It seems so desperate!
January 6, 2011 5:13 PM   Subscribe

I've recently (sadly, I might say) started watching Storage Wars on A & E. Outside of the slightly gameshow aspect of the program, can anyone tell me anything about buying and flipping defaulted storage units? It seems fascinating beyond the trashy staged feel of the TV show.
posted by codacorolla to Media & Arts (15 answers total) 11 users marked this as a favorite
Check out Act 1 from this This American Life:
Needle In A Crapstack.
If you don't pay the rent on a self storage unit, eventually all of your stuff can go up for auction. But the people bidding aren't allowed to dig around. They just peer in from the outside with flashlights, guessing where there are valuables. Jon Mooallem visited auctions in Northern California, and learned the surprising techniques people use to tell junk from treasure. Jon writes for The New York Times Magazine. (16 minutes)
I don't remember anything specific from it other than it was pretty interesting and it was the first thing I thought of when I saw the preview for "Storage Wars".
posted by Ufez Jones at 5:19 PM on January 6, 2011 [5 favorites]

There is a segment in this episode of This American Life which talks about it.
posted by cabingirl at 5:20 PM on January 6, 2011

posted by cabingirl at 5:20 PM on January 6, 2011 [5 favorites]

Heh. Great minds, cabingirl.
posted by Ufez Jones at 5:28 PM on January 6, 2011

Best answer: When I lived in florida a couple years ago, one of the guys I worked with also owned a pawn shop. The vast majority of his money was made pawning, he had like a 90% buyback rate from his lendees. However, as it was very near Eglin airforce base, there were literally storage places all over the place, and this guy went a couple times a month to storage unit auctions. He did very well, but he only bid on units that looked like they might contain high dollar items...sporting goods, tools, etc. He never ever touched diamonds or jewelry, because in that particular area they were a dime a dozen, he literally had shelves full of them in his safe he couldn't move.

Near one house where I lived, a guy had a yard sale literally every single weekend, and I could never figure out how he had so much stuff. I stopped once, and it was all manner of housewares and family stuff, like photo albums and picture frames and stuff. I asked him how he could stand to part with all of it, and he said they weren't his he really didn't care. I assumed divorce or something, but he went on to tell me he bought storage lockers and sold the contents in his yard. It was very sad---entire family photo albums and stuff. The crappiest part about it was that they were mostly military families.

So...that's some anecdata for you. Kind of.
posted by TomMelee at 5:36 PM on January 6, 2011 [2 favorites]

The key for me from the TAL episode was that they just open the door and you bid. You don't get to dig thru to see if there is anything good, so you rely on hunches and hope you don't get stuck with a unit full of junk that you have to pay to throw away.
posted by smackfu at 5:39 PM on January 6, 2011

Best answer: Growing up, a close friend's parents owned a storage unit place, which started as a mere 60 units, and blossomed into triple that and five different sites over the years, probably more now. People keep a lot of junk. Seriously. The storage units break down like this: 25% people storing valuables or possessions temporarily, such as people moving long distance, storing furniture for a few months, cars, etc. 1-2% people doing something illegal: meth lab, stolen goods, living in a unit. 73-74% hoarders. A lot of the stuff would be poor quality furnishings that they might (read: never) use in the future, children's toys and clothes, etc. The packrat mentality ran huge.

Probably monthly they would have an auction. If a given unit wasn't paid for or closed out, they had to go through a formal legal process to notify the owners, but usually within 90 days the units were officially abandoned. 30 days worth of notice, 30 days after that for abandonment, plus a couple of weeks overhead. The rules are the same in most states with varying time periods. The notices for an auction are put up in a local paper much like any other auction. They (my friend's parents) would always do a quick check in all of the units for anything obviously valuable or anything they wanted in particular before the auction.

They would have the auction day at a site once they had enough individual units to make it worth bringing the auctioneer, and it went pretty damn close to the way the show does. Open the unit for five minutes to look but not touch, then auction to the highest bidder. The bidders tended to be the same regular group of guys doing the buying, with a handful of outsiders who came to see if they could find anything. Of the regular buyers, some were scrap metal guys who could look at a pile of metal and tell you within $5 what all of the metal was worth per pound and what kind. There were some guys that specialized in antiques and could look in a unit see an early MAD magazine in mint condition and know exactly what he could get out of it. Others were a mix who could do a bit of both and squeeze a living out of it. Most of the auctions were on the same couple of days, so the buyers could run around buying for a couple days a week, and move the rest of the week. Once they've bought, they usually have 30 days to clear it.

Conversely, some units went negative, albeit not often. Basically no one would want anything in the unit, or it was dangerous for one reason or another, typically the biohazards. The auction would reverse to "who will clean this mess up for the lowest price?"

The strategies the guys used were knowing the values of virtually everything available. They are extremely well practiced. The people who were outsiders would inevitably get outbid. If they didn't get outbid, the regulars would bid them up to double the value to get them out of the auctions. And much like the TV show, they all know each other and who will bid on what.

For my friend's parents, the auctions were more of a necessary evil than anything. Most units that wound up abandoned usually had little of value. The owners would have pulled everything good out. The profits from the auctions rarely outdid the actual profits on a paying unit after the overhead: no rent for four months (30 notice, 30 abandonment, 30 for the buyer plus overhead), legal notices out, county filings, newspaper ads, paying the auctioneer.
posted by Mister Fabulous at 5:44 PM on January 6, 2011 [21 favorites]

Response by poster: Awesome answers so far!
posted by codacorolla at 6:45 PM on January 6, 2011

Best answer: My parents and I used to go to these sales to try and find items for the auction house they owned at the time. In my experience, I never saw one go for more than $500 but we lived in a small town in Arkansas so that's not surprising. It's a lot of fun to go through a unit you just purchased, but you are responsible for moving everything out within 24 hours so you have to be prepared to store it yourself somewhere, throw it away, or sell it quickly. We always looked for neater units and if we spotted food items we always passed. You'd be surprised how often people pack up their entire houses, including the food, and you run the risk of bringing roaches or other pests into your own home.

We've found everything from a $25,000 record collection to a laundry basket full of dirty clothes that looked like they may have been "soiled." I once found a still shrink-wrapped copy of Madonna's Sex book which I sold for nearly a $1000 on eBay. Of course you want to go to the storage places in the nicer areas, but you'll have more competition there. To find out about the auctions just call up a local storage place and tell them you want to be put on the storage unit auction list. They will send you a flyer about a week before the sale saying date and time. If nothing else, you should go just for the experience of the sale and not even feel pressured to buy anything. Good luck!
posted by Ugh at 12:25 AM on January 7, 2011 [1 favorite]

Best answer: My wife and I deal antiques occasionally, and I've been to storage unit auctions but never bought anything; we prefer farm auctions as our grave-robbing. My wife likes those shows, and one thing Wifey has talked to me about this is that Storage Wars and Auction Hunters is that they don't show the amount of work involved in going through the storage unit. You've got 24 or 48 hours to clean out a garage-sized space (or two or three, if you had a good day) and move everything to your own place. Hopefully, that means you've got trucks and strong helpers and two or three garage-sized spaces to move it to; it is entirely possible that, if you can't move it, you can pick up the rental fee and keep the stuff in the locker for a month or two, but that's money out. Plus, if you spend $500 on a unit, and sell three or four things for $1000, you made good profit but you've still got a zillion unsellable things in your storage space. Do you pay for a dumpster? Run your every-weekend-rummage sale? Do you haul it down to the thrift shop and donate it? All of that takes a lot of work -- the TV shows only show the fun stuff, finding something cool and making money off it, but that's quite literally a needle in a haystack. You're still left with a haystack after you've found the needle.

I like Auction Hunters better, because they actually have some useful tips. The big thing would be: you want to sell things ASAP. You don't sit on anything, even if it'll mean more money, because you need the space and you need the cash. That means having a network of buyers you can rely on. For example, I know a used furniture guy here in town who pays $10 for a used couch. Now, that's not a big amount of money, but if I ever clean out a storage unit and it has two couches in it, I know what to do with them. If I ever bought a unit and was stuck with two couches, I'd be screwed because they'd take up room that could be used for valuable things.

Lastly, Wifey says that Storage Wars does a good job of getting across the pressure and stress of an auction environment: it goes fast and you're risking a lot to keep bidding; it's easy to get stuck with crap (as happens sometimes on the shows) if you're too caught up in it.
posted by AzraelBrown at 5:03 AM on January 7, 2011 [4 favorites]

Best answer: I used to help run these type of auctions in Portland. Mostly the units were full of junk, once there was a unit full of dead cats. The same people came out to bid every month. Occasionally a unit would go for a few thousand but mostly a few hundred. The storage company always lost money on the units. If they found meth supplies, they'd hide it so they wouldn't have to deal with the EPA. I got a washer for $10 once though and it lasted for 8 years. All in all it was usually just sort of gross with a dash of weird and some sad if it involved a lot of kids stuff. Oh! The original unit folks would sometimes show up to try and buy their stuff back which could get awkward.
posted by yodelingisfun at 6:35 AM on January 7, 2011 [2 favorites]

This is probably not an operation for the casual weekend treasure hunter. You will definitely need extra manpower and a good sized truck and trailer to move a storage locker haul. Not to mention the storage space required for an average sized locker. One locker could fill your garage.
posted by JJ86 at 7:14 AM on January 7, 2011

Response by poster: Just to clarify I have absolutely no intention of ever doing this, but thanks for the great answers. I'll leave the question open in case anyone else wants to reply.
posted by codacorolla at 10:22 AM on January 7, 2011

"...but that's quite literally a needle in a haystack. You're still left with a haystack after you've found the needle."

You know, AzraelBrown, that's a really interesting thought, and it applies to a lot more of life than just the matter at hand. I think I found my idea to ponder for the weekend...
posted by wenestvedt at 10:51 AM on January 7, 2011 [1 favorite]

Response by poster: If anyone's still reading there is one thing I'm confused about:

If you're in serious financial trouble and are having stuff repossessed, and some of that stuff is in a storage unit that someone buys at auction, what can the collection agency do about that?
posted by codacorolla at 1:01 PM on January 7, 2011

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