As man of you know, I’m obsessed with the show Storage Wars. I’ve been watching it like crazy since Baby $ was born (‘cuz they replay them back to back to back in the middle of the night), and lately I’ve been REALLY itchin’ to pull the trigger and go out and see what it’s all about in real life.
Is it really as easy as it is on TV? Can I too score some massive amount of treasures off just a couple hundred dollars??? I’m sure the answers to both are “HAH! Good luck with that,” but I’m a man who needs to experience things first hand before backing away ;) The only major thing standing in my way right now? I
have had nooo idea where to even begin on where to go, and what to do when I got there.
So as always, I Googled and I happened across a pretty killer site called Storage Treasures. I plugged in my zip code on where I’d be interested in hitting them up, and they kicked back a dozen or so storage units who all do auctions every few weeks – pretty much solving that half of the equation in a matter of seconds :) Next was the HOW.
Do I just show up with my money and get to bidding? I know on the show they say you can only bid with the cash in your pockets (no going away and hitting up an ATM, etc), but other than that, are there any other kinds of rules or laws to follow? I poked around the site a bit more hoping for some inside knowledge to spill out (two of the co-founders I found out are Dan & Laura Dotson, who as you know are the auctioneers on Storage Wars), and came across their newsletter which pretty much promises to make you a pro if you pay attention. So naturally I signed up ;)
And a couple of days later – voila! I get this KILLER email sent to me on the Top 10 Things You Need To Know about storage auctions, and it was *exactly* what I was looking for. So much so that I emailed the author of it, Leslie, and asked permission to re-post it here today so y’all can learn along with me :) Maybe it’ll help anyone else looking to get in on the action too?
Here it is, courtesy of my new best friends, Leslie and the entire Storage Treasures team:
1. What to Bring
The necessities are a valid id, money, a flashlight, and padlocks. The sky’s the limit from there. A hat & sunscreen are a must for me. And water & snacks. If you plan to bid you’ll want tools to a) inventory your unit (like gloves & a box cutter), b) empty your unit (a vehicle, someone to help, ropes etc) and c) to clean your unit (garbage bags & a broom). You’ll need to empty the contents to get your cleaning deposit back, but a quick sweep will go a long way with the facility manager.
2. Learn About Sales Tax and Resale Licenses
Facilities are required to collect sales tax on units sold at auction but lucky for you, many facilities don’t know this. Be sure to find out whether it’s collected so you can adjust your bid. Don’t get caught off guard. Your $100 bid could quickly become $120 with sales tax and a premium. You still have options though. With a resale license (issued by your state) you don’t pay sales tax when you win units, only when you resell the stuff inside.
3. Find Out If There’s Entrance Fees or Buyer’s Premiums
Usually you can walk away with all your money in your pocket if you don’t win a unit. Some facilities, however, are now charging an entrance fee simply to enter the auction – normally $5-$10. Other facilities have begun collecting buyer’s premiums. This only applies if you win a unit, which is then collected at the end of the auction. But it’s important to calculate it into your bid amount. You don’t want to come up short when it comes time to pay the lady.
4. Call to Confirm
The local storage manager isn’t always available to answer the phone, so it’s best to try to call a day or two before the auction. Also ask how many units are going to auction. If it’s 1-3 there’s a better chance the auction might be cancelled. But also a better chance there’s a light crowd. So if the facility is close by, it might be worth stopping by to scope out the situation. You can also ask the manager if they think any of those people are going to pay up. Often managers know if the tenant has moved & they don’t have any way of notifying the tenant their unit is even delinquent. Or they may be in communication with the tenant and know the tenant plans to pay up before the auction. But always, always, ALWAYS call to confirm.
5. Show Up Early to Register
Usually 15 minutes will suffice, but remember – it’s better to be early than miss the auction. Extra time will also give you a chance to ask the manager what information they have about the units and their former tenants, as well as asking the other bidders about their businesses too. It’s also a good idea to chat with the auctioneer so he knows who you are.
6. Check to Make Sure It’s a Live Auction
The vast majority of storage auctions are live auctions. A handful of facilities, however, also do silent auctions. They usually have viewing hours throughout the week, take bids written on a piece of paper, and then answer the highest bidder at a specified day and time. Silent auctions can be a great way to get units really cheap, but as you can imagine, there is room for insider dealing because only the facility sees all the bids.
7. Don’t Forget About The Cleaning Deposit
If you purchase a unit, you will usually be required to pay a cleaning deposit to ensure you empty the entire unit. It varies, but this will usually be around $25-$50. In certain instances it might be worth forgoing your deposit to save yourself the time of emptying the rest of the unit. But be careful, the facility will not look too kindly on this. Try to find another bidder at the auction that will maybe take the stuff off your hands.
8. Keep In Mind The Time to Vacate
You usually have 24 to 48 hours to empty the unit, but some facilities will ask you to vacate that same day. Don’t be afraid to ask for more time if you need it. And if you want to keep the items in the unit for a short period of time, negotiate a highly discounted short term rental. Just remember that this cuts into your profits.
9. Educate Yourself
Just like with anything, you can either wing it and rely on chance, or prepare and do everything within your ability to succeed. Utilize the resources available to you. Read our past emails, learn from our Auction PRO Contributors, ask your questions on our forum, and later check out our video training that will take things to a whole new level. And of course get out to some auctions! If you think you’d be too tempted to buy, leave your money at home and just go watch. Your hard earned money is on the line, so it’s okay to take it slow the first times around.
10. Have fun!
Regardless of why you are there, storage auctions are fun. So is refurbishing things and selling them for a profit. But decide whether it’s a hobby or a business because that changes things. For example, are you factoring your time invested? You might decide you enjoy it & it’s better than going to the gym so you’re not concerned about the time. Or you might decide you’d rather be fishing & if you’re going to do this it’s got to be worth your time. Just think it through because this will affect what units you buy and how you resell.
Pretty good stuff right? I like that last part about figuring out WHY you’re interested in storage auctions to begin with. Personally, I just want to go EXPERIENCE it and see what the whole thing’s about. If I ever did spend some money and buy a unit, it would 100% be considered for entertainment purposes kinda like playing the lottery – at least at first. If I get good at it I can’t promise it wouldn’t supply my new consignment venture, haha… You need a good outlet so you can UNLOAD everything, right? :) You can’t make a profit if you don’t sell anything to anyone! Which is probably one of the main reasons people don’t give it a shot – you have to figure out what to DO with all that stuff if you win!
Either way though, it definitely makes for good TV :) And hopefully I’ll be back here soon telling y’all how my first experience went. I don’t know if I’d have the balls to throw down some money the first time around, but I guarantee it’s just a matter of time until I do. The whole thing just fascinates the crap out of me.
How about you guys? Anyone else like this stuff too? Or even better – anyone else BUYING UP storage units themselves? I wanna hear about it if so! Daddy needs some more tips!
Photo credit: rasdourian
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!