything, especially when you get politics involved, it's like ideology drives decisions, and that may not be in the best interest of of the total population. And so, that type of thing has happened all over the country, not just in Portland.
Nicholas Cook:But Portland's certainly been, you know, a victim of that.
Wayde Elliott:Yeah. Well, I'm grateful I don't have to deal with that. Yeah. We put as much on the highest best use. We put as many storage units as we can.
Nicholas Cook:Yeah. Well, and, you know, the only silver lining that we tell our clients about is like, you know, the government's killing your competition for you, and so essentially, if you've got a building, you're gonna have lower vacancy periods, or you're gonna have, higher occupancy, shorter vacancy periods, you're gonna be able to command higher rent Yep. Increases Yep. Because essentially, they've just killed off your supply, which, you know, for that individual owner, you know, good for them, but that doesn't benefit the entire market. Yep.
Nicholas Cook:So one of one of the questions that I have because and again, I'm relating this to to my experience, the background that I've got. You know, we live and die by our lease agreement. Right? That is one of the things that expertise and experience, like, gives you is you know what needs to be in the rental agreement. How does that work in self storage?
Nicholas Cook:I mean, is this something, like, if I wanted to go and sign up for STORET, I could just go online and sign a contract and be on my way, or do you guys go over the agreement with people? Do you have certain provisions you found that are really critical to have to protect you and your investors?
Wayde Elliott:Yeah. We have the managers go over the rental agreement just so that everybody is on the same page. Some of the big ones are, you know, certain hours you can't come in at midnight. It's just not safe for anybody. And then, you know, the year of, like, we don't want someone bringing in a motor home that's dilapidated and gonna be our problem Sure.
Wayde Elliott:If they quit paying and we gotta deal with it. So we they do go over it, and it's it's a standardized agreement. I mean, you can get them online, and we've fine tuned ours with attorneys and really dialed it in, and I think out of the I don't know. We've developed 2,500 units, and I think we've never had a challenge. Like, never gone to court or had it be an issue, and in the court
Nicholas Cook:system change businesses. Oh my yeah. That is that's wild. But that's great. I mean, it sounds like you got a good operation.
Nicholas Cook:You guys do a good job vetting, you know, the, like, the tenants. Do you call them tenants? Yeah. Okay. I wasn't sure if the vernacular is the same.
Nicholas Cook:So no. That that's awesome. That's really cool. You know, one of the things that we do too is we we walk the units. We check on them twice a year just because we wanna make sure that there's nothing going on.
Nicholas Cook:Sometimes you've got people who are reluctant to report things because they're worried or they believe that, you know, if I report maintenance issues, my rent's gonna go up or they're gonna be upset with me. It's obviously not how we feel. We wanna protect the asset. But in storage, you know, they're not living in there. You've just got kind of a box at the end of the day, and then boxes inside of the box is kind of.
Nicholas Cook:Do you guys have a need to look at the units, or how do how do you guys make sure that, you know, there's no, like, leaks happening and things like that?
Wayde Elliott:Well, if there's a leak, they tell us about that, but that's more of an exception than a rule. Like, that doesn't happen. Often, it has happened, but it doesn't happen, and if that happens, we deal with it very quickly. Mhmm. And as far as looking at the units, we don't do that.
Wayde Elliott:What we do do is monitor the cameras. We each facility probably has between fifty and seventy five cameras throughout the Okay. So the managers monitor. So if someone comes in every day and spends all day in their unit, that raises some red flags, and they'll look at that. We have had one facility where someone was using that as a in and out kind of there was a mattress in there, and she would bring clients in, and the manager quickly observed that and figured that out and put a stop to But there's a few exceptions where crazy things like that happen, but the managers are so good.
Wayde Elliott:They they identify quickly and then make a change, and we get them out. Awesome.
Nicholas Cook:Yeah. Well, what are some of the biggest challenges you'd say in owning storage? I mean, obviously, if it was easy, everyone would do it. So from your vantage point, what would you say are some of the things that just operationally are the biggest biggest challenges of of owning storage? Or maybe it's on the development side, but what what would you, you know, say for you is the things that maybe keep you up at night or you just have a lot of friction?
Wayde Elliott:Yeah. That's a great question. I just spent a day in an office with a business coach, and what I believe to be the biggest challenge or problem was access to capital to develop these because it's such a big number.
Nicholas Cook:Sure.
Wayde Elliott:And he goes, that's a resource. He says, you don't have a resource problem. You have resourcefulness problem, and that just hit me right in the face, and I'm like, ah, we don't know what we don't know. So he's like, capital isn't your challenge. If it's a good deal, people are gonna invest in it, and it's gonna be successful.
Wayde Elliott:So Yeah. It's a resourcefulness problem, not a resource problem. And when he told me that, I was like, god, I don't know that I really have any resource problems. It's a resourcefulness problem. So it's my own mindset, really.
Nicholas Cook:Yeah. So Makes sense. I mean, it's something that you've gotta systemize like any other aspect of the business. We're learning that too in the in the process of the things that we've been doing. So no.
Nicholas Cook:That that that's a good good insight and moment there. You know, if so I'm gonna transition away from, this. One of things that we like to do in in our in our podcast is get to know a little bit more about, you know, the guests. And so at the end, we have three questions just to kinda learn a little bit more about Wade. Right?
Wayde Elliott:I'm excited.
Nicholas Cook:So the first question I have is, you know, if you could have dinner with anybody dead or alive, who would it be and why?
Wayde Elliott:Good one. I think it would be Napoleon Hill. Mhmm. Because his book, Think and Grow Rich, has had such an impact on my life. You know, one thing that I read every day in my visualization is what we envision in detail with emotion on a daily basis is what shows up in our life.
Nicholas Cook:Mhmm.
Wayde Elliott:So that emotion piece and envisioning that, and I I got that from Think and Grow Rich, Napoleon Hill. So I think I would really like to sit down with him. There's so many people, but if I could pick one, it would probably be Napoleon Hill.
Nicholas Cook:Yeah. That's a great answer, and that's that's an incredible book and one of the things that's definitely probably in my top five because I think for me, it was also a foundational book that I read early on. Yep. And it was recommended to me by somebody who I would say was definitely like, in some ways like a mentor. They definitely like pointed me in the right direction on a few different things and I think that book was definitely one of them.
Nicholas Cook:So that's great. Yeah. Another one is is I've I've noticed that, you know, you like to get out and about, you like to travel, you like to do cool stuff. If you could live anywhere in the world, but it had to be for a year, where would you live and why? That
Wayde Elliott:is a good one. I've fallen in love with Croatia.
Nicholas Cook:Mhmm.
Wayde Elliott:I've taken a few trips to Croatia, and I think that the lifestyle, the climate, the people, how beautiful it is, It might be Croatia for a year.
Nicholas Cook:Cool. Yeah. That's on my list. I haven't been there yet. It's definitely on the list to go.
Nicholas Cook:I think we're probably gonna try to go to Vietnam this fall, probably October, November. But then probably after that, I I think Croatia would would probably be next on that list. It looks beautiful.
Wayde Elliott:Yeah. It's spectacular. Very cool.
Nicholas Cook:And then other one's pretty simple question. You know, if you had to choose whiskey or wine, which one would it be?
Wayde Elliott:Oh, that's a tough one. I like them both so much. I would probably say wine just because there's such a diversity and there's so many opportunities, especially in the Willamette Valley Mhmm. To go to all the vineyards and do tasting, and there's such a complexity with all of the different varieties and grapes and how it's, you know, barreled or stainless or oak or there's just so much to it, and it's so interesting to me. It would probably be wine.
Wayde Elliott:Yeah. But that being said, whiskey's a very, very close second.
Nicholas Cook:Yeah. Makes sense. Well, that's great. I'm I'm a big fan of both, and would you say that you are a big into Pinot Noirs if you're talking about the Willamette Valley, or is it more like white wine chardonnays, or do you have a kind of a
Wayde Elliott:I would say red wine in general.
Nicholas Cook:Red wine.
Wayde Elliott:I mean, I love Pinots, but more red wine than white wine.
Nicholas Cook:Got it. Okay. Cool. Well, Wade, those are all the questions I have. It's been an absolute pleasure to have you here on the podcast and to learn more about your store business and what you've built and the culture you're building and kinda what your vision is for the future.
Nicholas Cook:So thank you so much for for being on this episode, and we're excited to share this with with our listeners.
Wayde Elliott:Well, you for having me. I appreciate it.
Nicholas Cook:And that concludes today's episode of retire on rentals. But we do have a quick favor to ask before you jump off. If you haven't already, please go ahead and like and subscribe. More engagement means better content and more excellent guests. And we look forward to joining you on your real estate journey.
Nicholas Cook:Now remember, stay focused, stay driven, so you can retire on rentals.