Thursday, December 9, 2010

Storage Auctions Part 2 - Kissing Frogs

Yes, you read that right. Kissing frogs. That's what it's like. You've all heard the fairy tale about the princess who had to kiss a frog before he turned into her Prince Charming.

Of course, in all likelihood she had to kiss more than one frog to find him. Probably several frogs. Ok, lets get real.... she had to kiss a zillion frogs to find her prince. Let's not forget her sister, who was looking for that same prince. She kissed a bunch of frogs too. But only one of them found her prince. The other one just found frogs.

I bring this up because I was watching Storage Wars last night. It's a fun show, and exciting too. But there were lots of Princes, and not many frogs. It was amazing to me that they didn't show any frogs. What I'm concerned with is the term "Reality TV".

I don't think it is really reality. In reality, there are frogs in the storage auction business. Lots of frogs. There are many, many units that have nothing but frogs - no princes. But you won't see that on TV - not very exciting, is it? The truth is that you're not very likely to buy a unit for $125, and find a million dollar comic book collection hidden by the $25,000 Harley that's sitting on top of that rare coin collection. 

You're likely to spend $125 and find $300 worth of things to sell. And you'll have to sort out the good stuff from the frogs. And then you'll have to get rid of the frogs. And the EPA likely has a "frog disposal tax". In other words, have realistic expectations of what you will find.

You're there to make money. Buy things at a good price, and sell them at a better price. But you are not going to get "lucky" with every unit. Most buyers will never get that "hidden treasure" that they can retire from. You will likely buy some units that will bring you hundreds in profits, and occasionally thousands. You will sometimes break even, and some times, yes sometimes, you will lose money.

But if you stick with it, and learn a little from each unit you buy (or don't buy), you'll get better. Over time, and once you have spent lots of money on units, you'll get better at making money. If your profit expectations are realistic, you won't often be disappointed.  At Schur Success Auctions & Appraisal, we find that our most successful storage auction buyers here in Colorado have very realistic expectations.

If you are new to this business, keep your hands in your pockets until you learn the ropes. (Look at our previous blog discussing the rules). And, maybe, just maybe, you'll kiss a frog that turns into a prince. But if it were me, I'd rather not kiss a bunch of frogs. I'll pass, and if I choose to kiss a frog, I'll be prepared for it to stay a frog.

No comments: