Category - Storage Auctions 101

I know that it's not easy to believe, but you can find some extremely valuable items in storage units. In just the last year alone, I have found gold in storage units four times. The first time, I hit the jackpot. There was a safe that contained 5 jewelry boxes full of gold jewelry among other things. Two of the times I found a single piece of gold jewelry and another time, I found a small jewelry box with about seven gold & diamond rings in it.

That same year, I found 2 shotguns, a rifle and an antique pistol from the 1880's. I have found some cash a few times but in most cases it was less than $300. I have spoken with people who have found larger sums of cash in storage units that contained illegal drugs. I have even spoken with someone who found a skeleton in an ice chest. In situations like these I recommend getting the proper authorities involved.

The moral of the story is that you never know exactly what you are going to get and that you have to take the good with the bad. But, if you are persistent, you can acquire some incredible possessions and at the some time make a healthy profit reselling items purchased at auctions.

I recently received the following question from a new member named Brian.

Hello Travis,

I just signed up and got the list. On the list, some of the locations have "The location above is selling xyz item". How do they know this? Should we be worried if they know whats in it?

Brian,

That's a great question. Storage facilities in the state of Texas are required to provide a brief description of the contents of the storage unit in the legal notice that they publish. Some storage facilities choose to ignore this as they do some of the other requirements in Chapter 59 of the Texas Property Code, but we won't get into that at this time.

Once the storage facility has made several attempts to contact the tenant for payment, with no success, they will cut the lock and usually inventory the contents of the storage unit based on what they can see from the door. Very rarely do they ever move things or open boxes.

Should you be worried about this? Not really. Most storage facility managers & owners are very honest and respectable people. I'm sure there are a few bad apples, as there is in any business, that do enter the unit and remove the valuables before the auction.  However, if you are only bidding on what you can see from the door, what may have been removed from the unit will not effect you.

I hope this answers you question and alleviates your concerns.

Recently, some of our new members were embarrassed to ask what they thought were some really dumb questions like "can anyone attend storage unit auctions?" or "do I have to pay an entry fee" or "do I need a special license to buy a storage unit?" Since everyone who uses this blog is at a different level in the learning process, I want everyone to feel comfortable to ask anything you like, no matter how basic you think it is. Remember, the only stupid question is the one you don't ask.

Basically, anyone can attend a storage unit auction. Children under 16 years of age are discouraged by some auctioneers and facilities due to the liability; although, this is rarely enforced. There are no special licenses needed. Every now and then, you may need to show valid state identification, although this is rare as well. If you are planning on reselling the items that you purchase and you have a sales tax use permit, by all means bring it. If you don’t have one, you can apply for one on the Comptroller's website or you will need to pay sales tax on any storage units that you buy.

There are no upfront fees charged to attend an auction. All you need to do is arrive before the sale begins and sign in on the sheet located in the facility manager’s office. Some facilities & auctioneers may require you to sign an acknowledgement of the rules and a waiver of liability. We were all beginners in the storage auction business at one point. Most of the facility managers, auctioneers & the other buyers at the event will be happy to answer any questions you may have, so don’t be afraid to ask.

The following article is a guest column.

Are you one of those people who thoroughly enjoy treasure hunting? Well, you are definitely going to love the newest trend in making money: storage locker auctions. This new fad has sparked numerous reality TV shows and is spreading throughout the United States like you wouldn’t believe.

On one reality show the storage locker contained a collector’s all-chrome 1976 Harley Davidson Liberty Edition motorcycle, along with several boxes of never before opened Sarah Coventry jewelry, and an assortment of Avon products including jewelry, perfume and brand new make-up. So, needless to say, the buyer had a great day after paying a mere $130.00 for everything in that unit. Most of the “treasures” sold immediately at a flea market and on E-bay. Result: $55,000 from an investment of just over a hundred bucks.

Another success story was of first time buyer who knew very little about storage auctions, but decided to try it out. After shelling out $800 for two units ($300 for one and $500 for the other) she was ecstatic to find a camera with four different lenses and all of its accessories, an antique pistol, and a 1950s-style Coca Cola vending machine, and a pair of Italian leather boots, all of which were not visible until entering the units after the bidding. Result: $7,500.

Featured on other episodes, buyers have found a Superman comic book collection (that totaled a $1 million value), collectable cars, baseball cards, Fender Stratocaster guitars, gold watches, antique coins, vintage furniture and expensive jewelry…just to name a few.

So who leaves this stuff in storage units?

Many people living in apartments or who have downsized from a large home to an apartment find it necessary to get a storage unit to house the things that won’t fit in the limited space. Sometimes, for reasons unspecified, these storage units go unnoticed and left for years. Explanations may vary: maybe they couldn’t pay the rent; maybe they move frequently like military personnel and have no way to transport the items; maybe the owner passed away or is serving time in prison; or maybe they just forgot. But many times, the content owners have rented the units to store large items while they find an apartment.

Storage unit auctions are growing more and more popular every day. Whether you attend an auction held by the owner or try your luck online, there are hundreds—maybe even thousands—of unclaimed units just waiting for the highest bid. But with the online auctions, you may not always hit as big as if you attend in person; before the bidding begins you may take a few minutes to assess what’s inside without actually entering the unit. You’ll want to bring flashlights since most of these units have little or no light. Once all bidders have glanced into the unit, the bidding wars begin. Afterward, experts of this trade usually divide the contents of their units into piles for trash, items to donate, items to keep and items to sell.

It's a Business

Storage unit auctions have taken off with reality TV and people are getting interested, forming strategies for how to approach the units. For example, the ones who found the Harley—they were first-time bidders, no less—have since traveled to suburban storage auctions in search of tractors, snowmobiles and saddles; they’ve learned to line up certain items for interested buyers and then hold their own auctions. Pretty innovative, right?

No matter where you live or what kind of business you’re in, this ever-growing new hobby is a great way to make money. If you choose to begin attending storage auctions, make sure to do your homework first to learn as much as possible before you jump in with both feet. Know the laws and rules as they apply to the auctions. Make a list of the items you are interested in and stay organized, because before you know it, you could be swimming in a river of rags or enjoying your new found riches

The following article is a guest column.

Television shows like Auction Hunters and Storage Wars have turned the masses on to the money-making potential held within storage auctions. By attending these auctions, people can bid on the units and re-sell the contents for a profit. If you’re looking to maximize your profits but are wondering how to tell if a unit is worth your time, here are a few tips.

Educate Yourself

Many regulars at storage auctions have backgrounds in antiquing and furniture resale. They have an eye for goodies that can only come with years and years of experience. If you’re like many of us, you don’t have that background. But don’t let that get you down. There are many television shows, web sites and magazines that teach all about antiquing and how to discern a priceless artifact from a hunk of junk.

Let There Be Light

At storage auctions, you are allowed to stand outside of the unit and look in. Most of the time, the storage units are not lit so you will want to bring a flashlight to make sure you can get an idea of what is inside each unit. This will let you get at least a decent view of the items held within, which will help you determine if the unit is worth your bid.

Old Doesn’t Mean Valuable

When you’re looking in at the unit and you see a lot of old items, that doesn’t necessarily guarantee that there will be anything valuable amongst the other old items. It might just mean that someone had to clean out grandma’s house and this was the best place to dump her old junk. Instead, look at quality. Are the items held within in good shape? Also, quality of the containers can be an indicator of value. If there is a safe that appears to be locked, that should be a good indicator that there might be something interesting in the unit. If everything is in crushed cardboard boxes, you probably shouldn’t waste your time.

For those of you who are new to the storage auction arena, there are things you need to know in order to be prepared for your next storage unit auction. These are just a few tips that could save you time & money and help you avoid a great deal of frustration.

On a good day in larger cities, there might be several different storage facility companies having an auction. Always print out your auction list at least a day in advance. Our service allows you to print out the storage auction list for the entire week. This gives you time plan a route for the auctions you want to attend. After you have your route planned, I recommend that you call the facilities to make sure that the auction hasn't been canceled. Some auctions get called off if the tenants get current on their past due charges before the scheduled auction date. Nothing is more aggravating than arriving at the storage facility, only to find out that the tenants paid at the last minute.

It is a good idea to bring your entire auction list along just in case you have to make a detour. If an auction gets canceled or there are just too many other buyers in attendance, you can quickly find another auction to attend.

You've heard the old saying that the early bird catches the worm, well, it's true. Always try to be at least 15 minutes early to an auction. This will give you time to sign in & possibly ask the facility manager questions about the units for sale and the delinquent tenants. Another good reason to get an early start is that you don’t want to miss an auction because of traffic or other delays. Most auctions start early in the morning and they usually begin at the time advertised. Also, early auctions typically have fewer people in attendance because of morning delays and because, quite frankly, some of your competition likes to sleep in.

If you will be attending a series of auctions in a day, go ahead and fill up your gas tank in advance. I also recommend that you bring some food and drinks with you. Some of the auctioneers move so fast, from one location to the next, that if you have to make a pit stop, you could miss out on a unit or two.

I recommend that you keep multiple padlocks with you and to keep some back ups in your car. On average, 3-4 locks on your person, will probably be sufficient for most people. At my buying peak, I kept about ten locks with me at all times. Color coding or numbering your locks & keys can save you a lot of time as well. Nothing is more frustrating than trying to find the right key for a lock, after you just purchased a unit, and the crowd has moved on to the next unit. Some of these facilities are like mazes, if you fall to far behind, you can even lose the crowd completely.

If you plan to attend storage auctions on a regular basis, you should purchase a quality, rechargeable flash light. I cannot stress this enough, this can make the difference between losing and making money in this business. I purchased a high intensity discharge, rechargeable flood light for about $30 and it has more than payed for itself.

Several months ago, I saw a really interesting unit which had high end furniture and a flat screen television stand in it. I couldn’t believe that the television wasn’t in the unit. The auction was about to close and at the last minute something caught my attention in the back of the unit. I shined my flood light on it and instantly, I knew that it was a 55 inch Samsung LCD television. I raised my bid by $25 and I won the unit for $325. My competition hadn't seen the television because their flash lights didn’t emit enough light or because they didn't bring a light with them at all. That television was less than a year old and had a retail value of over $1,700. Plus, I made over a thousand dollars reselling the furniture. Not bad for a day at the auctions.

Most rechargeable flood lights even come with an adapter which allows you charge you battery in between auctions. Believe me, you will need it. Another reason to avoid traditional flashlights is that battery powered flashlights lose power quickly and replacing batteries every day can get expensive.

If you buy a unit and you are planning on moving the contents the same day, you should bring a dolly, trash bags, a wide push broom, latex gloves, rope, tie down straps, moving blankets, tarps, boxes, plastic storage containers & even a set of bolt cutters.

Bidding on a storage unit is not always as easy as it appears to be. The once simple task of purchasing a storage unit at good price has become a war of the mind. I wrote this article to help you understand the psychology behind the tactics that others employ to intimidate and discourage you from buying a unit. You may even decide to to use some of these tactics yourself, but if you do, keep in mind that it can backfire on you.

The most important factor in bidding on a storage unit is knowing how much to bid. Knowing the retail cost of merchandise isn't enough, you have to know what second hand merchandise sells for in a competitive market. Add up what you think you can resell everything for, divide it in half and then subtract moving & labor costs. This will help you determine your maximum bid and allow room for profit. Once you have set your cap, stick with it. If the bidding exceeds what you feel the unit is worth, walk away.

Some buyers get their emotions involved in their bidding, especially their pride. You must avoid impulsive buying and getting caught up in the chaos of the bidding process. If you're going to be successful in the storage auction business, you must realize that most of the tactics that others employ aren't personal, it's just business. If another bidder pushes your buttons, don't try to retaliate, it will just end up costing you money in the long run.

Jumping bids

If the bid amount is still fairly low, you may decide to call out an amount well over what the auctioneer was asking for. This strategy can catch others off guard and cause uncertainty. You may be able to discourage other buyers by making them think that you will continue to out bid them.

Waiting until the last minute to bid.

This is a pretty effective strategy if used properly. Basically, you let the other bidders fight it out while you wait quietly in the background. If the bid is still below you're cap, you make a bid right before the auctioneer says “sold”. This strategy, similar to jumping the bid, also catches the other bidder off guard and causes uncertainty. This can really work to your advantage if the other bidder is at or near their bid limit. Because they are now faced with a new competitor, the opposing bidder may just give up.

Slowing your bids

If it's a heads up bidding match between you and another buyer, act like you're unsure if you want to proceed any further. Wait until right before the auctioneer says “sold” before placing your next bid. This is a great way to break the other buyer's spirit by getting his hopes up, then disappointing him. If you do this a few times, the other buyer may start to question if the unit is really worth it.

Bidding high

A reckless but bold tactic; bidding high can sometimes get you the locker you want without a fight. This is how bidding high works. Once the auction begins, you place your maximum bid from the start. Since other bidders aren't expecting the bid amount to reach that level so quickly, it can cause confusion and your bid might be uncontested. If you use this tactic often, you might be labeled as reckless, but if it helps you win the lockers you want, that reputation might be worth having. The main drawback to using this method is that you might overpay.

Talking a unit down

Pointing out the negatives and making others think you aren't interested in a unit can be an effective strategy in smaller crowds. When there are numerous buyers present, there is no way you can communicate with all of them so there is really no use. If you use this tactic, you may want to point out the condition of merchandise or or how much work it will be to clean out the unit.

Reducing the auctioneer's bid increments

If the auctioneer starts the bidding in hundred dollar increments, you should try reduce the increment to a smaller amount as early as possible. Keep in mind that it is in the auctioneers best interest to keep the bid increments as high as possible. This may be difficult to do with some auctioneers, but doing so can help you buy the unit at a better price.

Bidding others up

In my opinion, this tactic is poor etiquette. Although some of the self proclaimed “storage auction gurus” & storage auction reality show stars advocate this type of behavior, it ends up hurting us all in the long run. This tactic is essentially based on revenge or an attempt to limit the competition's ability to purchase another unit.

Ever since the premier of the storage auction reality shows, new buyers have turned out in record numbers. Because of this, it has been difficult to purchase a storage unit at a reasonable price. Some of the old timers are resentful toward new buyers because the new buyers have ambiguously effected their income. Their mentality is “If I can't get the unit, then I'm going to make whoever does pay for it.”

The other theory is that if you can get your competition to spend more money on a unit, they will have less money to spend on the next. Some people even use this tactic to cause others to lose money while hoping that they will get discouraged and not come back to the auctions.

Either way, bidding others up is a bad idea. The whole point of attending an auction is to make money. Just remember, “what goes around comes around.” If you run others up, don't be surprised when they drop a unit on you. There is nothing worse than having to pay a fortune for a unit you didn't even want.

Pretending to bid others up when you really want the unit

This strategy makes your competition feel like you are intentionally running them up, which may cause doubt as to whether the unit is really worth it. The whole point of this strategy is to get the other buyer to feel like they dropped the unit on you. Once again, running others up or acting like you are running others up is a bad idea. If you do run others up, don't make it obvious. Once you are known for this type of behavior, people are going to return the favor ever chance they get, and that is the last thing you need if you are trying to make money at an auction.

Double teaming your competition

This can be an effective strategy if used correctly. If you have a spouse or friend with you at the auction, double teaming your competition can work to your advantage. The other bidders are watching your body language. If you pretend that their bids are way too high by shaking your head or walking away, it can cause doubt in their minds. Right before the auctioneer says “sold”, have your friend or spouse pick up the bidding. You may just get lucky and win the unit.