I was recently interviewed by an accomplished author for a book he’s writing about the phenomena of storage auctions. I won’t go into details yet on the name of the author or the book as it has not yet been published. I would like to share my interview answers and comments with my followers though.
Storage Auction Questionnaire
1. Can you share a little of your background, how you got started in storage auctions?
I’ve been attending storage auctions for over two years and have purchased around one hundred units during that time. I was turned-on to these by my stepfather who has been interested in all forms of auctions for most of his life.
He has only been to a handful of storage auctions, however, he had a huge find on the second unit he acquired. He paid $20 for a small 5×5 locker that had some comic books and other collectible items in view. He pulled a mint-condition Civil War Confederate belt buckle from that unit that was still wrapped in the paper in which it would have been delivered to a soldier. He has received offers as high as $5000 for the buckle, but has held on to it.
2. What are some misconceptions that someone new to the business usually has?
A year ago, seeing fifteen or more people at an auction would be considered a crowd. Now, with the recent television series, crowds of fifty to one hundred are the norm. These shows tend to misdirect people into believing that huge finds are a regular occurrence. This couldn’t be further from the truth.
The potential for large returns from acquired units is certainly there, but competition can be fierce, and gamblers can easily be pushed into spending thousands for units that will be a total loss. I see it all the time.
I’m skeptical of many of the finds shown on these reality storage auction shows. If you ask anyone who has been doing this a decade or longer, the huge scores they encounter every week are the type veterans find once every couple years, at best.
3. What are some tips for beginners to be successful in this business? And what are some realistic goals for someone starting out?
I’d recommend attending a few auctions and watching the action without bidding. Also, storage auction blogs and forums, like storageauctionboards.com (shameless plug for a site we’re affiliated with) offer excellent feedback and tips on avoiding losses. There are several books available on the subject and they do offer *some* good advice for those starting out. However, I’ve purchased and read most of these and have found they were poorly written and edited, and overpriced.
In terms of goals, I’d set a spending limit and try to stick to it. Picking up a cheaper unit in the $100-$500 range is a good way to get your feet wet.
4. How do you find auctions to attend in your local area?
The web site AuctionZip.com can help you find storage auctions in many areas. However, the more mainstream your source is, the more people you will find at the auction. I like to read ALL the local newspapers and check the classifieds for auction dates and times. Also, making a list of all the storage facilities in your area and contacting them individually is a great way to find auctions that advertise in obscure publications and as a result have less patrons in attendance.
5a. What does your typical auction day look like? What happens before? During the auction? After the auction? Can you give me a feel for the auction process? Before, During, After?
I use my Android phone with a Gmail account to maintain a calendar that contains all the monthly auctions I’m interested in attending. At the start of each month I spend a couple hours populating the calendar with all the dates, times, addresses and phone contacts for each facility holding an auction. Having this information at my fingertips throughout the month is a huge help.
A typical day consists of three to six auctions at various locations. I try to show up to each auction at least 15 minutes early. You usually have to sign-in with the auctioneer or facility. Most of the auctions consist of only a few units as many debtors make payment the day of the auction.
When the auction starts, the auctioneer and a storage facility employee will lead the crowd from unit to unit. Sometimes the locks are cut in front of you, sometimes they are cut in advance of the auction. For obvious reasons, I prefer seeing the lock cut. I’m actually in the process of lobbying the Virginia Assembly to change Lien Laws so that this will be a future requirement.
After the door is opened, patrons are given anywhere from a few seconds to a few minutes to observe the unit without making entry. The amount of time you have is usually dependent on the size of the crowd. Most use flashlights in an effort to see as much as possible; often the provided lighting is very poor.
Bidding starts quickly and is usually over within a few minutes. The winning bidder then places their lock on the door and makes payment at the conclusion of the auction.
Some folks call it a day and start loading their unit at the end of the auction; others simply place their lock and then attend the next auction on their list for the day.
5b. What is the typical week like in the life of a buyer/seller of storage units?
My experience with storage auctions and processing units has always been in a part-time capacity. I work in IT and do this for fun mostly. I do know several people who make a living from this and can provide some feedback.
The folks who do the best typically own a storefront of some sort, often a thrift store of antique shop, others run their own auction houses and are looking for good, cheap inventory.
The more organized and successful bidders will attend auctions throughout the week, sometimes every day, and then have their own crew of workers and trucks come to pick-up the items they’ve acquired. They then move the contents to their own warehouse or other work space, and “process” the unit. Processing a unit consists of separating items that are sellable, or bound for charity organizations or the landfill.
Processing a unit is a lot of work and tends to create inventory that may not sell right away, so having your own storage space is a must. The more technically savvy auction patrons have streamlined operations for making sales on eBay and Craig’s List, and handling shipping.
Storage auctions are absolutely not a method of getting rich quickly…there is a lot of hard work and long hours involved.
6. What would you say to someone attending their first auction?
I’ve met and spoken with many first-timers. I’m usually very open and don’t mind sharing “trade secrets” or even telling them about future auctions. Some of the “regulars” will not utter a word to the “newbies”.
In terms of advice, I recommend being an observer only for at least a few auctions, unless you see something you think you absolutely must have. Also, bid on what you can see, and not what you think might exist in the boxes or crates that are visible. Anything else is gambling.
7. What are the tools of the trade? What must you not be without at an auction?
You need to show up with cash, lots of it. I never take less than $4000 in cash, a blank check, and my American Express card. Until the auctioneers get to know you, they may not accept your check. So if you see a unit you really want, and didn’t bring enough cash, you may not get it.
A decent flashlight is useful, but a lot of the experienced patrons don’t use them. I usually take one as a convenience, but often I will bid without one on a dimly-lit unit because I’ve seen enough to know the potential.
A smartphone can be useful for quickly Googling the value of visible items. If you start purchasing units, you should probably have a kit that consists of locks, trash bags, gloves, extra clothes, bungie cords / tie-downs and anything else that you would find helpful for moving the items you’ve acquired.
8. What are some mistakes to avoid at the auction or what common mistakes beginners make?
The biggest mistake is not sticking to your price goals and paying too much for a unit. I’ve done this many times; a recent post on my blog outlines a week last year that cost me $1600 in mostly garbage.
Also, regular auction attendees will routinely escalate the bid on units they have no interest in. It’s like a game for some…if they know you want a unit and the bidding is at $500, they will throw out a $700 bid and then walk away, just so that you have to pay more. I see that all the time and have returned the favor more than once!
9. What kind of research do you do before an actual auction?
When you find auctions in the newspapers, often they will list the names of the debtors. I have Googled some of these people to see if they live in nice neighborhoods, or what they do for a living. I have found good units this way, but it’s a lot of extra work. Nowadays, I just show up and bid.
10a. Is the outside of the facility or unit important? What do you look for?
Sort of, I try to spend more time at auctions that located in affluent areas. You will consistently see better content at those; of course, the competition and bidding may be higher as well.
10b. What do you look for inside the unit? What makes a unit look promising or something you pass on? How do you determine the value of items in the locker?
I’m looking for units that are neat and organized in appearance. Well-packed boxes that are stacked in an organized manner are usually an indicator of higher-value items. Legend has it that liquor boxes are used to store worthwhile items as well; in my experience this has been true.
In terms of visible items, I love seeing antiques or high-end furniture. Tools are fine, however, with the downturn of the economy, they aren’t selling at a premium right now.
I will say that I have been fooled by units that had rows of neatly stacked boxes, only to find that they were full of clothes and kitchen items. Anytime you’re bidding on what you can’t see, you’re taking a gamble.
11. How much money do you bring to an auction? What does the average unit go for?
I usually bring $4000-$8000. The average units that I see go for around $300-$700.
12. What do need to know legally after buying a unit? Guns? Personal info?
There’s a lot of misinformation on this subject and the laws vary from state to state. In terms of personal info, it’s usually asked that you return sensitive paperwork to the storage facility. This includes tax returns, birth certificates and family photos. They will generally store it for a year and make it freely available to the debtor.
I like guns and seek out units that look like they were owned by an outdoorsman. I have yet to find a single firearm, however, at one recent auction there was a rifle plainly visible when the door went up. It did not appear to be in good shape at all and the unit was full of visible junk and trash. I passed on it.
In Virginia, I’m not required to report any guns I acquire through auctions to the authorities. As a matter of responsibility and good sense, I plan to run the serial numbers, for any firearms recovered from a unit, past the Virginia State Police, just to make sure they’re not stolen.
13. So you won the locker/unit… what next?
Put your lock on it, make payment, and prepare to get dirty! Gloves and hand cleaner are a must! You usually have anywhere from one day to a few days to clear out the contents. Some facilities will allow longer based on the amount of content you’ve acquired. If you don’t have space to store everything, and feel you’ve acquired a really good unit, you can opt to rent it from the storage facility for any amount of time. Often they will cut you a good deal when going that route; many storage businesses only care about having the units rented, even if not at their full rate.
14. How do you estimate the worth of something you find?
I generally do all my research online. If I have items for which I cannot determine value, I will often make a best-guess estimate and put them up for sale. If I think there’s a chance an item could be more valuable than my estimate, I’ll set it aside for further research.
Artwork and jewelry often will fall into that last category, and I have precious metal test kits as well as electronic diamond testers.
15. What kind of moving equipment in needed? Does it change depending on the auction?
When I acquire a unit, I will usually rent a trailer and pull it behind my SUV. I’ll employ day workers or friends to help me load and move the contents. Strangely, I’ve acquired a lot of moving supplies from the units I’ve purchased. I have a bunch of furniture padding, bungie straps, tie downs and all forms of dollies.
16. Where do you go to sell your goods? / How do you sell your goods?
Nearly all of my sales are on eBay and Craig’s List. I’ve made a lot of friends from attending storage auctions and will sometimes drop clothes at a thrift store I’ve developed a relationship with, or send a furniture set to an auction house I’m friendly with.
17. Do you use consignment to sell your goods? Pros or Cons
No. In my opinion it’s too much work for too little return, unless you’re consigning antiques, nice furniture or other high dollar items.
18. Is it important to get to know the other bidders, storage unit owners? Are they friends or bitter competition?
If you’re going to be in regular attendance, I think this will happen naturally. It’s really a matter of your personality. Some folks do not want to discuss any aspect of their experiences, others, like myself, are completely open about everything.
I don’t think a patron would be doing themselves any favor by being anti-social at an auction, even if they’re in business for themselves. Some of the best stories I’ve heard were from the folks I’ve met at auctions. I’ll be doing a blog post about a recent unit that went for $27000. I know they guy who purchased it and he was very open with me about what he found.
Sometimes, I’ll let a friendly regular sift through a unit with me and vice-versa.
19. What kind of treasures or surprising things have you found in storage units?
I have not had any mind-blowing finds in the last year, however, I have had some very profitable units. They are all discussed on my blog, and you’re free to quote my blog posts or reference them in your book.
A few months back I was at a packed auction with probably seventy or so patrons. Most of these folks had to be new and I noticed that units were going to lower-than-normal prices that day. I had no intention of making a purchase unless I saw a really good unit.
One unit that had a lot of contractor’s tools in it was about to go for $200. I couldn’t let that happen and ended up taking it for about $275. Among the tools I found a ton of old baseball memorabilia from the 1950’s and 1960’s. That was a great find and is detailed in my blog post titled “Treasure…when you least expect it.”
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