There’s a common mistake made by many new storage auctions attendees. It’s an easy mistake to make and completely understandable. New storage auction attendees show up with a wad of cash in their pocket and expect to strike it rich on their first go. Now, while this enthusiasm is great and while it’s a major part of what makes this industry so exciting, it’s also the best way to lose your money upfront without achieving any major return.
Scout it out first! That’s right. Show up to as many storage unit auctions as you can in the first couple of weeks so you can get a good solid feel for the operations and processes that you’ll encounter when it comes time to start bidding with your hard earned cash. For one thing, many people that are new to storage unit auctions underestimate exactly how frenzied and quick the entire auction process can be.
It’s frenzied and fast for a reason! The auctioneer, the one with the microphone who’s talking too fast and pointing to and from bidders as the action heats up has a personal financial stake in making the auction process fast, somewhat confused, and as frenzied as possible. That’s because they usually get a cut of the final proceeds. The faster the auctioneer can get people to bid on the units, and the faster he can get competitors to outbid, the more likely the price is to fly through the roof.
It’s simple consumer psychology that people have been using for centuries. The faster the action, the greater the perception that something valuable and time-sensitive is passing you by right before your eyes. This triggers an emotional reaction, not a reasoned intellectual reaction. Instead of sitting there trying to carefully calculate your cash outlay against the possible value of the storage unit, you’re just pulling the trigger and raising the highest bid each time because you don’t want to lose out on the unit.
The key to success in storage unit auctions could have been written by Kenny Rogers himself. You need to know when to walk away, and know when to run. If you get overly emotionally attached to any one unit, you’ve already lost, because any other bidder can run you up the flag pole and gift you with a very expensive unit at a price far beyond what you were initially willing to pay. This is a major trap that many storage auction newcomers fall into.
Avoid this money-sink and protect your profitability by preparing yourself with some good, boots-on-the-ground reconnaissance before you actually lay your cash on the line. The more you become comfortable with the storage unit auction process, and the more you observe how auctioneers and other bidders behave in the middle of a heated contest, the better prepared you will be when you are actually in the thick of the bidding war. Police, soldiers, firemen and all other kinds of high-stress, quick-reaction professionals spend years upon years training their bodies and minds to react correctly during the heat of the moment.
This is because our brains are naturally tailored to respond emotionally when things get heated – we can do it faster emotionally – using our flight or fight response than we can using our much more evolved (and much more SLOW) reasoning capacities. While this is great in emergencies when quick responses can mean the difference between disaster and survival, it’s not so good for financial decisions.
Yet all kinds of successful financial professionals have used it to get your money even in situations that you didn’t initially plan to put a lot of cash into. They play off your quick-fire emotional responses to get you to listen to your fear that a major opportunity is slipping through your fingers this very instant. There’s no time to wait! There’s no time to go home and think it over and discuss it with your wife or accountant! You just need to pull that trigger now or lose this opportunity forever!
Don’t get taken for a ride by this kind of wild emotional reasoning. If you fall for it once, you will be more and more susceptible to doing so in the future. However, if you can start attending storage unit auctions ahead of time, before you’re actually investing your own capital into the bidding wars, you will become more and more familiar with the processes and you will therefore be more and more capable of thinking clearly when the heat and the action falls to you!