The flight instructor, who was giving tailwheel instruction reported that, after several dual landings, he exited the airplane to allow the pilot receiving instruction to conduct a solo flight. The flight instructor further reported that, during the pilot's third solo landing, he observed the pilot make a wheel landing. During the landing, the airplane exited the runway to the left and impacted a hangar.

The airplane sustained substantial damage to the fuselage.

The flight instructor reported that there were no preaccident mechanical failures or malfunctions with the airplane that would have precluded normal operation.