At storage unit auctions, bidders hope to strike treasure

Fifteen minutes before the storage auction is about to start, the crowd is small. Then, a man in a black leather jacket, dark-brown cowboy hat and boots strolls out of glass double doors at the back of the office building that sits at the front of PayLess Self Storage in Richmond. He is the auctioneer.

Forrest O’Brien, of California Storage Auctions, stands ready to start the bidding. He has a contract with PayLess to run the company’s auction every second Friday of the month at 10 a.m. O’Brien was supposed to call three other auctions that day, one in each of Oakland, Castro Valley and Fremont.

Some of the crowd will follow O’Brien for the entire day, attending all four scheduled auctions.

Self-storage facilities lease out space—units, lockers or rooms. People store their personal belongings in their unit and use their own lock on the door. When people are overdue on their storage rent, the contents of their lockers can be auctioned off. There is a regular crowd that comes to bid on the contents of those lockers, sight unseen. Some people frequent these auctions in order to fill their thrift stores with goods, but most come to hunt for treasure. They are hoping to find that one priceless heirloom that will bring them a windfall of cash.

The California Self Storage Facility Act—the lien law of California—lays out the exact rules that need to be followed. At PayLess, the owner of the unit is usually first notified when they fall 14 days past due on their rent. The owner is continually notified every couple days until 63 days have passed. When an owner is 63 days overdue on their rent the unit can then be put up for auction; after that point, it is up to the facility to decide how long they want to wait before selling the unit.

“We usually wait till a customer is three, four, five months behind before we even get to that level,” said Shale Butler, property manger of PayLess. “I’m kinda soft and reasonable. I’ll accept as little as 10 or 20 percent of what they owe to hold them out of auction.”

“We try to work it out the best we can by offering extremely generous deals,” Butler said. His faded brown hair is streaked with grey, and he has the face of someone younger than his 31 years. “We don’t like selling their stuff. It’s a horrible thing to do. My employees make fun of how nice I am to people. My conscience is a little thicker than the average person’s.”

PayLess Self Storage in Richmond is one of the largest facilities in the Bay Area.

According to the Self Storage Association in 2009, there were about 50,000 self-storage facilities in the US with about 2.22 billion square feet of rentable space. PayLess, a privately owned company, is one of the largest storage facilities in the Bay Area. The facility has about 1,900 units—the size of about four or five normal facilities. The giant facility is comprised of three separate buildings and is a little bigger in size than Oakland’s Oracle Arena.

PayLess is currently at about 90-percent capacity. The facility usually auctions off between 10 and 15 units each month, but February 11’s auction was a smaller crop. “I had a lot of people pay up and our last auction was toward the end of January,” said Butler. “So there wasn’t a lot of time in between.”

Tenants have the right to pay their bill up to one minute before the auction starts to save their possessions from being sold. In PayLess’s front office, two women sit at the front desk. Their names, Quinn and Roberta, are stitched onto their PayLess Self Storage polo shirts. The waiting room is barely large enough for three people to fit in. A man stands in the waiting area, talking to Butler across the desk.

“I was actually taking a payment while the crowd was standing there at 9:59 a.m.,” Butler said. But the auctioneer doesn’t have to worry about any of the technicalities. He is there to sell.

Auctioneer Forrest O’Brien grew up in Texas, surrounded by cattle auctions. His father was a trucker and brought a young O’Brien to truck auctions every week. “I always wanted to sell,” O’Brien said. His black leather jacket is quilted across the shoulders and on the elbows. A white rectangle stitched across the back reads “Harley-Davidson” in thick black letters. His eyes are covered by black Ray-Ban sunglasses, kept in place by a black nylon cord circling the back of his neck. Toothpicks are stuck in the brim of his cowboy hat. His handlebar mustache is neatly groomed and perfectly in place. A tan leather wallet sticks out of his back pocket; attached to his crisp dark jeans with a gold chain.

Butler peeks out from the office’s double doors to check in with him. O’Brien can’t begin until he gets the final unit count of how many units are to be auctioned off that day from Butler.

Auctioneer Forrest O’Brien (center) arrived at PayLess Self Storage in a black leather Harley Davidson jacket, black Ray Ban Sunglasses and a dark brown cowboy hat with toothpicks stuck in the brim. O’Brien’s tan leather wallet sticks out of his back pocket, attached to his crisp dark jeans with a gold chain. His handlebar mustache is neatly groomed and his long hair just barely peeks out from beneath his hat. Worn-in brown leather cowboy boots complete the look.

With all the pay-ups complete, Butler tells O’Brien there are seven units that need to be auctioned off. “So that leaves us with: Uno, dos, tress, cuatro, cinco, seis, seven,” O’Brien counts off. “Let’s Boogey Woogey! Let’s go. We’re burning daylight here.”

The crowd follows Butler a few feet across the main driveway of the facility and into a narrow walkway. Only about three feet across, the walkway is lined on either side with what look like small garage doors. Each door is a separate storage unit. The lock of the first unit on the right is cut and the door pulled up.

“When we open the door, if I can see firearms, long guns, handguns, ammunition, drugs, drug paraphernalia or hard alcohol, those items do not go into the sale,” O’Brien says. “Once a while you’ll open a unit here and there’s a motorcycle in it. Can’t sell that either. You simply can’t go, ‘Oh here’s a motorcycle! Oh, you can buy that for 10 bucks!’” O’Brien shouts, pretending he’s the buyer of a $10 motorcycle.  He continues, “Then you go down to the DMV and want to register this bike. They run the number. It’s stolen! Guess what? You’re handcuffed right on the spot!”

It’s illegal to auction off drugs, drug paraphernalia or hard alcohol in California. Any type of vehicle—motorcycle, car, boat, boat trailer, jet ski or ATV—with a State of California control or VIN number on it cannot be sold at auction until the facility has checked the vehicle to make sure it isn’t stolen. Once the storage facility staff has verified ownership of a vehicle, they can auction it off at a later time. The same process is observed for firearms.

“We have an attorney,” says O’Brien, assuming the voice of a lawyer. “‘Oh yeah, you can buy anything. We’ll this ain’t LA! This is NorCal, pal! Norcal! We’re fair and square here. We do it by the letter of the law and that’s how it works.”

The crowd packs into the narrow hallway behind Butler. Everyone is anxious to take a peek into the first unit up for auction. Most people come prepared with flashlights, large and small, to help them see into the dimly lit lockers. Everyone is allowed to take a long look at the contents of the unit, but there are strict rules for how to behave at an auction. Entering the unit or touching anything inside it is forbidden. Boxes cannot be opened, or anything moved to get a better look. The bidders must bid on the unit as a whole. They cannot just pick out those items they want to buy.

“As we go unit to unit, do remember people, do not go into the unit, kick things or open things,” O’Brien shouts over the crowd as they start to walk toward unit number one. “Get your best guess and dream from the outside.”

When someone wins a unit in a storage auction, they are buying the whole lot, but not everything in that unit automatically becomes the property of the buyer. Personal documents or information— military IDs, drivers’ licenses, birth certificates, death certificates, social security cards—are of no value to the new buyer and could be used for illegal activities like identity fraud. Any such personal information should be returned to the storage facility. The facility then attempts to return the personal documents to their owner.

The storage facility must “hold that stuff for a window of time, whatever the California law says,” O’Brien says, referring to customers’ personal effects. “Then they shred it or burn it. Destroy it.”

But Butler says many customers don’t’ come back for their personal things. “Usually they’ve disappeared; they’re gone; they don’t respond,” he said.

The first unit up for auction is full of furniture: plaid couches, black patio chairs, mattresses and delicate wooden bookcases. Sealed cardboard boxes line the walls.

Because it’s packed with stuff, the unit is instantly popular among the bidders.

O’Brien starts each auction the same way: “You tell me,” he asks the crowd. “Opening up bid, bid, bid.” A hand is raised or a quick shout is heard over O’Brien’s continuous stream of speech. The numbers quickly increase—from $25, to $50, $75, $100.

Dan Lepez, a storage auction regular, stands at the back of the circle. Wearing a hooded maroon windbreaker and carrying a small three-legged folding chair, Lepez is ready for anything the auction might bring, including bad weather or long waits. He raises his hand slightly, signaling he wants to bid on the unit, whose price has already soared up to $575.

“He says YES at $600!”  O’Brien shouts. “That’s the pepper! $625 bidder? $625 bidder? Yes or no? Gotta go! All done all through?” O’Brien drags out the last word, giving the crowd one last chance to bid if they want to. With no answer, O’Brien calls it. “Sold right there, sold right there!”

Lepez has won the unit. He gives O’Brien his bidder number—five—and waits for his receipt. At the end of the auction, Lepez will take his ticket to the front office to pay for his container.

Before the auction began, every bidder had signed in at the front the office, putting down a $50 security deposit, which would be returned to them if they did not buy a unit by the close of bidding. For anyone who does purchase a storage container, the deposit is returned once their unit is completely empty and clean.

When people are overdue on their storage rent, the contents of their lockers can be auctioned off. “We try to work it out the best we can by offering extremely generous deals,” said Shale Butler, property manager at PayLess. “Because we don’t like selling their stuff. But unfortunately we are in business to rent storage units for money not to give them away for free.”

“You’re bidding on everything that’s in there,” O’Brien reminds the crowd. “Good stuff, bad stuff, garbage, valuable things you may see and hope that’s in there. It’s all gotta be emptied out and moved.”

Storage auctions are cash only. Lepez, who attends 10 to 15 storage auctions each month, knows to bring plenty of cash. Lepez is from Forestville and has been attending California auctions for about 10 years. Lepez sells everything he finds at the Monte Rio Flea Market or donates it to the homeless. “Probably one out of 10 we make a good hit,” Lepez said. “We got a couple of containers [today] that have locks on them. So we are excited to get them home and see if there is anything in there that might be the ‘wow factor’ for us.”

In recent months, America has been captivated by that wow factor. In the final months of 2010, two reality shows—SPIKE’s Auction Hunters and A&E’s Storage Wars—premiered on TV; both are centered on those who buy storage units for a living, reselling what they find to make a profit.

The recent popularity of these shows has caused crowds at storage auctions across California to swell. Before the shows started, average attendance at auctions was between 12 and 15 people, says O’Brien. Today, “The crowds have gone unbelievable: 331 people, 250 people, 180,” O’Brien says. “Last month when I was here, we had 97 people sign in. It’s substantially increased, because of, ‘I saw it on the reality show, maybe there’s opportunity here, maybe I’ll find something extremely valuable—crystal, a jewelry box, collectibles, antiques.’”

Buying storage units in the hopes of finding treasure has also become a popular side business for many in this tough economic climate, O’Brien says. “There’s a lot of opportunity in these facilities,” O’Brien says, “to purchase a unit and maybe turn it into a little bit of revenue to keep things moving along. And it does happen occasionally that somebody will get one that is very financially rewarding. Better doing this than playing the lottery.”

The bidding continues, and O’Brien auctions off another couple of storage units. Braedon Galloway, an Oakland resident, purchases unit five, then negotiates the crowd parked in front of unit six. He is trying to get a good look inside, to decide if he should bid.

Galloway, a storage auction regular, leans over, large yellow flashlight in hand, to get a better look at the boxes that litter the floor of the unit. Galloway is over six feet tall with a long dark blond ponytail hidden under his backwards bright orange hat.

He’s been lucky before: In January, Galloway paid $100 for the PayLess “junk unit.” After cleaning everything out and going through every box, Galloway not only found a $3,000 diamond ring, but a $500 pool cue as well.

But recently, Galloway has attended fewer auctions. Galloway and his business partner opened Flavor Brigade, an Italian water ice shop in Oakland, a little over a year ago. “The store is really starting to pick up,” Galloway says. “Today I have off so I could come to this auction. But it’s just me and my partner doing all the work. I try to make all the [Italian water ice] during the day while I’m working, but it’s just getting too busy for me to do that.”

Galloway ended up buying unit six—not nearly as popular or promising-looking as unit one—for $65. Boxes of records were stacked up against the back wall, and after buying the unit, Galloway flipped through them, calling out what he finds. “Motown. Disco. Thelma Houston. Anyone know who Thelma Houston is?”

A small dark green suitcase, covered in dust and marked “Bibles,” is tucked into the front corner of the container. Galloway stands up and glances around the small space. Nothing is screaming out to him as a valuable find, so he walks out into the hall, pulls down the large metal door and secures it with a padlock. He joins the back of the crowd, already moving on to the next opportunity.

On Friday, Feb. 11, the final unit to be auctioned at PayLess Self Storage, number seven, sold for $1475. It was the most expensive unit of the day.

It’s the last unit of the day at PayLess Self Storage: Unit number seven. “Last chance to dance coming up down here,” O’Brien says as he led the crowd toward the final container. “If we’re going to dream, let’s dream big.”

The lock is cut and the door thrown up. O’Brien hears “ooos” and “ahhhs” from the crowd. The unit is packed to bursting. “FINALLY!” O’Brien shouts after a day of sparsely occupied rooms.

The ten-by-eight-foot unit—the big seller of the day—goes for $1,475.

With the auction over, everyone slowly makes their way back to the front office to pay their bills or pick up their security deposit. Galloway produces a large white envelope filled with cash. Counting out the correct amount, he hands the wad of bills to one of the workers sitting behind the desk.

Lepez, who purchased unit one, walks directly to his container, throws up the door and starts clearing out the space. Lepez paid $600 for the unit and said he would probably make $2,000 from his finds.

First, Lepez removes the large furniture pieces from the unit and leans it against the outside wall. The furniture—too big to fit in Lepez’s white pick-up truck—is collected by his friends, who arrive a few minutes later in a separate pick-up.

Over the years, O’Brien and Butler have seen some crazy things when that storage locker door is thrown up: coffins, marijuana growing equipment, people’s ashes, an old ticker tape machine—that’s one of O’Brien’s favorites.

The auctioneer loves the historical aspect of storage auctions. “What’s old is new again,” O’Brien says. “You can learn a lot of stuff around storage lockers. Most of it is useless but every now and then it’s cool.”

But both O’Brien and Butler are cautious about people who come to storage auctions expecting to strike it rich.  “Everybody’s looking for the dream,” O’Brien often says, “that there’ll be something in there that will be just a priceless heirloom, and they can just make all kinds of money on. Cause on television they do! And everything on television is true,” O’Brien bursts out laughing before he continues: “Wrong!”

In the real world, he says, “There are nice things that are found. But more often than not, people who can’t pay their bills typically don’t have the nicest stuff.”