This article was written by attorney Robert J. Kossack who was accompanied by Scott Asher on a trip from Las Vegas to San Francisco to argue a case before the U.S. Ninth Circuit Court of Appeals
Cable TV shows like Storage Wars and Storage Kings impress me by all the neat stuff bought for cheap at storage locker auctions. At times those guys make twenty times their investment, and everyone on the show is a winner. It seems all I need do is put some cash together, keep up with the storage foreclosure auctions and get off my duff. After all, you see the guys on the shows score big nearly all the time, and I could pretty much outbid any one of them and buy whatever storage lockers I wanted to buy if I were so inclined.
In this regard, I had an opportunity to interview the host and namesake of the website storagelockers.scottasher.com. Scott’s bought more than 500 storage lockers. I also interviewed the manager of the storage locker facility where I rent a couple of storage lockers. It’s one of those national franchise storage locker chains, and I think the manager has a piece of the action.
I found out you can still make money buying storage lockers and selling their contents, but it’s work, and there was much more money to be made before the publicity from the cable TV shows starting bringing fifty people to each auction instead of five. Sometimes there would be only two buyers at an auction with one saying to the other, “How about I take this one and you take the other?” But now an average storage locker is selling for three times the amount it would have sold for just a few years back. That means you’re taking the chance of losing three times more money if you buy a dude.
You would think this would make the manager of the storage facility happy being able to earn extra money toward the unpaid rent with a lot more bidders, but he rather it return to two years ago when the cable TV shows were just coming out, and the bidders were only slightly larger in number. He would rather avoid the present mob of know-nothing saps littering his parking lot, not knowing the rules, crowding up the corridors and giving him a lot of worry and argument. First and foremost, buying storage lockers is work because you have to learn of the sale, go there, run the risk of not making a buy, pay the man, pay the manager a deposit, clean out the locker, haul everything away, have a place to store all the good stuff, have a way of disposing of all the worthless stuff, and then actually sell the good stuff you’ve found.
The storage locker place makes you clean out the locker to freshly swept condition and haul everything away. The manager will hate you otherwise. You would be banned from stepping foot on that self-storage property ever again, and the manager would tell the other storage locker managers about you, put your name on the computer as someone who they should otherwise charge an extra large deposit or trespass on sight.
After you’ve paid for the storage locker itself, the manager makes you pay a deposit that you forfeit if you don’t clean out the storage locker entirely and leave any junk behind. The amount of the deposit is generally between twenty and thirty-five dollars depending on how much effort it would be for the manager to remove and dispose of the worthless junk. A ten foot by thirty foot storage locker filled with car engines and other hard to remove items might merit a deposit as high as $300.00. The manager will raise your deposit considerably if you were ever a problem. If the manager is left with a locker where the high bidder simply made off with the good stuff and left the rest, the manager will likely resale the remaining stuff in the locker privately or to another bidder at another auction. Nothing would require him to send out any additional notice. At that point the manager doesn’t care how much he gets for the locker just so long at the stuff is hauled away.
You can’t use the manager’s dumpster, and you may find it hard to use someone else’s dumpster. The dumpster behind the grocery store near where I live has a sign citing the criminal law you would be violating if you use that dumpster without authorization. So you are stuck filling up trash cans and hauling them to the curb in front of your house or hauling everything to the dump and paying the dump a fee.
The cable TV shows only cover when something neat or valuable is found. You wouldn’t be interested in watching the shows if all you saw was the winning bidder opening up dozens of boxes finding nothing or if the camera stayed on him as he continued unloading the storage locker, loading up his truck and hauling trash to the dump, or even sitting around the swap meet for a day. With the higher prices the lockers are going for now days, the amateurs are being squeezed out. Now you need a bigger, more committed operation. You need your own dumpster. A freelancer has to rely on luck. A pro has a truck, a crew, storage space, disposal facilities and a store where the stuff is going to be sold. Cutting out all middlemen and having an efficiency of scale allows him to make a living. Do you really want to go into the salvage business? Count on tiring, tough work unless you hire other people to supply the muscle to clean the locker of all its contents and move all the items, some to the warehouse and some to the dump.
Based on the website host’s survey of the more than 500 storage lockers he purchased in Las Vegas, ninety percent of all foreclosed storage lockers had some sort of narcotic paraphernalia in them, usually marijuana paraphernalia, which led the website host to the conclusion that a lot more people smoke marijuana than will admit doing so in response to an anonymous survey. But don’t expect to find a bag of weed. It’s already been smoked. You just get enough paraphernalia with enough residue to be guilty of a misdemeanor. It’s probably the first thing you’ll throw away even if you smoke pot yourself.
Also, ninety percent of all storage lockers contain some form of pornography or sex toys. Looks like society is a lot more free and experimental in those areas as well. Of course, the counter-argument could be made that the storage locker statistics prove that people who use dope and crave sex are more likely to be irresponsible and lose their storage lockers to foreclosure. Which conclusion does the storage locker data support; that every household smokes grass and views porn or, as a second conclusion, that people who smoke grass and view porn are irresponsible?
The least desirable thing to find in a storage locker is cremated remains. There’s just something about throwing old granny’s ashes in the trash along with the other junk that gives one the chills. Which led me to question why not take those items which are personal, irreplaceable or involve a hassle to replace, such as cremated remains, the baby’s teeth (yeech), locks of hair, family photographs, birth certificates, old tax returns, driver’s licenses, health cards, divorce decrees, death certificates and the like, put them all in one small box and then try to locate the owner at a later date and sell him back his personal papers and effects? Back on his feet or finally reminded he at one time actually had a storage locker, a man might be willing to pay considerable money to get back the photograph of his great, great, great grandmother.
I found out that’s definitely a bad idea. Don’t try to do any favors for or make any money from the prior owner of the storage locker. One of the website host’s friends did that; he convinced the storage facility manager to give him the last owner’s address and took the box of personal effects out to the prior owner to give it to him for free. For his trouble, he ended up being screamed at by the entire white-trash family for buying all their stuff and taking all they had, and he was almost physically assaulted before he was able to get back in his car and speed away from the ingrates. He was just trying to be a nice guy. I hate to think of the family’s reaction if he tried to sell them back their personal stuff. It’s best to just shred the documents and throw everything in the trash, and tell no one what you did with any of it. That’s why the storage locker manager isn’t suppose to tell you the name and address of the prior owner, but that information can sometimes be found in the personal papers left in the locker. The manager especially will not tell a person who bought their locker so the person who lost their stuff can hassle the person who bought their stuff for some of their stuff back. Don’t ask about or concern yourself with the personal affairs of loss of the prior owner or try to help the prior owner. No good deed goes unpunished in this arena.
About one-half the time you should make a profit from a locker if you put in the time to sale everything of any value. But what is the cost and the value of your time? How many hours will you have to sit around the swap meet to sell that basket of sex toys? Do you want to wear gloves when you handle them? How many hours will it take you to photograph some of the items found and write a description of them for sale on Ebay or at an auction? Do you value having any garage space left at your house? Is it okay if your entire house fills with clutter you someday hope to sell? Each year, with more people watch the cable TV shows with most of the lockers yielding valuable or historically interesting stuff. They then go down and bid up the price of storage lockers beyond what they would be if only the bidders knew how a majority of lockers turn out to be a bust. With each new bidder, the ability to make a decent hourly wage buying storage lockers at auction and selling their contents becomes less and less. There is also the possibility of the storage locker manager being a crook. You have to make sure you see the prior owner’s lock being cut off the locker. If the lock is already off, then the manager had a chance to loot the locker of its valuables before it went up for sale. But what’s to stop a manager from looting the locker and then putting on a new lock which he cuts off in front of the auction buyers just for show? This is not a common practice, but how is one to know? It’s against the law, but how are you going to prove it?
The website host had found his share of goodies and “wow factor” stuff such as an antique music box, an autographed Anne Nichol Smith calendar, two thousand dollars of cash in a sock, but he gave up buying storage lockers. Too much moving, too much hauling, too much time selling, decreasing sales prices on Ebay because of the recession combined with three times the purchase price of the abandoned storage locker from what it was a few years ago, and the easy profit has been squeezed out. This is what my economics teacher taught me to expect. When there are excessive profits in any one area of the economy, increased competition will be attracted, in this case more buyers at each auction, and the increased competition will squeeze out the excess profits, until those previously kicking back counting their easy money become mere working stiffs surviving through hard work and increased efficiency rather than because of an exclusive market share. The days of easy money buying storage lockers has come to an end, and it’s time to find a new racket. Guess I’ll keep my day job.