Episode 243: Their First Self Storage Deal Just Changed Everything

Joe Downs (00:01):
Hold on. You just closed on a major deal, right? The first self-storage deal of your life, and that’s your reaction. That’s literally what you were like.

Adam Leiby (00:11):
Should we be honest here, Kirby?

Kirby Leiby (00:14):
Yeah.

Big Announcer (00:17):
This is the Self Storage Podcast with the original self-storage expert, Scott Meyers.

Joe Downs (00:24):
Welcome Storage Nation to the Self Storage Investing Podcast. I am Joe Downs. I’m guest hosting for your regular host, Scott Meyers, and I’m excited to be here with a special edition of the First Deal. First dive with some of my favorite students, Adam and Kirby Leiby out of Raleigh, North Carolina. Welcome to the show, Adam and Kirby. How are we doing tonight?

Kirby Leiby (00:47):
Thank you. Appreciate it. Doing good. Doing good.

Joe Downs (00:48):
Good.

Adam Leiby (00:48):
Doing good.

Joe Downs (00:49):
Excellent. Excellent. So you guys are here because you just closed on your first deal, and I thought it would be really cool. In fact, we had a lot of people, a lot of folks asking us at the academy for, I don’t know, maybe we’ll call it social proof, right? They want to hear from folks like you who’ve actually done it. Scott talks a lot on this podcast about how he teaches people to buy self-storage, and obviously at the master we have master classes where we’re talking about how you can do this too. And then folks coming to the academy, and we’re telling them at the academy, you guys can do this too. And here you are, you’ve actually done it.

So first, we’re going to walk through the whole process, but I want to hear from you about how you felt in particular when you signed those final loan documents on a deal. By the way, that almost didn’t close, and we’ll get to that, right? But when you first signed, the ink is still wet, and you’re walking out of that, I don’t know if it’s a closer’s office or if you signed at your dining room table. Give me the scene. Where were you? What’s going on? And when you walked out, were you excited? Or that night were you guys like, what the hell did we just do?

Adam Leiby (02:05):
I mean, I could say for myself, I was excited leading up to the closing day. That was more nerve-wracking with all the logistics of working through once we got under contract and getting all the vendors scheduled for inspections, etc. Kirby, I’ll pass it over to you for your thoughts.

Kirby Leiby (02:29):
Yeah, I mean, I think…

Joe Downs (02:31):
Hold on, we’re going to get to you. Kir, you just closed on a major deal, right? The first self-storage deal of your life, and that’s your reaction. That’s literally what you were like.

Adam Leiby (02:46):
Should we be honest here, Kirby?

Joe Downs (02:48):
Yeah, you gonna lie?

Adam Leiby (02:52):
Well, it was a crazy situation because we actually had an offer on another property, a wedding property that we put an offer on the day before. And that morning when we were literally driving to the lawyer’s office to sign the contracts for the self-storage facility, we found we didn’t get the wedding venue. So we were walking into the lawyer’s office pretty upset. But then obviously after we signed all the paperwork, it’s one of those things that you can’t let it get the best of you. You keep moving on, keep looking forward. So yeah, we’re excited to get the first one under us. We hit our goal. We wanted to really get one in the first six to eight months of this year so we had the back half of the year to really use Scott Meyers’ network and the mentors, etc. So it’s been amazing to say the least.

Joe Downs (03:50):
Alright, my mind’s blown a little bit because what I just heard was you were trying to close two deals, it sounds like, on the same day.

Adam Leiby (03:57):
Yeah.

Kirby Leiby (03:58):
We love—

Joe Downs (03:58):
Not your average student here.

Kirby Leiby (03:59):
Yeah, we love to overwhelm ourselves. The more on our plate the better.

Joe Downs (04:03):
Yeah. Kirby, I still don’t like Adam’s answer, but I accept it for what it is. Tell me about what was going through your head. Were you excited? Was there any excitement with you two at all?

Kirby Leiby (04:13):
Yeah, no, I mean obviously we were working on this deal for months ahead of time, so this was our main focus and we got to the lawyer’s office, we brought our two children with us. Since I homeschool them, they tag along with us everywhere. So it was cool to see it in their eyes too, how excited they were just to be like, “We actually get this facility. This is ours.” And we were like, “Yeah, this is it.” So they got to be in the lawyer’s office with us and kind of experience it. We used a local lawyer who was great, who specializes in self-storage. They were really knowledgeable through the whole process. Afterwards we just went out to eat for lunch and toasted with our kids, and the rest is history now.

Joe Downs (05:02):
That’s amazing. So the kids were excited, somebody was excited in the Leiby household. I’ll take that. I was more excited for you, I think. Alright, so how did we get here? How did you guys end up on this podcast? Who are the Leibys? So talk me through it. Rewind back to the beginning, how long ago it was, whose idea it was. Who are you? What do you both do? Kirby, you homeschool, I just heard that. I’m not sure if you do anything else. Adam, I don’t know what you do. Tell our audience who you guys are, what you do, and why you even thought about this. I don’t even know if you thought about self-storage first or something else, but just walk us through the beginning stages of this process of making a decision to say, we want to do something else or something more.

Adam Leiby (05:55):
Yeah, I’ll start us off. It was really around the summertime. It was actually July 4th week. We were on a weeklong vacation that we usually take every year. And I think Kirby honestly just got to the point of being sick of listening to me complain. I’ve kicked the tires a lot over the last year or two. I’ve been in corporate sales for the last 17 years and was really looking for something different. You get to a certain point in your life and just start looking for more. I’ve always considered myself a good entrepreneur, but never went down that path. So when we were on vacation there, well actually just to back up for a second, I do a bunch of traveling through North Carolina and I’ve always noticed these self-storage facilities and how they kept growing and popping up everywhere. And I’m like, man, this seems like a good business. But I’ve kicked the tires on several other businesses as well. It was Scott Meyers, actually. It was on, I believe, Instagram. Kirby was following him and said, “Hey, you should do this academy coming up.” It was in November of last year, and it was at that moment that we made the commitment, we signed up, and we made the commitment to at least get to the academy and check it out and make that investment. I’ll just kind of pause there for your thoughts as well, Kirby.

Kirby Leiby (07:26):
Yeah, I mean Adam has a strong work ethic. He’s had it all his life ever since I knew him. When we were on vacation, I sent that to him and I was like, “This would be perfect for us. I think at least it’s something that we can do on the side until we can build it up even more.” He was just ready to do something new. And I think just being on vacation and being in that mindset of not having work on your mind and stuff like that, I think it helped us make the decision even more. Then he went to the academy and he came back and he was a different man. I was like, “Who are you and what happened to Adam?”

Joe Downs (08:08):
Alright. He was just so excited. We’ll unpack that in a second. So it sounds like you were tired of the life you were living. You had an open mind, but you didn’t see storage, if I heard correctly, Kirby did. Is that right?

Kirby Leiby (08:26):
Yeah. I saw it on Instagram. Adam’s not a huge social media guy, but whenever I see something that I want him to see, I flat out say like, “Look, I think we need to do this.”

Joe Downs (08:40):
What did you see that piqued your interest, that made you think, “Hey, I got to talk to Adam about this”?

Kirby Leiby (08:47):
It was basically just talking about previous academies. It was kind of like a recap of, do you want to be your own entrepreneur? Do you want to be able to be more flexible with your life? Everything that we really had been talking about recently. So it was just a win-win all the way for us.

Adam Leiby (09:08):
The passive income was the piece of it, right? Passive income.

Joe Downs (09:11):
Okay. Yeah. Had you looked at other opportunities? It seems like your minds were open and Kirby, it seems like you were maybe even looking.

Kirby Leiby (09:19):
Yeah, I mean we were looking at a lot of stuff. We’re always open for new ideas, but for some reason this really stuck out. And I think honestly it was just the way that Scott and his team presented themselves with the academy and the education behind it because we had no idea anything about storage. I went to school for hotel and restaurant management, so I know nothing about that. And Adam, I mean he went to school for business, but still our backgrounds had nothing to do with storage. So we really liked the fact that you can go and there are these mentors that can help you at the academy, and they’re with you along the whole way. That’s kind of what I think drew us in.

Joe Downs (10:02):
Okay. Alright. So you share this Instagram post and what you saw, maybe you did some more research. I don’t know. I would think you did. And then you pack Adam up and ship him out to an academy. The good husband he is, he went, and he came back a changed man. Those are your words.

Kirby Leiby (10:21):
Yes. Yeah.

Joe Downs (10:23):
So Adam, what happened at the academy?

Adam Leiby (10:27):
It was kind of weird, man. I go to a decent amount of conferences just with my career, and I got down there and I almost felt like I was at home. It didn’t matter who the person was, if it was you, Joe, when we met for the first time down there or anybody else, I was like, man, these people are very like-minded. I feel like I’m already friends with them. They’re very easy to get along with. And that was very comforting for me because all of this was way outside of our box. We knew we were going to have to make an investment if we wanted to move forward with this too. So I was looking at all those different pieces, and just thought, man, I want to get to know these people better. Everyone seemed like a great group of folks.

Joe Downs (11:16):
Okay. And thank you for the little plug there. You don’t have to compliment the host. So what else? You felt at home. How about—you were there for three days that I know. What happened during the three days? Besides the comfort level, it had to be more than, alright, Joe’s a nice guy and Jackson, whoever was there, they’re nice people. That’s comforting, sure, but you still made a big decision when you left there, or at least you went home to talk to Kirby about a big decision.

Adam Leiby (11:50):
Yeah, I pretty much had her on speed dial that last day.

Joe Downs (11:56):
This is not a marital counseling session, right?

Adam Leiby (12:01):
No, we communicate very well, for better or for worse. I had her on speed dial pretty much throughout the academy there, but it was the content. So it was first feeling like I was kind of home, I liked the people that I was around, and then it was the content and the speakers and really all of that. And then starting to learn the concepts of how self-storage works. I could see the vision right from the get-go. I was like, this is something I want to do. It makes sense. So yeah, we just went all in on it.

Joe Downs (12:41):
Okay. So you actually went all in while you were there. You consulted with Kirby. Kirby, what was going through your head while this was going on?

Kirby Leiby (12:49):
Yeah, I mean, like I said, even before he got home, just being on the phone with him, I could tell just the excitement in his voice and the stories that he was telling me, the people that he was meeting, and it made me really happy. So I knew that it was a good decision just based on his attitude toward it. So I said, yeah, I think it’s a great idea. As long as we’re a hundred percent in on this together and we work together on this, I think we could go far. That’s what we did.

Joe Downs (13:23):
Alright. Now you both had, and we’ll get into what happens next, but you both had a decision to make there from a time standpoint. Obviously there was a cost component to it, but there was a time component to it. So discuss how you were going to pull this off. Who was going to do what, what the roles were going to be between the two of you? Because I know the audience doesn’t know, but I know looking back now, you’re both very involved in this, right? And actually, Kirby, you kind of just threw in there that you went to school for hotel management. That actually probably plays more of a role than you think in helping you prepare for this. So what was the discussion like in terms of—you hadn’t even started yet, you made a decision to move forward, but you hadn’t started with any of the mentoring and training yet. There was a little bit of a period of time there. So what was the discussion like at home with regard to your time and who was going to do what and how were you going to handle this?

Kirby Leiby (13:56):
Yeah, so I think initially our goal was we set ourselves a goal and I think that really helped. We said it was November, obviously when he got home, and we both agreed, why don’t we really try hard and get a storage facility by this time next year? So we gave ourselves one year, and it might have been challenging for us. We had no idea how hard it was going to be to get one, but we didn’t really discuss roles at that point. Our main focus was, let’s get one. So we hit the ground running, we made up letters, we delivered them.

Joe Downs (15:33):
Whoa, let’s not jump ahead. We haven’t gotten to the training yet. Sorry, I’m trying to zero in on—you’ve made the decision, you’re about to start the training. Did you guys discuss who was going to do what? You had a feeling, you had a little bit of an idea of what you were about to get yourselves into.

Adam Leiby (15:51):
Yeah, initially I was going to take the lead on it and she was going to help out as she could. But once we made that commitment and started with the mentor and the training, we kind of just went for it, because neither one of us knew the industry. So it was just like, hey, let’s attend all this together. I like to use Kirby as a sounding board or get her opinion or insights. Like, hey, do you think this is right or that’s wrong? So we both wanted to dive in and learn from the educational piece. But to Kirby’s point, we didn’t really say, okay, you’re going to handle this piece and I’m going to handle that piece. That came along months down the road where we decided I would be essentially the CEO and Kirby would handle more of the CFO role. So she’s handling the website and all the finances, and I’m handling the rest from an operational standpoint.

Joe Downs (17:01):
Okay. So let’s cover that at the end, what’s happening now. Very cool. This is exactly what people want to hear, so thank you guys again for being on here. Now walk me through the training. What did you expect, what did you get, and what did you do? What was your day-to-day like once you were going through it? What was the beginning of it for you? Obviously, I know, but I want you to tell the audience.

Adam Leiby (17:29):
It was burning that midnight oil. It really was, right? Because again, Kirby, I don’t even think she mentioned this earlier—she’s homeschooling, but then she’s working part-time too, and I have a full-time job. So a lot of those evenings, the first couple of months, it was a grind. It was a commitment, but it was an investment that we put up front. We’re not the type of people to take that lightly. If I’m going to put money down and I have a goal set, we’re going to run at it fast. And that’s what we did.

Joe Downs (18:05):
Okay. So what was the beginning of the training?

Adam Leiby (18:12):
It was a little scary in the beginning. We went right into underwriting training and I was just like, oh man, there’s a lot to this. There’s a lot to this. Once we got a couple classes in and started to underwrite a handful of deals and go through it, it really was repetition.

Joe Downs (18:32):
Let me pause you there if I may, because you said something that I think a lot of people might relate to. It was a lot of underwriting—financial underwriting that you’d never been exposed to before.

Adam Leiby (18:43):
Yeah.

Joe Downs (18:44):
Okay. When you came out of it, how did you feel?

Adam Leiby (18:48):
Great. Yeah, it was one of those things, like anything else. With me being in sales, sales is scary too. It’s just a muscle, it’s repetition. So it clicked. It takes me a little bit. I’m not the sharpest tool, they say, in the shed, but through repetition, that’s how I learn. And that’s what was good for me—being consistently on those training calls week after week after week, and doing the homework and putting in the work, it just clicked at a certain point, and then we felt good about it.

Joe Downs (19:23):
You felt like you had a rhythm to it and you understood. Were all your fears that you went into it with gone?

Adam Leiby (19:27):
Yeah.

Joe Downs (19:27):
Okay. And then you come out of training, at least the initial training, but you’re never really out of training because you’re participating in master recalls weekly and open pods and stuff like that. But you’re out in the real world applying what you’ve learned. What was that like? Who was doing what? Successes, failures—give us some nuggets.

Adam Leiby (19:55):
To be completely frank, it got a little frustrating because once we felt like we had our feet underneath us from an underwriting standpoint, then it was like, okay, let’s just start underwriting these deals. So every deal that we potentially thought was good for location or size, we had a general scope of what we were looking for from a demographic standpoint. It just got frustrating because the more deals we underwrote, the more we realized it just wasn’t making sense. It wasn’t penciling. And that was the tough part, honestly, because we had all that training, and it felt good, and I was like, all right, I know how to do this. But the hardest thing, honestly, is finding a deal that makes sense to move forward on.

Joe Downs (20:42):
Now you say it’s frustrating, and I totally get that because I’ve been in the business a long time and near and dear to my heart is the frustration of finding what you think is a good deal only to learn it’s not. Is it fair to say that you were frustrated, but aren’t you glad you were frustrated because you didn’t buy those deals?

Adam Leiby (21:04):
Absolutely. And I think you might have talked us off the ledge of one there, Joe, early on, because that was the other thing. When we thought we found a deal and then we would jump on with Jack or yourself, you guys brought us back—

Joe Downs (21:20):
It was demoralizing.

Adam Leiby (21:21):
It was demoralizing.

Joe Downs (21:23):
I know.

Adam Leiby (21:23):
You brought us back down to life, because the first one we were super excited. We were like, “Yeah, this is the one, this is the one.” And then a week later we were like, “No, that’s not the one.”

Joe Downs (21:33):
I’m going to put an analogy in your mouth for you and you agree or disagree. Was it a good hurt, like when you are working out?

Adam Leiby (21:42):
Yeah.

Joe Downs (21:43):
It’s painful at the time, but it’s a good hurt.

Adam Leiby (21:46):
Yeah.

Joe Downs (21:46):
Okay. And I don’t want you to scare too many people out here, but look, what do we say from the beginning? Success is hard work dressed up in overalls, and that’s what it is. And that’s true. We always feel bad, and I particularly remember you guys being excited about that deal, but you don’t know what you don’t know yet. You’ve been empowered to go out and find deals and underwrite them, but you’re still polishing the finishing touches of putting it all together. And that’s how the program is designed—the mentorship program is designed—and it’s also designed to not let you make that mistake.

Kirby Leiby (22:31):
And I think just having patience is huge. You just need to have patience, because Adam just said we were getting trigger happy, like, “Oh, let’s put an offer, let’s do this.” But if anything, it was just more practice for us, more underwriting. I think the more we underwrote, the better we got at it, the faster we got at it. I think the first time we underwrote a deal, it took us, I don’t know, a couple of hours.

Joe Downs (22:55):
I don’t know about that. Come on now.

Kirby Leiby (22:57):
I mean, if you add it up, I think it was.

Joe Downs (23:00):
It probably did.

Kirby Leiby (23:01):
Yeah. And then toward the end, we were a lot quicker and I think we were a lot more confident in our decisions too.

Joe Downs (23:08):
And pretty soon we’re going to be rolling out AI tools for you, and it’s going to take minutes, not hours. Okay. So the deal you have, what’s it called? Where is it? Let’s get a little quick promo for you.

Adam Leiby (23:21):
Here’s the storage—yeah, Lemon Spring Self Storage in Sanford, North Carolina. It’s about 30 minutes south of Raleigh.

Joe Downs (23:28):
Can a listener get a little move-in special?

Adam Leiby (23:32):
For you? Of course. Actually, we have a promotion going right now, half off the first month. So come on in.

Joe Downs (23:40):
Two, three minutes. Tell me about how you found it and ultimately closed on it. And also let’s discuss the hiccup that happened there.

Adam Leiby (23:52):
So we found it through the training. We got on a lot of brokers’ lists, so we had a lot of deals coming into our inboxes. It did catch our eye at first. The funny thing is we actually walked away from it. We looked at it, we underwrote it, and we were like, “Eh, this isn’t a good fit.” A few days later we were on the phone with Jack and Jack said, “Hey, did you see that deal down in Sanford?” And we were like, “Yeah.” He unpacked that a little bit. He said, “So why’d you guys walk away? I think you guys should take a second look at it.” So we did. And we discovered a few things that were pretty eye-opening. For one, the previous owner never updated his SEO on Google. If you tried to actually call—if you Googled Lemon Spring Self Storage and called—it was the original owner that built the facility, and the number didn’t work. So it was stuff like that we were finding right off the bat. And then from a per-capita standpoint, the competition that was around us in that area, we just felt like there was opportunity to be had there.

Joe Downs (25:12):
Okay. And then you talked to Jack, went through, you underwrote it, brought it to Jack. What was that process?

Adam Leiby (25:21):
After we talked to Jack and he said, “Hey, take a second peek at it,” we underwrote it and then circled up with him. He felt good about the numbers. We felt good about it.

Joe Downs (25:33):
How did you do on your underwriting when you brought it to Jack? How did he score you? If I asked him, what would he say?

Kirby Leiby (25:39):
Gosh, I’m kind of curious. I want to know the score.

Adam Leiby (25:42):
Yeah.

Joe Downs (25:42):
Were you in line? Did he agree with your assumptions and valuation?

Adam Leiby (25:52):
For the most part, yeah.

Joe Downs (25:54):
Well, then you did well. You get an A. So you made an offer. Was there negotiating at all? Was it back and forth?

Adam Leiby (26:01):
Yeah, a little bit.

Joe Downs (26:04):
What was the ask? Tell me about the negotiation.

Adam Leiby (26:08):
The ask was 699, $699,000. We were actually thinking our underwriting, what we were projecting to put in an offer at, was 615. That’s where Jack really stepped in with phenomenal mentorship, honestly. He said, “Well, why 615? Why not go 585 and start lower?” I said, “Well, you think that’s disrespectful? Is that too low?” He said, “Pick up the phone, call the broker, feel him out first. See what he has to say. He’s going to tell you yay or nay.” So we did exactly that. I called the broker and said, “Hey, we’re underwriting this. We’d love to put in an offer. If we can get around the 585-590 area, would that be entertaining to the seller?” He said, “I believe it would be.” And I said, “Okay, we’ll have an offer coming your way within 24 hours.”

Joe Downs (27:13):
And you picked it up for, do you mind disclosing? You don’t have to, although it’s public record, you might as well.

Adam Leiby (27:18):
Yeah, 625,000.

Joe Downs (27:21):
So you negotiated. You started at 585 and ended up at 625. Happy with it?

Adam Leiby (27:27):
Yeah, absolutely. And going back through the negotiation, we were at a point where we felt good about it. If they didn’t accept 625, we were going to walk away. I told the broker that upfront. I said, “Hey, this is our best and final. If you guys can’t do that, I understand, but we’re not going any higher.” In the end, they accepted it.

Joe Downs (27:52):
Awesome. How do you guys feel today?

Adam Leiby (27:56):
Really good. We’re getting some solid traction over the last couple of weeks now that we’re through that transition period and got the software up and running. Everything is really starting to pick up.

Joe Downs (28:10):
Start to finish, from Instagram post to closing, roughly how long?

Adam Leiby (28:16):
It would be actually 13 months.

Joe Downs (28:19):
Thirteen months. From training to closing, how long?

Adam Leiby (28:27):
We closed in August, so that would be nine months.

Joe Downs (28:34):
Awesome.

Adam Leiby (28:36):
During ten months.

Joe Downs (28:37):
And it’s performing to your expectations?

Adam Leiby (28:40):
Yeah. The reason we bought this one is there’s a lot of value add there. It’s half empty; it’s only 51% occupied. So there’s a ton of value to be had there, and that’s where our focus is.

Joe Downs (28:55):
In a good market, right? Obviously.

Adam Leiby (28:57):
Yeah, exactly.

Joe Downs (28:58):
I’m excited for you guys. What’s next?

Adam Leiby (29:01):
Another one. Our next goal is to get another one in the next year. I would love to pick one off a year. If I can do more than that, phenomenal, but that’s my goal right now.

Joe Downs (29:14):
How many more until you’re able to leave your job, Adam? I know that depends, but…

Adam Leiby (29:21):
It really does depend on the size. The next one, this one, we weren’t really looking for. Lemon Spring Self Storage has about 92 units, 10 parking spots. It’s a smaller facility, but we thought it was a great facility to cut our teeth on for the first one. We’re going to look to scale up a little more now. Hopefully if we can get 1, 2, 3, 400 units, I would say three. Three is what I’m thinking three to four. But I do like that W-2, and the banks do too.

Joe Downs (29:59):
The banks do too, yeah. Do you feel like you have the tools now to go build this empire, this storage empire?

Adam Leiby (30:05):
Absolutely. Everybody across the board has been so supportive through the mentorship. Rod and Kristen Blanc have been phenomenal, really helping us on the back end here. And your team, Joe, and everybody at Scott Meyers. I couldn’t be more thrilled with where we’re at at this point in our journey really not even a year in. So I’m happy.

Joe Downs (30:34):
Let me tell you something, that warms my heart. Not because we’re interviewing you for the audience to hear, but I know you guys, and that truly warms my heart. I’m so happy for you. Thank you so much, both of you, for taking the time to share your experience, because that’s what people have been asking us to hear who’s actually done this, what it’s like. They wanted to hear your fears and the unknowns and how you tackled that. So thank you so much both of you for being so gracious and sharing your story with us.

Kirby Leiby (31:08):
Yeah, thanks for having us.

Adam Leiby (31:10):
Yeah, absolutely. Appreciate it. Love to

do it again.

Joe Downs (31:12):
Thank you. Well, thanks for listening to the First Deal, First Dive special edition of the Self Storage Investing Podcast. Again, I was your host, Joe Downs, filling in for Scott Meyers, and I’m looking forward to bringing you another episode of First Deal, First Dive with another successful student and another story to share with all of you.

Big Announcer (31:33):
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