Tuesday, June 2, 2009

Storage Auctions – NOT a “get rich quick” scheme

We had an interesting phone call yesterday. Someone was asking questions about storage auctions. That's not so unusual. We get those calls every day. This call lasted more than ½ hour. She was asking great questions, like "how can I make thousands of dollars on each unit?" and, "Who will help me move all the heavy stuff?"

The good news is she listened and asked lots of questions. She learned that it's not a slam dunk.

Here are a few key tips to being successful at storage auctions:

  • You won't make thousands of dollars on each unit. If you buy right, you'll make a few bucks.
  • You won't make your money overnight. You need a place to sell your stuff, and people to buy it. That means Craig's List, E-Bay, Garage Sales, Yard Sales, and other similar outlets.
  • Not everything you buy is worth money. You're buying things other people have stored, and then didn't pay for. Maybe they hit some trouble and couldn't pay for their prized possessions. Maybe they chose not to pay because their stuff wasn't worth the rent. You won't know until you go through every box, bag, drawer, and item.
  • You'll throw a lot of stuff away. Think about who's going to help you carry it, where you will dump it, and what dumping it will cost you.
  • You can't see everything you're bidding on. You're not allowed in the unit, so you should bid on what you can see. Is there a Ferrari hiding behind the boxes? Maybe. Probably not. I wouldn't bet on it and neither should you.
  • I don't need a lot of money to get started. Maybe, define "a lot". True, some units sell for $5. Some sell for more than $5000. On average, a decent unit will cost you around $200, maybe more. And you'll have to put up a cash deposit for your unit, usually $50 for the first unit, and $100 for 2 or more, at each location. Do the math. You buy three units, and two different locations in a day. That's $600 for the units, and another $150 for the deposits. That's $750 in a single day. And it is all cash. NO checks, NO credit cards, and no, you can't go to the ATM. Cash in your pocket, when you bid. Don't worry. Get all three units cleaned out in the next 48 hours, and you'll get your deposit back.
  • There's more details to think about, such as "Where am I going to put this stuff?", and "Who will help me move this stuff?", and "do I have a big enough vehicle to haul it all?". Answer those questions and you're on your way.

The good news is that you can make some decent money buying storage units, and there are bargains to be found. But it's not a "get rich quick" plan. It's a business plan. Buy the units smartly, go through them thoroughly, sell them well, and you can make a profit. We have sold almost 700 units in the past six months, so someone is making a buck or two. And yes, sometimes you'll find that coin collection, or that nice Rolex watch, or a case of DVD's that have some value. That's the fun.

As a bonus, the folks who go to storage auctions are great people. Our advice is to come and watch a few auctions before you ever bid. We have over 100 locations, so you should be able to find one close to home. Leave your money at home the first time or two, that way you can't make any mistakes bidding. Then venture out and buy a unit or two. It's a treasure hunt, and you'll enjoy it if you do it right.

Still have questions? Ask them. We're glad to help.

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