Author - Travis Lane

Charlie Thomas, former owner of the Houston Rockets and prominent Texas businessman, auctioned off 175 of the vehicles from his private collection on October 20^th. The auction was run by RM Auctions, who sold the vehicles without reserve in the Grapevine, Texas auction.

Thomas's collection was built over 20 years. During that time, he operated more than 40 different car dealerships and amassed an impressive array of vehicles ranging from 1950s antiques to more modern sports cars. Although his collection is still one of the most extensive in the country, the 175 vehicles he trimmed are certainly both rare and valuable. Every vehicle was painstakingly restored and kept in working order, making these vehicles a particularly excellent find for interested buyers.

Admission to the auction cost $80, and bidder registration cost $150. The auction itself ran for nine hours, with a two-hour reception following. According to its website, RM Auctions has been preparing for the event since May, allowing it to advertise widely.

The auction had several vehicles that got a lot of attention:

A blue 1935 Ford Deluxe Three-Window Coupe
A 1954 Ford Skyliner "Glasstop"
A 1962 Chevrolet Corvette Fuel-Injected Convertible
A pair of 1968 Shelby GT500 Convertibles
A 1946 Chrysler Town & Country Roadster which stole the show. This Chrysler, a one of a kind concept car, sold for $143,000.

Overall, his collection showed a preference for classic American cars, including 40 Chevrolets and 80 separate Fords. In addition to the rest of his private collection, the auction also included an Army-green 1952 Willys Military Jeep . All of the proceeds from that vehicle's sale went toward Brookwood Community, a facility for adults with disabilities.

Should I Have a Partner in the Storage Auction Business?

October 18, 2012

There's a reason why most of the bidders on auction shows work in teams, and it's not just to boost ratings with witty banter. Having a partner can make the business much easier. There are several reasons why you might want to consider bringing a partner with you during your auction hunting:

You'll have someone to help you load and unload merchandise. This increases your efficiency and reduces the amount of hard labor you'll need to do. It's also helpful to have someone help you clean out the unit and haul trash, especially if you're working on a tight deadline.
Splitting the cost with someone can help you mitigate some of the risk of bidding. You don't have to worry about losing as much money if you're making a smaller investment, which enables you to take more chances.
An extra set of eyes can help spot valuables. Your partner may also have expertise that can prove invaluable in terms of deciding whether something is worth bidding on.

On the other hand, there are a few drawbacks to working with a partner in the storage auction business. Before bringing someone into your business, you'll want to consider a few of the cons:

You'll have to split profits. In a business with narrow profit margins, splitting those profits even further can make it hard to break even. You'll have to decide whether it's worth it to share your income with a partner.
The other party might set limits on what you can buy or how you can spend your money. While having a second opinion for purchases can be a good thing, it can also be stifling, and it can lead to a lot of stress and arguments.
If you're running a business, you need to consider the other person's role. If auction-hunting is more of a hobby, it won't matter, but you might consider drafting up some paperwork for a business partnership if things get heavy.

Ultimately, the most important thing is to choose a partner who you can trust and will make the job easier. Picking the right partner makes a big difference when it comes to a successful business, and it's not something that should be entered into lightly. Whether you choose to operate as a husband-wife team, team up with your son or recruit your best friend for help, considering the pros and cons of a partnership before entering into one can help save you a lot of hassles in the long run.

Don’t Underestimate The Smalls

October 18, 2012

Of course, everyone wants to be the person to win the next rare antique at auction, but high-dollar items aren't the only way to be successful in the resale business. In fact, small every-day household items can easily make up the bread and butter of your business. It's much easier to make a comfortable profit if you take the time to learn how to sell common small items. These items include clothing, housewares, decorations, knick-knacs, toys, books and much more.

When you're assessing a storage unit and deciding whether to bid, of course you'll look at the major items like furniture, electronics and appliances. Just because a unit doesn't have any big-ticket items, though, doesn't mean you can't profit from it. In fact, many of these units can be an excellent value because others will be unwilling to bid on them, so you can get the whole unit for a very low price.

Once you have the items, the easiest way to sell them is to take them to a flea market or hold a yard sale with them. Even at just $.50 to $1 a piece, these small items add up quickly. A general rule of thumb is to run the items through two yard sales or flea markets to see if they will sell. You can also see if things include scrap metal that could be worth more than the item itself. Whatever is left after that point, you can donate to a thrift store for a tax write-off.

Selling these small, inexpensive items is a good way to add some padding to your business, and it helps keep things moving when auctions hit a dry spell. You might not always be able to find a rare antique or expensive piece of electronics, but you can always find small household items that can be sold for a few dollars a piece. And, if you buy enough common units, it is just a matter of time before you uncover a real treasure that you were never expecting to be there.

Ways To Avoid Losing Your Storage Unit

October 18, 2012

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With so much focus on hunting for treasures, it's easy to forget about a storage unit's original tenant. Many auction hunters rent storage units themselves, though, either to store items they win or for personal reasons. Whether you're working on both sides of the industry or just keep your personal belongings in storage, it's important to take steps to protect your belongings and avoid seeing them at an auction.

Storage facilities don't like auctioning units off if they don't have to. They're in the business of storing items, not selling them, and auctions can be time-consuming and stressful for facility owners. They also generally do not profit from the sales. In most cases, the facility owner will be willing to work with renters. Here are a few tips for keeping your items out of auction if you fall behind on your payments:

Try to make a partial payment, even if you can't pay off everything that you owe.
Offer a settlement to the manager to see if you can negotiate your back rent down to a more affordable price in exchange for you immediately emptying out the unit.
Consider borrowing money from a friend or family member if you know you'll be late; that will keep you from paying late fees.
If you know you're going to be late on your rent, empty out your unit as soon as possible. Most storage facility managers will deactivate your access code and over lock your storage unit in as little as 3-5 days after the due date.

The storage facility will usually give you 60-90 days to make up your late rent before your items go up for auction. Bear in mind that you can pay off your unit at any time up until the auction has finished.

It's important to keep all of your contact information up-to-date. If the storage facility doesn't know your current address, phone number and email address, they won't be able to contact you to let you know that your unit is going up for auction. In some cases, you might not even realize that you're behind on rent unless you're notified. For example, if you pay with a credit card and the card on file is expired, you could lose the unit. Always check this information to prevent problems.

If you do lose your items, you might be able to get some of them back. If you attend the auction, you can approach the person who purchased your unit and request to get back personal items like photographs or tax documents. Many auction-hunters will be happy to give these things back to you if you're polite. Be aware, however, that they're under no obligation to do so, so there's no guarantee that you'll get your personal items back. Last but not least, find out how much the storage unit sold for. If your storage unit sold for more than what you owe in back rent and late fees, you may be entitled to a refund of the overage.

Are you about to lose your storage unit and need advice? Have you lost a storage unit or had to negotiate with a storage facility to get your stuff back? Share your story in the comments section below.

The Waiting Game at Storage Unit Auctions

October 18, 2012

There's usually a lot of waiting to do before an auction. You'll need to show up early enough to get good parking, and the auctioneer could be delayed coming from the last auction of the day. You don't have to consider all of this waiting to be lost time, though. There are several things you can do during this down time that can help your business in the long run:

Stay in touch. If you have a smart phone with Internet capabilities, you can use it to check your email to see if a potential customer has contacted you about something you're selling. You can contact your regular buyers to see if anybody is looking for something specific so you can keep your eyes out at the auction. You can also check in on your eBay auctions or other listings, allowing you to continue running your business.

Network with other buyers. Different people will have different specializations and interests, and you might be able to use that to your advantage. You might find someone who looks for a specific type of item who would be willing to buy those items from you in the future. You could also find out about other sales and get industry-specific information from fellow buyers.

Chat with the facility owner. Being on friendly terms with the storage facility's owner is a good way to get insider information and keep your business running smoothly. You might get some tips about the contents of the storage units, and being a “regular” could earn you some extra benefits, like waived cleaning deposits, if the owner builds up trust with you.

Plan your route. Many auctions often happen on the same day, and you might be headed to another auction right after this one. By taking some time to plan your route, you can save yourself a few hassles. Most smart phones come with navigational apps or Google Maps so it's easy to figure out the fastest way to get somewhere.

By taking advantage of the free time you have between auctions, you can help keep yourself organized and plan your move for the next event. Between planning your auctions and networking with others in the business, you can maximize the benefits of your auction-hunting.

Do I Need a Business License?

October 18, 2012

Storage Auction Laws & Rules

Operating a business without the required license or permit can get you into trouble with the local government, but determining whether you need a license can get tricky. Different states handle laws differently, and some counties or cities may have specific laws relating to licensing that differ from the state's. Making matters worse, different industries have different licensing laws. For example, food-related businesses nearly always require licenses, but non-service industries often do not. Before starting a resale business, it's a good idea to check with your state and local laws to make sure you're running things legally.

There are a few situations where business licenses are always necessary:

Service industries where you perform a service on a customer, such as a tattoo parlor
Food industries where you prepare or sell homemade food items
Any time you request bank financing for your job
Whenever you open a bank account under the company name

In Texas, there is no “general” business license. There are about 250 licenses for different types of occupations, including auctioneer and salesperson. The salesperson license primarily refers to major sales, like cars and real estate, rather than home-based resale businesses, but it's something you should look into before opening a store. Most counties do not have any additional licensing requirements, but you should check with the state of Texas at Texas.Gov to make sure.

In general, a small-scale resale business will probably not require a license, especially if you're operating out of your home. If you're just selling a few items over eBay or Craigslist, you can get by without obtaining a license. Once your business expands or gets its own premises, though, it's generally a good idea to obtain a license to make your business more official. This will allow you to open a bank account and do business under your company's name, and it makes it easier to handle your taxes at the end of the year.

Also bear in mind that even if you don't need a business license, you are legally responsible for a few other things when running a home-based small business:

You'll need a sales tax permit to sell anything in the state of Texas
You need to make sure that your home is zoned for business use
You might need to modify your insurance policy if you'll have buyers in your home

These extra expenses need to be taken into account when starting your business. It's also a good idea to consult with an attorney and a tax professional once your business starts to get serious; they can advise you about the best route to take to protect yourself and keep the most of your money.

The World’s Most Famous Storage Unit And The Guy Who Bought It – An Interview With Philip “Clay” Knight

October 11, 2012

Back in August, you probably heard about the Pensacola storage unit that its former owner, a medical examiner, had left filled with body parts. Although the headline made national news, no one had stopped to get the buyer's side of the story – until now. I had the chance to talk with Philip Knight, the Florida auction hunter who was part of this grisly tale.

At 6'8” and 420 pounds, Philip – or, as his friends call him, Clay – is an imposing figure. A former sheriff's deputy and retired sergeant with the Florida Dept of corrections, Philip developed an interest in storage auctions after watching shows like American Pickers, Barter Kings and – his favorite – Auction Hunters. He's always liked buying, selling, picking and trading, and his retirement seemed like the perfect time to finally pursue those interests.

His first auction turned out to be a bust. Not to be deterred, he decided to give it a second chance, and headed 150 miles to Pensacola to try a few auctions going on there. The first auction he won was full of furniture. Philip was willing to call it a day after that, but his wife urged him to visit the next auction, at a Uncle Bob's storage facility, to see what else they could find.

After eight auctions of regular units, the facility moved to cutting the locks on two climate-controlled units. The first contained synthetic marijuana and bidding was quickly shut down. The other – although no one knew it yet – contained human remains collected by a retired medical examiner.

Of course, that's not what Philip Knight saw when he placed his bid. From the brief glance he got into the unit before the auction started, he made out several nice pieces: a glass-top table, some nice curio cabinets, a gargoyle statue and a new landmower. He placed a winning bid of $900, totaling $1,058 after fees, and set to the task of clearing the items out of the unit.

It wasn't until his wife, Lana, started sifting through the boxes that they realized something was strange about the unit. Inside the first cardboard box was a Gladware bowl containing formaldehyde and a human tongue. Other boxes contained numerous more containers filled with ears, livers and brains. Some were stored in plastic storage containers, but others were in plastic bags and even one Styrofoam cup.

Knowing that the unit had once belonged to a medical examiner, Philip suspected that the body parts might have been preserved for research purposes, but the contents of the boxes still made him uneasy. He explained the situation to the storage facility, which refunded his cleaning deposit, and he and his wife left with the items they had salvaged from the unit.

That was the last Philip heard about the situation until a friend called to ask about the story, which he had seen on the news. He was surprised to hear that the incident was a national news story. Philip has expressed his sympathy to the families who had to be notified about the discovery and who would now have bad memories attached to the situation.

“No body parts in this one, so we're good!”

Fortunately, Philip and his wife got to keep everything else they had won in the auction, so the money spent won't be going to waste. They're holding onto the merchandise for a while in case collectors take an interest in it. He's also requested that he get to keep the medical examiner's badge as a memento after the investigation is over.

I asked him whether this experience had turned him off to the storage auction business, and he said definitely not – as long as he doesn't find any more body parts! He told me that his wife dove right in to opening boxes at the next auction he won, and announced, “No body parts in this one, so we're good!” He's bought several more units since the incident, and he's enjoying his new career as a storage auction hunter.

Who Profits From Storage Auctions?

October 6, 2012

Each year, around 2 million storage units go into default and are auctioned by storage facilities. The average price of a storage unit bought at auction tends to hover around $200, but an influx of novice bidders has caused prices to jump all over the country. Thanks to shows like Auction Hunters and Storage Wars, newcomers to the industry may become over-eager and bid substantially more than a unit is worth, and winning bids of $1,000 or more are not uncommon at many auctions. This is bad news for competing bidders looking to make money in a business that already has slim profit margins, but it definitely benefits both the auctioneer and the storage facility.

Why Do Storage Facilities Auction Items?

First and foremost, storage facilities are in the business of storing items, not selling them. The primary purpose of an auction is to maintain a positive income by keeping as many paid units available as possible. Storage auctions are held to recover the cost after a person defaults on storage unit payments. Holding an auction allows the storage facility to make up the money lost in rent payments, free up the storage unit and get the storage unit cleaned out without needing to do that labor themselves.

In order to be considered for auction, a unit must have gone unpaid for two to three months, and extensive attempts will be made to contact the unit's renter to collect payment. If these attempts are fruitless, the unit will go up for auction.

There are several things the storage facility must do to ensure that the auction is held legally:

They must notify the renter that the auction will take place
They must advertise the auction publicly
After the unit has been auctioned, the tenant's lien is forgiven, unless the unit sells for less than the balance of the lien, in which, the tenant can still be taken to court.

Some storage facilities hire professional auctioneers to handle these auctions. The auctioneers are paid by a commission based on the total amount of the bid. This means that it's always in the auctioneer's best interests for the bidding to get as high as possible. While high bids can be a good thing for the storage facility as well, it can sometimes cause additional concerns depending on the laws governing auctions in that state.

What Happens to the Profits From an Auction?

If the bids are low, the storage facility may lose money on the unit by receiving less than the money owed in delinquent rent. On the other hand, sometimes bids exceed the cost of back-owed rent. In these situations, the excess money is supposed to revert back to the original renter of the unit. In reality, this rarely happens.

It's often difficult to get in contact with the renter; in most cases, the unit went into default because the renter never appeared to pay off the back rent, and this makes contacting them to pay back auction winnings rather difficult. The renter may assume that the phone calls or letters are a collection attempt, or they may simply no longer have the same contact information.

There is also very little legal oversight of the storage facilities to ensure that they're making every possible attempt to contact the unit's renter. The precise responsibilities of the storage facility vary from one state to the next, but many states allow the facility owner to keep any money that goes unclaimed by the unit's original renter. In Texas, for example, the law states that facility owners must send a letter to the renter's last known address. The renter has two years to respond; after that period, the facility is free to keep the proceeds of the auction.

Other states handle this a bit differently. In California, for example, the renter has one year to claim the funds. After that period, excess profits go into an escheatable account in the county where the sale occurred. Many states handle the issue in this way, including Indiana, Michigan and Georgia. Indeed, the Texas law allowing profits to revert back to the facility owner is the minority, although Texas is certainly not the only state that allows it.

Once the money goes into an escheatable account, it's owned by the state. The rightful owner of that money can claim it by going through the local comptroller's office, but these funds often stay unclaimed indefinitely.

Who Profits From Storage Auctions?

Because most states do not allow storage facilities to profit in excess of the lien, high bids on auctions do not benefit the facility owners. In fact, they create more paperwork and logistical problems for the facility owners, who must make sure to consult with state laws, send notices to renters and issue checks to the state. If the facility's owner fails to pay back money that's owed to the state, they may get into legal or tax trouble. In states like Texas where profits can be retained, high-bidding auctions are more attractive to storage facilities, but they still create extra hassles as the owner attempts to contact the original tenant.

Ultimately, the person with the most to gain from an increase in bidding is the auctioneer. Even bearing this in mind, overpriced auctions will ultimately have a bad effect on the auctioneer if they cause auction attendance to fall. Regulars, realizing that the bidding may get too high, might stop attending auctions, and this would damage the entire industry.

The best choice for everyone is always to bid fairly and conservatively. This helps to keep things competitive for bidders and stimulates growth in the industry, and it keeps hassles down for everyone involved. It also helps make it easier for professionals to continue making conservative profits on their wares without striving for the often-inflated numbers seen on TV.

Storage Auction Fees

October 5, 2012