Retailers look for deals as more people fall behind on rents at storage facilities
Mike Dehaas, of Martinez, uses a giant flashlight to search through the contents of a defaulted storage locker at A-1 Mini Storage in Santa Rosa. Dehaas attends dozens of storage auctions a month and sells his finds on eBay.
Last Modified: Sunday, April 26, 2009 at 9:14 a.m.
Outside a self-storage unit, a crowd of bidders lines up for one brief look over well-kept furniture, a vintage bicycle and other items packed neatly inside the Santa Rosa storage facility.
Bidding starts at $100 and quickly escalates as a handful of the buyers join in. Within a few minutes, the contents of the room are sold for $320 to Mike de Haas, an online retailer who drove 60 miles from his home in Martinez to attend the Santa Rosa auction.
He is part of a growing industry that has sprung up in the Bay Area to buy and sell the stuff that people don’t want or can’t afford to store anymore.
As the economy worsens, more and more people are falling behind on their rents at self-storage facilities. And just like people who lose their homes in foreclosure, the end result is the same: the loss of once-treasured possessions they can no longer afford.
“That’s the sad part about this,” de Hass said.
The number of storage-unit auctions held in Northern California has increased 10 percent over the past year, estimates John Cardoza, owner of Storage Auction Experts, a Turlock firm that conducted last week’s auction in Santa Rosa.
But the number of bidders has jumped 40 percent, Cardoza estimated, as buyers try to capitalize on another’s misfortune and turn it into income. The buyers purchase items they hope to quickly resell to other bargain hunters at thrift stores, flea markets or online at sites such as eBay and Craigslist.
Cardoza predicts the number of auctions and bidders will both increase over the next six months to a year.
“That’s definitely a reflection of the economy,” Cardoza said.
On a single morning last week, Cardoza’s firm conducted more than 20 auctions at four self-storage sites in Santa Rosa.
Proceeds are shared between the auction company and the self-storage facility, but rarely cover the amount of unpaid rent, said Kerry Ishmael, operations vice president for a company managing several Santa Rosa self-storage sites.
“Our delinquency rates have gone up. Our auctions have gone up,” Ishmael said. “We don’t want to sell stuff. Very rarely do we get all our costs covered. It’s a loss for the customer, and it’s a loss for us.”
But it’s a gain for retailers who resell belongings they pick up at storage-unit auctions.
More than 50 buyers turned out for the four Santa Rosa auctions, well above the dozen or so that typically appear. They traveled between the self-storage sites in a procession of trucks, vans and cars.
The promise of multiple sales in one morning led San Anselmo thrift store owner Tisha Bevilacqua to make the hourlong drive north.
“I knew if I didn’t find something in one place, I would find it in another,” she said.
Working on a tight budget, Bevilacqua spent $70 for a small storage unit packed with brand-name clothes she figures will bring up to $300 at her store, Tisha’s Thrift. For a winning bid of just $5, she snagged an automatic baby swing that might fetch $50, the one saleable item in a nearly empty storage unit.
“There is real money in this. It’s an investment in time and money, but you will make money,” said Jeff Palk, a Sebastopol retailer and regular on the self-storage auction circuit. “For me, it’s a livelihood.”
Retailers trolling storage-unit auctions aim to meet demand from shoppers looking for bargains as the economic slowdown saps their spending power. They sell used furniture, clothes, housewares, tools and other assorted items through Web sites or on eBay and Craigslist. Many also sell at flea markets, some from storefronts and warehouses.
To succeed, retailers need to buy low and sell high.
“There’s a market for anything. But you’ve got to do your due diligence. You’re not going to make money if you’re not selling the right stuff,” de Haas said. “You can lose a lot of money in this business if you have a gambler’s mentality.”
Buyers look for quality and like goods neatly boxed or stored well. Piles of stuffed plastic bags and items in disarray often draw little bidding.
While they hope to come across a wealthy individual’s valuable effects, more often these buyers find odds and ends featuring a few marketable items.
What buyers can’t resell ends up in dumps. Tracking what sells and for how much therefore is critical, particularly as more retailers try to make money reselling used items.
“We’re seeing way more people are scrambling to make a buck. There’s a lot of resellers. These people aren’t stupid,” Palk said.
Bid amounts reflect the often narrow margins. Cardoza said winning bids at his auctions are averaging about $160.
Storage-unit auctions are speedy affairs requiring quick minds.
A minute is maybe all the time a buyer has to assess a storage unit’s contents. Many carry spotlights slung across their shoulders to survey items inside the usually darkened units, and step-ladders improve the view.
All transactions are cash only, including cleaning deposits. Buyers must carry multiple locks because they take ownership of everything inside, and typically have 48 hours to clear it out.
“You’ve got to take everything out of the locker — the good, the bad and the ugly,” auctioneer Ken Kennedy said before one of the Santa Rosa auctions last week.
Self-storage managers may allow more time if a buyer returns personal papers and photos that may be important to the individual whose belongings were auctioned.
Storage-unit rentals and auctions are regulated by state laws. A minimum of two warning letters must be sent to tenants after rents are past due. Auctions follow more than two months later.
Auction lists are whittled down in the weeks and days approaching the public sale.
“Tenants do become current more often than not,” Ishmael said.
Some tenants make last-minute payments to avoid auctions.
“A lot of times, people don’t pay until they absolutely have to. The tenant owns it until I say ‘sold,’
” Cardoza said.
The $320 bid at the Santa Rosa auction netted de Haas estate-quality furniture in good condition, including a hutch, desk and cabinet. What truly caught his eye, though, was an older model 10-speed bicycle in decent shape bearing a 1967 city of Berkeley license. That alone could sell for nearly as much as he paid for everything in the storage unit.
“You want to see quality. You can make a living at this,” de Haas said.
-- You can reach Staff Writer Michael Coit at 521-5470 or mike.coit@pressdemocrat.com.
<p>Outside a self-storage unit, a crowd of bidders lines up for one brief look over well-kept furniture, <NO1><NO>a vintage bicycle and other items packed neatly inside the Santa Rosa storage facility.</p><p>Bidding starts at $100 and quickly escalates as a handful of the buyers join in. Within a few minutes, the contents of the room are sold for $320 to Mike de Haas, an online retailer who drove 60 miles from his home in Martinez to attend the Santa Rosa auction.</p><p>He is part of a growing industry that has sprung up in the Bay Area to buy and sell the stuff that people don’t want or can’t afford to store anymore.</p><p>As the economy worsens, more and more people are falling behind on their rents at self-storage facilities. And just like people who lose their homes in foreclosure, the end result is the same: the loss of once-treasured possessions they can no longer afford.</p><p>“That’s the sad part about this,” de Hass said.</p><p>The number of storage-unit auctions held in Northern California has increased 10 percent over the past year, estimates John Cardoza, owner of Storage Auction Experts, a Turlock firm that conducted last week’s auction in Santa Rosa. </p><p>But the number of bidders has jumped 40 percent, Cardoza estimated, as buyers try to capitalize on another’s misfortune and turn it into income. The buyers purchase items they hope to quickly resell to other bargain hunters at thrift stores, flea markets or online at sites such as eBay and Craigslist.</p><p>Cardoza predicts the number of auctions and bidders will both increase over the next six months to a year.</p><p>“That’s definitely a reflection of the economy,” Cardoza said.</p><p>On a single morning last week, Cardoza’s firm conducted more than 20 auctions at four self-storage sites in Santa Rosa.</p><p>Proceeds are shared between the auction company and the self-storage facility, but rarely cover the amount of unpaid rent, said Kerry Ishmael, operations vice president for a company managing several Santa Rosa self-storage sites.</p><p>“Our delinquency rates have gone up. Our auctions have gone up,” Ishmael said. “We don’t want to sell stuff. Very rarely do we get all our costs covered. It’s a loss for the customer, and it’s a loss for us.”</p><p>But it’s a gain for retailers who resell belongings they pick up at storage-unit auctions.<NO1><NO></p><p>More than 50 buyers turned out for the four Santa Rosa auctions, well above the dozen or so that typically appear. They traveled between the self-storage sites in a procession of trucks, vans and cars.</p><p>The promise of multiple sales in one morning led San Anselmo thrift store owner Tisha Bevilacqua to make the hourlong drive north.</p><p>“I knew if I didn’t find something in one place, I would find it in another,” she said.</p><p>Working on a tight budget, Bevilacqua spent $70 for a small storage unit packed with brand-name clothes she figures will bring up to $300 at her store, Tisha’s Thrift. For a winning bid of just $5, she snagged an automatic baby swing that might fetch $50, the one saleable item in a nearly empty storage unit.</p><p>“There is real money in this. It’s an investment in time and money, but you will make money,” said Jeff Palk, a Sebastopol retailer and regular on the self-storage auction circuit. “For me, it’s a livelihood.”</p><p>Retailers trolling storage-unit auctions aim to meet demand from shoppers looking for bargains as the economic slowdown saps their spending power. They sell used furniture, clothes, housewares, tools and other assorted items through Web sites or on eBay and Craigslist. Many also sell at flea markets, some from storefronts and warehouses.</p><p>To succeed, retailers need to buy low and sell high.</p><p>“There’s a market for anything. But you’ve got to do your due diligence. You’re not going to make money if you’re not selling the right stuff,” de Haas said. “You can lose a lot of money in this business if you have a gambler’s mentality.”</p><p>Buyers look for quality and like goods neatly boxed or stored well. Piles of stuffed plastic bags and items in disarray often draw little bidding.</p><p>While they hope to come across a wealthy individual’s valuable effects, more often these buyers find odds and ends featuring a few marketable items.</p><p>What buyers can’t resell ends up in dumps<NO1><NO>. Tracking what sells and for how much therefore is critical, particularly as more retailers try to make money reselling used items.</p><p>“We’re seeing way more people are scrambling to make a buck. There’s a lot of resellers. These people aren’t stupid,” Palk said.</p><p>Bid amounts reflect the often narrow margins. Cardoza said winning bids at his auctions are averaging about $160.</p><p>Storage-unit auctions are speedy affairs requiring quick minds.</p><p>A minute is maybe all the time a buyer has to assess a storage unit’s contents. Many carry spotlights slung across their shoulders to survey items inside the usually darkened units, and step-ladders improve the view.</p><p>All transactions are cash only, including cleaning deposits. Buyers must carry multiple locks because they take ownership of everything inside, and typically have 48 hours to clear it out.</p><p>“You’ve got to take everything out of the locker — the good, the bad and the ugly,” auctioneer Ken Kennedy said before one of the Santa Rosa auctions last week.</p><p>Self-storage managers may allow more time if a buyer returns personal papers and photos that may be important to the individual whose belongings were auctioned.</p><p>Storage-unit rentals and auctions are regulated by state laws. A minimum of two warning letters must be sent to tenants after rents are past due. Auctions follow more than two months later.</p><p>Auction lists are whittled down in the weeks and days approaching the public sale.</p><p>“Tenants do become current more often than not,” Ishmael said.</p><p>Some tenants make last-minute payments to avoid auctions.</p><p>“A lot of times, people don’t pay until they absolutely have to. The tenant owns it until I say ‘sold,’<TH>” Cardoza said.</p><p><NO1><NO>The $320 bid at the Santa Rosa auction netted de Haas estate-quality furniture in good condition, including a hutch, desk and cabinet. What truly caught his eye, though, was an older model 10-speed bicycle in decent shape bearing a 1967 city of Berkeley license. That alone could sell for nearly as much as he paid for everything in the storage unit.</p><p>“You want to see quality. You can make a living at this,” de Haas said.</p><p>-- You can reach Staff Writer Michael Coit at 521-5470 or mike.coit@pressdemocrat.com.</p>