In most states, storage facilities are required to hold public lien auctions. This means that the auction must be advertised and open to the public.
The purpose of this is to provide the tenant with ample opportunity to reclaim his property, and also to ensure that the belongings are disposed of and not simply pocketed by the storage facility.
However, this is not necessarily the case in every state. Moreover, these laws are not always upheld. Because there is little legal oversight of storage auctions, quite a few of the smaller and privately owned facilities opt not to hold public sales at all. Instead, they’ll have a few dedicated buyers who routinely take their items, usually for a preset price.
You’ll often find out about this by cold-calling facilities and asking about their auctions. If they tell you that they don’t hold auctions or have “a guy” who handles their abandoned units for them, then you know that they’re using dedicated buyers. You might also notice that some storage facilities in your area never seem to hold auctions; you can follow up with them to confirm your hunch.
Once you’ve determined that a facility in your area doesn’t hold public auctions, you have a choice. You can either take it off your list and focus on other facilities, or you can try to become “the guy” who handles their delinquent units.
Doing so can be quite profitable as there is no competition. On the other hand, you might also end up with a lot of units that you don’t know what to do with. Since you can’t just walk away from a unit like you could at an auction, you have to be prepared to take home a lot of junk items.
In order to become the go-to person for the storage facility, you might need to build up a relationship with them. It helps to be friendly and courteous, of course, and it may also take some time to form a good business relationship and get them to trust you enough to invite you into the fold. Persistence definitely pays off.
Being a facility’s dedicated buyer can have some benefits, but it can also put a damper on your other auction attendance. It’s also not strictly legal in some states. It’s up to you to decide whether the benefits outweigh the drawbacks so you can make the choice that will work for you.
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