The Self-Storage Strategy That Thrives in Any Economy with Ryan Gibson & Tait Duryea

Welcome to the Smart Real Estate Coach Podcast, your source for actionable, real-life, practical investing advice. Each week we help you make a quantum leap somewhere in your business, your finances, and/or your life. Subscribe, leave a rating and review, and learn more at smartrealestatecoachpodcast.com. All right, welcome to the Smart Real Estate Coach Podcast where we cut through Through the noise and show you how to actually get deals done in today's market. Very important. I'm Chris Prefontaine, and if you're serious about creating income and wealth through real estate, you're in the right place. Today we have a treat, guys. We are going to start literally today and run into next week, a 2-part series, and we're going to be chatting with Ryan Gibson and Tate Duryea. And they, it's interesting, they both have lanes they run in. So that's the reason for the 2-part series. And then they meet in the middle. They have a podcast called Passive Income Pilots. We've met up a few times. I've been on their show and we've actually worked with a lot of their pilots. They're in their tribe, so to speak. They've been in throughout training because a lot of their pilots like you, if you're in a W-2, like pieces of what they do. Like in their case, they want to fly. They just don't want to be flying to someone else's schedule. And you're going to hear from Ryan, for example, when I chat with him in just a few minutes here, what he does with that since he now has removed himself entirely from the commercial world of flying and gets to fly around in his own plane with his own family. Pretty cool stuff. And I'm going to let them explain to you what lanes they run in and stay tuned for next week when we jump on for part 2 of 2. All right, guys, with that as a little backdrop, welcome to the show. Good to see you guys again.

Great to see you, Chris.

Thanks for having us on.

Yeah, thanks, Chris.

Yeah, you bet. Let me cue this up for everybody though, for the smart listeners. We are going to do a really cool 2-part series here. So you're going to hear a little bit more than I just did on the background of Ryan and Tavia. And then you're going to hear me dig in a little bit deeper with Ryan. And then next week we're going to have Tavia's partner back on. And here we go. We're going to have a nice little 2-part series for you guys. So you're going to be loaded up instead of skipping some info. So with that as a backdrop, guys, let's go this. Let's kind of give them a look behind the green curtain. who you are and how you landed here, and then we'll split off and dive in deeper.

Well, I think 2 pilots in a room or at a real estate conference are going to find each other and let each other know that they're pilots. And so about 7 or 8 years ago, I guess 8 years ago now, Tate and I were doing real estate and we were both at a real estate conference and we bumped into each other and just really hit it off. And Tate was a Hawaiian Airlines captain at the time and still is a now, I guess, Alaska pilot as they merge, but will always be a Hawaiian pilot in my mind. Yeah. And I had a career as an airline pilot as well for 17 years flying for Delta, Alaska. And so anyway, at the time I was operating real estate, investing in a lot of real estate things, and Tate and I bumped into each other. And we just basically said, you know, there's a lot of pilots out there that don't know anything about investing and they don't know anything about what we're doing in this private alternative space. And so I think we went to dinner that night, Tate, and we sat down and we said we should write a book together, I think was the first thought. But what turned out to be, let's write a, let's do a podcast together and let's bring on all of the guests that we've met over the last decade. that know a ton of stuff about real estate to include you, Chris. We brought you on our show, what, about a year ago or so?

Yeah.

And so, and it's just taken off, no pun intended. And we have tens of thousands of listeners now and they're airline pilots, right? And they're airline pilots that want to diversify their portfolio away from their retirement account, their traditional retirement accounts. So that's kind of how me and Tate met. Tate's built an awesome fund and I know we're going to have a 2-part series on that and all the things that he invests in. But then Tate's also invested in my deals. I'm an operator, so I do like the full vertical integration of running a team, 200 people. We have about a billion in self-storage now, but we're just so excited to bring information and education to pilots. So Tate, what did I miss on that?

You guys, just let me interject between you guys. Tate, sorry. So I was just telling Tate off air, Ryan, it's cool because in the last few, we do workshops right here at the office now. We call 'em Deal Room and Deal Lab where we actually do deals. But the last 2 had people from your audience, pilots sitting in the row, which was really cool because they're like, yeah, I love flying. It's my passion, but I want to fly where and when I want. I don't want to be at the whim of someone else. And that's why they're with us. So that's pretty cool. Take ahead, buddy.

Well, that's the key, you know, I mean, freedom, right? I mean, pilots have location freedom. You know, we get to fly everywhere for, for basically nothing anytime we want, which is wonderful. But, um, you know, that becomes less There's less utility in that. Once you get a little older, you have a family, you don't necessarily want to be traveling on your off days. So really it comes down to financial freedom, right? Being able, and time freedom, being able to do what you want when you want. And I think that that's why anybody gets into real estate is to build passive income streams, to build wealth and to live a life that's more on their terms. So yeah, it's been an absolute blast building our our education platform with Ryan. We started this podcast, what, 3 and a half years ago? It's called Passive Income Pilots and it sits in between our 2 companies. You know, he and I, you know, Ryan runs just a fantastic vertically integrated self-storage firm. I run a more asset class agnostic fund where we have, you know, 8 or 9 different opportunities per year that are in just different asset classes. We're a little bit more nimble, a little bit more agnostic. So we'll get into that next week. But with that, I'm going to turn it over to Ryan since this is a 2-part and you'll hear from See you next week. So cheers, guys.

All right, now get out of here. I'll see you next week.

All right, see ya.

All right, take. See you, Tate.

You know, it doesn't matter if you're brand new to real estate or if you've been doing this for several years or a whole bunch of years. I learned the hard way back during the crash that doing creative deals is much better. It's a much better path in real estate in general than, let's call it the old way, getting paid once using banks, signing personally. 3 paydays, getting paid 3 times on a deal, guys. It's better 3 ways, not 1. money now, money over time, and money long-term. And I don't care if you're in an up, down, sideways market, it doesn't matter. You can and should operate with the utmost confidence. There's literally nothing I love more than helping people create systems and simple systems and processes to become massively successful with our 3 Payday System. And doing so in literally any market and doing it geographically, literally anywhere. So, if you've been learning and learning and listening and studying and not taking action, I'm telling you after going through it myself, It's costing you tens of thousands, if not hundreds of thousands of dollars, by not taking action on the 3 paydays the way you should be getting paid. Many of the people that were brand new, just like you, that joined our community have fast-tracked their startup. Now, I mean, wouldn't that be ideal if you said, okay, should I go fast or slow? Should I take action now or later? It's costing you too much money to wait. Each one of you are at a point in your life, I'm sure, where you want things to be easier, you want things to be better for you and your family. You probably realize that you not only want more, but you deserve more in this life. So, to be able to give your family everything they want, build a legacy for you personally too, and to have time freedom to start enjoying life, frankly, whatever else you're seeking. And for some of you, now's the time, for example, to just focus on security. Maybe it's building a big solid bank account for retirement. We take these things super, super seriously. And it's my life's biggest reward to help you achieve them. I want to give you a free discovery session with our team. It's free. It's 15 or 20 minutes. You have zero to lose and everything to gain. And to understand how you might fit into the 3 Payday System that we've done now in over 80 markets as of this filming, go to smartrealestatecoachpodcast.com/discovery for a free call with our team.

smartrealestatecoachpodcast.com/discovery.

Because it's not whether or not you can do it or whether or not you fit. You can do it. It's whether or not you'll take action and do what it takes. And we can guide you through that process. smartrealestatecoachpodcast.com/discovery. We'll see you soon. All right, Ryan. So, I was telling you earlier, you've got a mix of smart listeners, right? You got corporate, I want to get out. You got People in our community, of course, and then you've got people that are maybe wholesaling and flipping. So I'd love to chat a little bit about, you're heavy into self-storage, which I love that class. So you want to talk a little bit about that and how you see that fitting for some of the different advertisers I just mentioned?

Yeah, so I think it all comes down to like, why? Why did we pick self-storage? Why did we go and raise our focus into it? Over a decade ago, right? And why do we own $1 billion of this stuff? And I think it really came for us, it came on our journey of, you know, I was going out and doing single-family homes and flips and all that. And that was great. It made great money, great ROI. But what I found was that there was a lot of people who wanted to be in real estate that didn't want the active participation, right? They didn't want to go and do all the work and find the deals and finance it and put themselves on the hook. And that's fine. There's a segment of people for that, right? And Chris, you know, a lot of people who want to be But for me, I wanted to provide real estate investment opportunities at scale to people like airline pilots that make half a million dollars a year and they want exposure to real estate, but they don't want to do all the work. And so what I realized when I was doing all the work myself, I was getting a really good ROI on my investment, but not a really good ROI on my life. And so I wanted to provide the ROI on life to pilots so that they could focus on going flying another trip and making really great income. And so what it, so where, why I landed on self-storage was because I saw the opportunity of just how many Americans use it. When you think about it, 1 in every 3 Americans has used a self-storage unit. Now, if you compare that to how many people have gone and flown on an airplane, 1 in 5 Americans has flown on an airplane. So there's actually more people who have flown, less people have flown on an airplane than they actually have used a self-storage unit.

That's interesting.

Yeah. So, you know, Ed Bastian was just interviewed and said, you know, 1 in 5 Americans have been on an airplane. And so, you know, when you look at how many people use self-storage, it's a commonplace thing. And what I really like about it is that it doesn't, it happens no matter what's going on in the economy, right? When we see recessions or COVID or the GFC or the things that have happened in the past, self-storage usually upticks in occupancy a little bit because people need the self-storage space when they're going through some type of life disruption. And I love that, you know, people are, it's the 5 Ds, right? Death, displacement, downsizing, divorce, and diapers, right? Those are the 5 Ds that people use self-storage for. And those things don't care what the economy is doing. But you know, you hear all these really good things and you think, okay, well, self-storage is so great. I'm going to go dive head into it. But then you kind of realize it's, you know, those mechanics, that only work on Mustangs or only work on Corvettes or only work on the classic car. And it's like, you get a classic car, that's the mechanic you're taking the car to, right? You're not going to Grease Monkey, right? They're not going to know how to work on your '67 Mustang. That's like self-storage. Self-storage is not hard. It's not, you know, out of this world, but it's just unique. And I kind of view, you know, our operations and what we do, because we do the whole thing where we have a property management, we have a construction company, we do the whole vertical in our operation. It's like being a specialized mechanic. It's not hard. It's not a hard asset class, but you really gotta know the ins and outs of what, how to raise rents, who to raise rents on, the timing, where they're located, where to find these deals and where to actually, where you can actually have success. And it's becoming even more incrementally important because It's become one of the 5 main asset classes because institutions are now putting lots of money in it. So you're only getting like incremental improvements now, right? Because there's a lot of money in the space and it's hard to compete with the big money, right? So yeah, so it's been a really fun journey and we just feel so grateful that we have over 7.5 million square feet of this stuff now and are really one of the big players in the space. We're the 29th largest operator now of self-storage and But I don't want to discourage people from getting into it. I'm, you know, 60% of these properties are mom-and-pop owned and they, there's an opportunity. And I think even with AI, we've seen the efficiencies grow tremendously with AI. We've, you know, AI'd our entire call center. We've AI'd the lien process, the auction process in self-storage. So there's just a world of opportunity. And then there's a lot of buyers that are hungry for the assets, especially the ones that are stabilized in really nice markets.

So talk about a couple things you saw me write in notes on the big money side. So for the listener, and I sincerely want to know what your thoughts are on this, I think I know what are the smaller mom-and-pop, the sort of the targets if they're just looking for their first type of deal. Because in our world, what we teach, we teach buying things without banks.

There's a ton of these.

I know because I have one student that just does these. that you can do owner financing with. So is it the mom and pop so they're not competing with the big money? And is there a size?

Yeah. So I would say it's, if you're going to compete against the big money, you're going to buy the 100,000 square footers in core markets, Seattle, Bellevue. We just bid on one in Bellevue that was like $55 million. You're going to go up against all the big boys right on that one. But when you go against the smaller markets, when you're in the, 20,000 square foot, 10,000 square foot, 5,000 square foot self-storage facilities. Big boys aren't coming after those. They're never buying those properties, right? And the sellers are going to be a little bit more aggressive about providing seller financing, right? So as you scale deal quality down to a smaller deal, you're going to have more opportunities for seller financing. And I'll give you a great example. Our very first deal that we did in 2015, 2016 in self-storage, It was a 14,000 square foot property in Colorado, kind of a suburb. And the owner gave us seller financing. The whole thing? Not the whole thing. We had to put down, I think he wanted $500 grand and then he gave us a seller carried back note of $1.1 million. And what was really cool, the whole thing about seller financing is this guy didn't want us to pay off that note, right? He wants to die with the note because he doesn't want to pay the capital gains, right? So he actually, when we sold that property, we went to the seller and said, hey, would you uncollateralize this loan and just give us this loan as a, you know, to put on another property? And he said, sure. So, you know, because we had built up trust, right? 4 years, 5 years of making regular payments and having constant communication with him. So he uncollateralized the note. We moved it to something else. So that was— That's a great point.

If I could stop you just for everybody to hear that, because we do that with single families. We do that with any asset class because they'll, they go, well, how do you convince? You don't convince anything. This guy wanted it, right? This is key.

He wanted it. He, that's exactly it, Chris. We were sending him letters, right? We were, you know, just like everybody does, you know, tens of thousands of letters. And he got our letter. He said, hey, you guys are disabled veteran-owned business. We want to do, I want to do business with a vet. I was in the special forces. We said, great. That did the thing. So we sat down with him and he said, hey, one condition of this deal is you got to take my seller carryback note. And we just asked him, we said, hey, well, what, you know, what interest rate do you want?

He said, I don't care.

I need 7 grand a month. Right. So we went back to our amortization interest rate calculator and we did what was really good for us that arrived at $7K.

Great seller.

There you go. Yeah. Great seller. Yeah, exactly. And yeah, so we syndicated the half a million dollars and then we exited that deal really well. I think we ended up getting our investors a 25 or 30% annual return, something like that. And carry the note somewhere else. I think we still have that note. You know, it's been hammered. It's funny. I mean, we, you know, we still have that note in our portfolio somewhere. I can't remember what property it's on or whatever, but, you know, it's a great tool. And like I said, I mean, you aligning what the motivation of the seller is key to getting what you want, right? Because you're kind of providing a service to that person.

How did you do, let's finish that deal with the syndicated half a million, I think you said. What were the rough terms on that?

Yeah, that was 11 years ago almost, but I would say typically we're going to give some kind of preferred return, so like maybe an 8% pref, and then we're going to split maybe 70/30 after that, or maybe even 50/50. I can't remember what exactly what it was, meaning the investors are going to get the first 8%. of whatever the cash flow and sale proceeds are on a per day or per annual basis. And then after that, we share the upside with the investors once they've kind of been paid a certain amount of return, right? They get paid first, we get paid second.

So you're dispersing to them yearly? Did I hear that?

We do monthly distributions. So on all your— okay. Yeah. And all of our deals, if you invest in one of our projects, $50K usually are a minimum or $100K, You can participate fully, you get the K-1 and the depreciation and all that, and then you get monthly distributions and then you get the benefit of the sale when we sell the property.

Got it. Got it. Love it. I'm going to actually peel you back now to, because are you flying today?

I fly, I do. I'm living the dream. I have a Cessna 185 Skywagon backcountry airplane. That, um, I take my kids and my family and my wife camping. Um, so we, we go down this Memorial Day weekend. We're actually going down to this place in southern Idaho called the 45 Ranch, which is a grass runway along a, a creek with, with bass and trout fishing. And we're at the cabin for the weekend and you fly into this, you have to fly down this like really gorgeous canyon to get to the, to the ranch. And, um, that's the flying I love to do. You know, I, um, yeah, I, Took a step back from the airlines about 4 years ago because my business is— But yeah, that's where it's going.

That's awesome.

Okay. Yeah. So I just fly for fun. Yeah.

So, okay. So talk to the, talk to the, um, I didn't know how long, long ago, but I thought that's where you were off of that train. So talk to the, uh, the W-2, you know, there's some people I've talked to recently, Ryan, that say things like this, like, hey, I'm making half a million, I'm making $400 grand. I want them to give me a severance package. I want to leave. Like, Talk to that person about making that jump because I don't for the life of me understand why, especially them, they don't get out of it. But even the person that's only making whatever, I don't want to belittle anyone, but that, you know, and they're afraid to talk to them because you've changed your whole lifestyle.

Yeah. So first of all, that fear is real and I had the same fear of doing it. So I wasn't, I mean, you know, I'm going to speak to 2 different people if you don't mind. I'm going to put my airline pilot hat on for a second. You're an airline pilot, you've trained, you've been in the military, you finally got that major airline pilot job. And, um, it, you, and we all know as airline pilots, you can't, you can't just leave that and come back to it. So leaving it and, and coming back to it is very difficult cuz you have to start over the seniority and all that stuff. Right. And so I, I kept both, right. Because, you know, you know, to that listener, I would say, you know, you know, you know the contract really well. You can, you can work your schedule in a way that allows you to do both. Why not? What's so bad about going and flying, cranking and banking and flying a jet every once in a while? It's not a big deal. Go fly a couple trips. And the amount of money you make for the time that you spend on that flying is great. And the less that you do it, the more you kind of like it, right? Because I mean, if you do it every week and it's kind of a grind for 30, 40 years, you don't like it as much. You start flying a little bit less and you start to enjoy it more. And then you can be very intentional about your layovers and how you spend them, exercise, sleep, Work on your business and you kind of get dialed in and it's okay. You know, for me, you know, it just, it got to be a little bit too much because, you know, I have 200 employees, I've got properties all over the country. Like I'm running this machine, right? And so for me it was a little bit different, but that, I didn't get there for 8 or 9 years. I was doing that while I was in my, I was organizing my schedule. And I'll be honest with you, that was a grind, right? Building a big business with a grind, doing a couple flips or some projects on the side. Might be a grind for some people. Now that's, so I actually think the airline gig is okay to hang onto for a long time. I, you know, I'm actually an advocate of that. Now, if you're working a job that pays really well, that you got to go, you know, you're in the office from 8 to 5 and you hate it and you're tired of it, you know, and it's soul sucking and you're not enjoying it and you have no flexibility to start a business on the side. Well, then, you know, you do have to grind a little bit, right? You have to work the 80 hours a week. You have to do the 40, you know, when everybody else goes home and does nothing and you're working with urgency to get out of that situation. So I would say there's 2 lines of thought there, but I would say that, you know, the airline gig is pretty good. I would probably maybe keep doing that unless you have some big aspiration to start some multifaceted, multi-entity corporation that's going to, you know, that's going to consume, you know, your kind of day-to-day, right? So I hope that was helpful. I mean, I, and I know some guys who just are getting started in their career and they have this good job that maybe is $150K or something or $200K. That's great. And they just say, screw it. And they quit and they go all in on this stuff. And I, you know, maybe my 25-year-old self with no kids, no wife, no family, no situation, I probably would've done that if I would've known better. Right. I didn't know any better. I didn't know about this. I was just focused on being this airline pilot. So I'd say, you know, map the journey to what makes sense for you. I wouldn't say that just because that guy dove head in means that you're set up for that. So I'd say it's all situational, but you have to be intentional about what you're doing and just check in with yourself like, hey, is this what I really, does this feel good? You know, when I'm doing this, is this feeling good or am I happier over here? You know, so just kind of right-size that every day.

And what do you think? I'll leave one more piece of advice in that and then we'll queue up what we're doing next week and anything else you want to add. What do you think about them also, like if they're a pilot, they reach out to someone like you, if they're in this, in other words, reach out to someone who already did it, wouldn't you think? I don't know if you had to do that, but wouldn't you think that would help anyone?

I don't, I didn't know anybody in my shoes who was an airline pilot who built a huge company that, that was debating against leaving or staying. I, I had to figure that out on my own. I had coaches and all kinds of people helping me, mentors, but they, they were never in my shoes. They didn't really understand every little thing. Right. Of course, reach out to me. I'd love to share perspective and listen to you and listen to what your situations like and give you some words of encouragement, right? I've even encouraged people to become pilots and then do the business thing, right? Get that ink, get that. Because there's something about me having a 20-year career of being successful in something. And that's a huge confidence builder to go into business with. Like, hey, I've already proven myself, right? I don't have anything to prove to anybody. Like I've already done, I've already proved that I could have a whole successful thing over here. Now I'm going to go try this other thing. And if, even if I fail, I've got this career that I could be proud of. Right. So there is a lot, there's a lot of psychological stuff that goes into that. So I'd be happy to help people because there isn't a lot of people that have gone through your precise situation, but if you find them, God, that's gold.

So yeah, lock onto them. That's awesome. So let's do 2 things. Let's, how can they reach you? Anything you want to share? Links, phone number, I don't care. Anything you want to share with them? And then we'll queue up tape for next week.

Yeah, sounds great. So my email is ryan@spartan-investors.com, and then you can go to our website, spartan-investors.com, same website as the email domain. You can also hit me up on LinkedIn. I'm on LinkedIn. So yeah.

Love it.

Love it.

Let's queue up Tate for next week. What might they hear? Now this way you get to mold him already.

You probably like that.

Yeah.

So, you know, I'm a self-storage guy. I've got the unique ability that I've got control over the whole operation. I know everything down to the penny about my company and where it's being spent. And you can invest in and benefit from one of the best operators in self-storage in the industry by investing with me, right? Tate is unique in that he goes and finds people like me, right? He, Tate's invested millions and maybe tens of millions of dollars with me at this point. And he goes and finds people like me. He goes, finds the operators, right? But he doesn't actually operate the deal. He finds the good operators that operate the deal, and then he helps pair investors in those offerings. And I think that gives people immense amount of diversification within real estate or other asset classes like oil and gas, working interests, doing assisted living, doing multifamily. If you want to get exposure to self-storage or if you want to get exposure to land development, whatever it is, he kind of finds those opportunities. Versus just focusing on just one asset class. So that's kind of the big difference. And I think you're going to get some good perspectives on kind of having a nice well-rounded portfolio from him. So it's very good.

Love it, Ryan. Super appreciate you and Tate and guys, smart listeners. So this is 1 of 2. Next week will be 2 of 2 and you guys can piece this all together. Get ahold of them. I'll put everything he said in the show notes. And Ryan, if I'm not mistaken, I will see you soon on your podcast.

See you then. Yeah, looking forward to having you back on.

Appreciate it.

All right, thanks.

All right, guys, that wraps up our part 1 of 2 with Mr. Ryan Gibson. And listen, no fluff, no theory, guys. Always, always, always just real-world strategies. If you are ready personally to implement what you're hearing, like especially with these guys who have left corporate, I know a lot of you want to do that. Head over to smartrealestatecoach.com. We're going to help you build this the right way. We'll see you next week on part 2. All right, guys, super cool announcement. On the 27th through the 29th of September, we have our 3 Paydays Live. I'm talking no gurus there, no fluff, just a proven system that builds wealth. Literally join us on this 3-day event, guys. It's in person. There will be no virtual. We're going to show you literally step by step how deals are constructed, how we negotiate and solve challenges for sellers. And how we close those deals without banks or credit. Super important when I came out of the crash. You'll see real deals, real numbers, and exactly how the 3 Paydays model creates multiple streams of income from just one deal. I'm talking averages of $45,000 to $350,000 per deal, all 3 paydays. Just one or a handful of these can change your year, guys, and certainly create a total breakthrough by the year 2027 for you. You're going to leave this event super clear and confident about how to speak with sellers, how to structure offers that are win-win, and how to think through deals literally in real time. We've made some really cool adjustments this year too. We've built in hands-on workshop learning experiences and extended the Q&A after each section and some other really cool experiences so you can actually do deals when you leave, not just conceptually understand it, but do deals. And lastly, we've removed all outside speakers, back to our roots, just the family team. You're going to hear from people who have recently closed deals and how they made it happen. And that's important because association with others and proximity really, really matters and can and will change your trajectory. If you're serious about totally replacing your income or adding a really cool supplemental income and building some long-term wealth, this is where it becomes real, guys. 3 Paydays Live. It's led by our family team and our coaches, all who are in the trenches every single day, every single week. Again, no outside speakers selling you stuff, none. Just go to 3paydayslive.com/podcast to learn more and to claim your spot. We'll see you there. All right, thanks for tuning in to the Smart Real Estate Coach Podcast. If you got value from today's episode, guys, be sure to subscribe so you never miss a future episode. It literally takes one nugget to access some of the things we're doing. And when you're talking the amount of the size rather of the paydays, it's an opportunity cost that you can't let go. So don't miss an episode. And for goodness' sake, share it with someone who needs to hear it. If you're ready to find your best path for getting started on your real estate investing journey in general, head over to smartrealestatecoach.com/getstarted. We're going to help you take the guesswork out of See you in the next episode.