#181: From Accidental Landlord to Real Estate Empire
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Welcome back to The Richer Geek Podcast! Today, we're joined by Whitney Elkins-Hutten, a real estate expert dedicated to helping busy professionals build wealth. Whitney's journey started in 2002 and has since grown into a career filled with impressive achievements. She is the Director of Investor Education at PassiveInvesting.com, Founder of AshWealth.com, and author of "Money for Tomorrow: How to Build and Protect Generational Wealth." Whitney is also a partner in over $800MM in real estate, including 6500+ residential units, 15 car washes, and 2200+ self-storage units across 11 states.
In this episode, we're discussing...
From Humble Beginnings to Real Estate Mogul: Whitney's journey from accidental landlord to a multi-million dollar real estate portfolio.
Multifamily Market Outlook: While multifamily remains a strong asset class, careful market selection is crucial due to current economic challenges.
Express Car Washes: A Shiny New Investment: The express car wash industry offers promising investment opportunities with its membership-based model.
Passive Investing Made Accessible: PassiveInvesting.com provides a platform for investors to access real estate opportunities.
Financial Foundation First: Whitney emphasizes the importance of building a strong financial foundation before investing.
Knowledge is Power: Understanding investment principles is key to making informed decisions, according to Whitney.
Resources from Whitney
LinkedIn | PassiveInvesting.com | AshWealth.com
Money for Tomorrow: How to Build and Protect Generational Wealth
Resources from Mike and Nichole
+ Read the transcript
Mike Stohler
Hey everybody, welcome back to another episode of The Richer Geek Podcast. This podcast is sponsored by REI Words. If you need help with your website, and you don't know what your domain rating is, and you need some SEO work, contact REI Words at reiwords.com. Today's guest we'd like to have welcome, Whitney Elkins-Hutten. And I'm gonna go through this real quick because she has done a lot. She's a trailblazing woman in the area of real estate. She's committed to empowering busy professionals turning their dreams into reality. She's the Director of Investor Education at PassiveInvesting.com, Founder of AshWealth.com, author of Money for Tomorrow: How to Build and Protect Generational Wealth with BiggerPockets,. We all know that co-author of international #1 best selling Resilient Women in Life and Business, hosts of the Passive Investing
Made Simple YouTube show and podcast, and a lot of other stuff in real estate with $800MM+, mainly in car washes and self storage units. So we're gonna have some fun with that. How are you doing, Whitney?
Whitney Elkins-Hutten
I'm doing fantastic. Thanks so much for having me on, Michael.
Mike Stohler
Yeah, well, I'm out of breath and I didn't even get all the stuff. You have been a busy woman.
Whitney Elkins-Hutten
22 year overnight success, there you go.
Mike Stohler
That's about like me. So tell us about that 22 year career? And then we'll get into some of the details. But what got you started? And how did you end up where you're at now?
Whitney Elkins-Hutten
Yeah, definitely. So where I'm at today is the Director of Investor Education at PassiveInvesting.com. But I don't have a real estate degree. That's not where I started off. Back in 2002, I bought a house with a significant other and about a month later, the relationship fell apart. I became an accidental landlord. I stuffed the house full of roommates, I completed the rehab on the property and it was in dire need of rehab. YouTube didn't exist back then. I learned everything from a book and going to Home Depot classes. But 11 months later sold the property. And that was a pivotal moment for me because I mean more in that one transaction than I did in my day job that had me traveling oftentimes 80 hours a week. And so I was like, "Wow, I made money." I had been deferring my housing costs to my roommates, providing value to them, you didn't clean living and stuff, really the value I created in the world was unhooked from the time that I had to do to create it. And so I was like, "How many more of these transactions can I do?" I spent several years living flipping and house hacking that eventually decided, "Hey, I should hold on to some of these assets and generate cash flow." So scaled 36 single family rentals partnered on a 52 unit apartment building, and then decided that we needed to go bigger, faster, but do we do actively or passively. Why not both? I went into general partnership on some larger institutional grade assets and multifamily and self storage. Also, at this point in time, I've got a cash generation machine coming in equity generation machine. And so we decided that we would also scale the passive side of our portfolio in case one day, we wanted to ride off into the sunset. And it did not work again, we had those funds working for us. This kind of brings us to where we're at today, or where I'm at today with over 6,500 residential units, 22 under self storage units, fifteen express car washes and a few other business interests at play in there. But really, what I love doing is helping busy people that have a higher and better use of their time and their day job to figure out how to scale a passive portfolio that can work for them.
Mike Stohler
That is absolutely amazing. I go to different networking. "So, yeah, high five! I just hit my 100 home." And you're talking like a pretty good sized business that you're running and helping to run. I mean, that is absolutely fantastic. And it's not every day that you see some of that with that type of portfolio.
Whitney Elkins-Hutten
Yeah majority of it's in partnership. And I'm sure like you investing in hotels, I mean, that is, you go further faster when you realize that real estate is is not a loner game like you when you start getting partners. Whether you decide to go into general partnership, actually run the deal yourself or you decide to take more of a limited partner role. That's where you can really unlock this game and partnerships.
Mike Stohler
Absolutely. And listen to everybody, don't go out and become a GP if you don't know what you're doing. Get into the Partnership on the LP side, which is the limited partner and learn from someone like Whitney because you don't that's how I got started. There's no way that you can say, "Hey, I want 100 unit whatever." You will fail if you don't know what you're doing if you don't have mentors. Always get a mentor. Whitney, multifamily, how's that doing right now? People were kind of scared, you know, the cap rates, you know, that's why I went away from multifamily. I had several 1,000 doors and all of a sudden it's like, yeah, Arizona we're getting into that forecast, I don't know if I was greedy or something, but what are you seeing now? Are you still actively in that? Are you kind of shifting away from the multifamily?
Whitney Elkins-Hutten
Well, I still have active projects. I'm on the whole side of these projects. So you know, navigating the current environment, I still fundamentally believe in multifamily as an asset class, just like the business cycle, so does real estate and the different asset classes in real estate cycle differently from each other. And so right now we're in a part of the cycle for multifamily where cap rates have been compressed, and then you throw on top of that interest rate expansion, pepper in some insurances and taxes, doubling and tripling in some states. And you know, you've had a nice recipe for turbulence and a lot of markets. And so for me, if it's the right asset and the right market, sure, I would invest in it because real estate is so hyper local, so I can't really globalize is multifamily, still a good an asset in every market, because in some markets, it's not, if your population is shrinking, taxes are increasing, insurances are increasing, you might want to, think differently, incomes are coming down, unemployment is on the rise, they may not be a good investment in that market. And in other markets, where we're seeing an influx of people, incomes are continuing to grow, housing prices are continuing to grow, taxes are stable, insurance is stable, multifamily is still an amazing asset class. Fundamentally, we're under built, from anywhere from 4.3 to 10 million homes. And you know, that is a wide number. But with the rise in interest rates in the past 12 to 24 months has pretty much halted construction. So while a lot of markets, especially as you know, in the Phoenix, Arizona area, in particular, we've seen a lot of delivery come online and 2024 into early 2025. Once that absorption takes place, we're now going to see rents start to rise again, because there's no other construction that's happening behind that. While we were in a position where we could probably be on track in five to 10 years to match today's demand. We've kicked that can further down the road with this expansion and you know, interest rates. So I still think in the REIT market, multifamily is an amazing asset to be in.
Mike Stohler
Yeah, and I agree absolutely with you. It is different. Perhaps in the Phoenix area where everyone who's investing in multifamily wants to go to, it's kind of, you need to find those pockets, and those niches in those cities that are up and coming that need it. And I mean, my God, every week, I see some Canadian group or California group or someone coming to Phoenix and just, you know, here's $100 million in multifamily and it's crazy, but it's the same with hotels and other asset classes, you find that market that needs it. And that's what being educated is kind of like, not sitting on your laurels in one market. And I think that really helps. Now, something that's very interesting is you're getting into express car washes tell us a little bit. Is that the kind that you just kind of put the quarters in or put the Visa card in and you spray yourself and...
Whitney Elkins-Hutten
Pray that your 11 year old doesn't hit you with the hose?
Mike Stohler
Well, yeah, I guess I did that when I was 11. Chasing Dad around.
Whitney Elkins-Hutten
Oh, yeah. My daughter. We have we have a campervan that has to go through one of those DIY type car washes. Whenever they come back from the carwash one of them just completely soaked either my husband or her. But anyways, the car wash industry is a $38 billion and growing industry, and it's really in its infancy. We're seeing a lot of development and car washes on the primary markets. But what's most interesting is in the secondary and tertiary markets is the servicing of Express car washes in those arena. And so express car wash is is really that hybrid between the convenience of that car wash that semi automatic car wash that's attached to a gas station.
We're not dropping coins in any on the wall. Nobody's washing their own car. It's a marriage of semi automatic car wash and then also a full service car wash. So somebody pays a subscription, the customer pays a subscription, and they can go and wash their car. perhaps getting vacuumed out free since tire shines waxes the whole nine yards as many times as they would like during the mode month. Now that express car wash is automated, it will read the barcode on their membership. And it's either attached to the car or an app that they have it news based on that membership level exactly what service that in that tunnel that car wash tunnel needs to provide.
Again, it's kind of like the Chick-fil-A, I guess like a car washes, you get that marriage of convenience. But with the express car wash, here's two things that you get one, you can operate that car wash and wash about four to 500 cars a day with two to three full time employees. So it's very efficient. A full service carwash are probably a minimum going to have 10 to 15 people on the premise at any one time, in itself, automated carwash like there's no way you can hit that type of volume. To with that tunnel, you can lower your operational expenditure, you can actually optimize your water usage, your electrical usage, your chemical usage, unlike what you can do in the other types of car washes. And so some people might say, "Hey, a customer can wash their car as many times as they want during the month, like, how are we making money?"
Well, at the membership cost 20 to $30 a month, and the average customer washes their car 1.8 times a month. If I can get the carwash down to 83 cents, which is our average, most of our competitors are at $2.60 a wash it at three cents a wash times two, okay? It costs two bucks for us to wash the car twice. There's a healthy spread in there of margin, that's a great margin for us to pay any sort of CapEx to maintenance on the facility as well as the full time employees the overhead there. And so that is how we make money on these type express car washes.
Mike Stohler
I think that's the key also, is having that membership.
Whitney Elkins-Hutten
Yes.
Mike Stohler
That is so important. Ladies and gentlemen, anything that you do in whatever business that you may have, as an entrepreneur, trying to get that membership is just phenomenal.
Whitney Elkins-Hutten
Monthly recurring revenue is key, it will actually drive a higher valuation for the business than if they were just, engaging in single transaction. If you can stabilize your business in any sort of way with monthly recurring revenue, that's why you're seeing all these apps move to monthly recurring revenue models, that way they can sell to the Tech VC companies at a higher valuation.
Mike Stohler
Yeah, I'm even seeing that in hotels. The hotel just opened up in the Scottsdale, Phoenix area that has its own separate pool and cabana area. That is a membership. And I was like, "Huh, that seems very, it's kind of like a ritzy, kind of hangout." And I was like, "There you go. See, everyone is even trying to get that monthly recurring." Because like you said in the carwash, someone may do it three times a month. If they're just crazy with a butler car, then you get a lot that might skip a couple months. So it kind of evens out. I think that is just absolutely phenomenal. That's very, very smart.
Whitney Elkins-Hutten
That's another little trick. Most people don't realize that they pay 13 credit card statements during the year. Credit card statements really tried to generate 13 statements. And so we even will charge the credit card every four weeks, so not just creating 12 months of revenue, but creating 13 months of revenue.
Mike Stohler
Yeah. Ladies and gentleman, Whitney, I think kinda knows what she's talking about. So let's talk about this knowledge that you have, and the PassiveInvesting.com People are kind of sitting there saying "Okay, she kinda knows what she's talking about. She does a lot. She has a lot of assets." I typed in passiveinvesting.com. Tell us a little bit about that site.
Whitney Elkins-Hutten
Yeah, we're a private equity group. And we're based in the Carolinas and we focus on helping our investors diversify their portfolios into multifamily self storage, express carwashes and real estate debt. We love to focus on the southeast corridor of the United States and a class assets. Our self storage portfolio expands into Colorado and Idaho as well. Those are two really hot markets for self storage.
Mike Stohler
Yeah, it's so funny. I forget what the percentage of the people's garages are already full. And they need a self storage unit. It's amazing. Even I go through my neighborhood and people have their garage doors open. I'm like, "What are they doing?" It's just amazing. They probably have a big storage unit somewhere else. Now let's talk about the storage units a little bit in case, some of our listeners saying well, all these there's too many of them. And I'm like, that probably isn't. But people are thinking because they're popping up everywhere. These big boxes, these huge corporations going on with self storage, how are you looking at that market? And how can you kind of calm some of the people saying it's like, there's too many of them?
Whitney Elkins-Hutten
Yeah, so self storage is a fairly mature industry. There is a maybe cause for concern that you need it as an investor, you need to do your due diligence and make sure you're not getting into an oversaturated market. For us, we like to go into markets, there's a lot of expansion in housing and secondary and tertiary markets. So for one, we look for that trend. We also look for no competitors within a three mile radius of our area, and so, and no intention for new builds in the next three years for self storage in that area.
So really, we're trying to give ourselves a huge amount of runway, this self storage is piggybacking off of the housing crisis as well. And so really, with us being underserved in housing, even if we got everybody into the right housing, a lot of people are going to be in multifamily units. Well, they don't have, unless it's a townhome, they're not going to have a garage, the store, and they're going to need extra storage space, another kind of death dislocation, people that are moving. I know, when my parents passed away, and my grandparents passed away, I had to unload the house that I put in the storage unit, my brother moved out, or my brother in law moved out to Colorado, he had to go into a storage unit. storage units are pretty sticky, because once you get somebody to move in 100 bucks a month, then you raise their rents 3% 6% annually, that's not going to be enough for them to go get a moving truck and move down the street to a better price to unit, right? So they're pretty sticky.
And divorce is another one. That's the kind of another trend that really fuels the self storage arena is a household separate, generally one person is moving out of the household, or maybe both people are moving on the household and the house has to sell. So there is the long term trend of you know, what's the housing trend in the area? Can you know, pair that with self storage, and then we've got those four D's in there, the death, dislocation, the divorce, and just like, movement patterns, like people moving for jobs, can we pair self storage, put the self storage facility in those different paths?
Yeah, it's interesting that you never think about the different reasons why people have all this stuff. And then hopefully, there's a garage sale coming shortly after, or an estate sale.
Mike Stohler
So people are interested there. "Hey, you know what? I'm going to go to PassiveInvesting.com. And everybody again, it's Whitney Elkins-Hutten. They click on No More or Talk To Me or Chat With Me with some buttons. Tell us about the requirements, what you're looking at. Are you doing funds or is it syndications? Tell us a little bit about what your world looks like on the investing side?
Whitney Elkins-Hutten
Yeah. Well, when we help our investors with capital, generally, it's going to be into single asset entity. So syndicating a single asset entity, like a multifamily building, where we do small portfolios with our self storage and out express carwashes. Those are, small, like little kind of like the hybrid between a fund and like a single asset entity, so you get some diversification there, or we have our debt fund that's open right now, when that is the art, any investor that comes into the debt fund is immediately diversified across all the loans that are deployed in that debt fund. And so you can visit PassiveInvesting.com, join our Investor Club, or if you'd like to some of the free goodies that I have personally on our passiveinvesting.com website, like a free ebook, or if you want to talk with me directly, you can go to PassiveInvestingwithWhitney.com.
Mike Stohler
There we go. Credit investors only?
Whitney Elkins-Hutten
With accredited investors, you know, that's the investments that we have open. Weanticipate at some point in time having a fund open for a sophisticated investor, but right now just accredited.
Mike Stohler
Yeah, it's easier that way.
Whitney Elkins-Hutten
From a marketing perspective, yes. But we do want to be able to serve everybody if we can.
Mike Stohler
If you have 1000 people, they're just dying for the next thing, then you can. You don't have to go through the credit investors. Whitney, if there's one last thing that you could tell before we leave, our time is almost up. What have I not hit on? What is something that a little nugget, or piece of advice that you could give our listeners before you leave?
Whitney Elkins-Hutten
Yeah. I know a lot of people are really nervous to invest in today's environment. One other thing that I do is I help investors understand how to create a really solid financial foundation, put together their investment thesis and really understand the principles on how to invest. So they feel it should feel comfortable, whether the market goes up, down or sideways. If you're interested in learning more about how I work with those types of investors, you can check out ashwealth.com, or check out my book, 'Money for Tomorrow: How to Build and Protect Generational Wealth'. I wrote that with that investor in mind, especially given today's market.
Mike Stohler
It is scary and you see people, some people are like, "Oh, no, this is the time." Some people say, "Nope." Some people say after the election, I mean, there's so many ups, with raising money at this particular moment, everything is going on in the world. Whitney, it's been a pleasure having you on The Richer Geek Podcast. Have a wonderful and blessed night and hopefully all will go well. Everybody, check it out, PassiveInvesting.com with Whitney Elkins-Hutten. Thank you ma'am for coming on.
Whitney Elkins-Hutten
Thank you so much, Michael.
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ABOUT WHITNEY ELKINS-HUTTEN
Whitney Elkins-Hutten is the founder of Ash Wealth Consulting and Director of Investor Education at PassiveInvesting.com. A seasoned real estate investor and personal finance trainer, she leverages her scientific and business background to help others achieve financial freedom. Whitney manages over $800M in real estate assets and has been featured on 80+ podcasts. She’s passionate about teaching families sound financial principles and enjoys trail running, camping, and board games in Colorado.