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Old 12-03-2010, 11:29 AM   #1
pmyers
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Auction Hunters and Storage Wars

2 new shows I've been watching and enjoying. Same concept for both: Guys by storage units at auction and hope that something good is inside to resell. Check them out and let me know what you think.

It actually has me thinking about what is entailed in finding out how these auctions come about and how you find out about them.

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Old 12-03-2010, 11:47 AM   #2
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I own a storage facility, and although the laws are different depending on the state you're in, generally the sales are advertised in the local newspapers a few weeks prior to the auction date. Since this show has aired, the frequency of calls to my facility asking when our next auction is has increased dramatically.

Having been in this business for 25 years, I can tell you without reservation that 99.9% of the sold units consist of dirty underwear, tupperware, broken furniture and pornography. Periodically something of value is in there, but not pen and paper Picassos and million dollar baseball card collections. You can see that a couple of these guys own consignment stores or secondhand stores, did you see all of the crap stewn about at their stores? That's the crap in storage. Unless you have an outlet to get rid of the stuff like a store, or are willing to spend your weekends at the swap meets with the dregs of humanity, auction buying/selling is probably not for you.

In California, the management is required to do a cursory inventory of the unit, which is then listed in the sale notice in the newspaper. Typically, the list is something like: HHG (household goods), tools, furniture, plastic bags, misc. Since the goal of the manager is to get as much money as possible for the unit to offset the unpaid back rent, you can bet that under normal circumstances the manager would have uncovered that BMW and made sure it was visible from the door.

Another misleading aspect is that they show them cutting off a lock and then throwing the door up, as if nobody has ever been in the unit prior to the sale. Since that facility is in CA, and the lien laws supercede the need for drama on the part of the producers, that is clearly an editing misdirection. The unit had most certainly been entered, inventoried and relocked with a facility padlock. I'm guessing that for $5 the producers wanted the drama of sparks flying as they cut off the lock.

It's not cheap to go to the dump here in CA, and that's where most of the stuff ends up.

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Old 12-03-2010, 11:51 AM   #3
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I own a storage facility, and although the laws are different depending on the state you're in, generally the sales are advertised in the local newspapers a few weeks prior to the auction date. Since this show has aired, the frequency of calls to my facility asking when our next auction is has increased dramatically.
What happens to the money? Do you as the owner keep it all? Can you keep anything you find in the storage or do you have to auction? How does that work in reality?

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Old 12-03-2010, 12:00 PM   #4
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The contents must be auctioned off, I cannot just keep the contents of the unit if I'm interested in it. In rare occasions, the actual tenant will show up at the auction and buy his/her own stuff back for less than what is owed on the unit in back rent. In my case, I typically let people go much longer than I should before selling their contents, so the amount owed to me has always been much higher than the amount I've ever gotten for the unit at an auction. In that case, the money bid does stay with me and offset the loss of rent I incurred. If more money than is owed is bid at auction, the excess is available for the tenant to claim in a timely manner and then it reverts to the state. (that's never happened at my facility)

There are very specific codes to stay in compliance with lien laws in CA, and there are people out there that are just waiting for you to make a misstep in the process and sue you. It is the one aspect of the business that is fraught with land mines all along the path. We double and triple check each step along the way. Even if you KNOW the contents are quite literally trash, you still have the auction. When there are no bidders then I've satisfied the requirements and can dispose of it myself, at my cost.

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Old 12-03-2010, 12:10 PM   #5
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Here's a funny story, I had a young (20 something) lady come and rent a relatively small unit from me. Soon after she moved in she stopped paying the rent. I called and called, sent letters, tried every name on the contract to reach her, could never get to her, just left messages. After 6 mos. of not paying her rent, I finally got around to getting her through the lien process (I can legally do it at 14 days late). When I cut her lock off to inventory the unit, it was the typical trash, clothes bags, broken stuff and just all junk. I placed the ad, had the auction, nobody bid on it, it was now mine.

I loaded up my pickup truck with all her junk in it and was heading out the dump with it. As I drove off the facility I had to stop back in at the office to get cash for the dump fee, as I pulled to a stop in front of the office, a briefcase I had thrown on top of the pile in my truck slid off and fell into the street, breaking open.....

Now, blowing in the light wind all over the street and surrounding area, were naked pictures of this fine young lady in all manner of compromising positions and in various states of engagement. Apparently, she was rather popular with most everyone she met, and was not choosy about gender...

So, realizing I had yet one more opportunity to get my rent back, I made one last call to her cell phone which I had called dozens of times prior. I left a short message saying that I was on my way to the dump with her things and wondered if she would like to come in and buy her briefcase back or if she'd rather it be delivered to the dump workers... I got a call back from her within 10 minutes.

That briefcase cost her about $900 in cash.


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Old 12-03-2010, 01:01 PM   #6
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Well, it is TV so I take all of the shows with a heaping spoonful of skepticism.

Heck, even I knew that
Spoiler:
a storage room full of commercial grade restaurant equipment was worth more than $2800.00

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Old 12-03-2010, 01:28 PM   #7
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Jayjoans thanks for the insight and great story! Would love to hear any others you might have.

I was wondering why the storage place didn't just keep the contents and now I know why.

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Old 12-03-2010, 01:54 PM   #8
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Jay what percentage of the winning bid goes to the auctioneer?

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Old 12-03-2010, 05:09 PM   #9
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I auction my own units, there is no legal requirement to use an auctioneer. The sale just has to happen in a "professional manner".

Some feel that they get more for the units due to the fact that more people may show up because they follow the auctioneer rather than scour newspaper ads. It's in the auctioneers interest to generate a following of buyers so he can say he adds value to sales, hopefully covering his fee. Bottom line is, I don't know the answer to your question, sorry.

By the time one of my units goes to auction, I've written it off as a loss. I don't plan on getting what is owed, or really anything near it. Rather than have 100 people of varying reputation and inclination crawling all over my facility doing who knows what, I like my auctions very small, very quick and hassle free. I comply with all the regulations, but don't go out of my way to generate a lot of interest. I typically have 5 guys at my auctions, they know where I advertise and find my ads. I only have auctions probably 3-4 times a year at most, I really hate selling people's stuff. I've thrown away family albums, baby pictures, legal documents, letterman's jackets, wedding dresses, etc... Not something I like to do, so I give people WAY too much time to redeem the unit.

Right now I have 10 units that I can auction at any time, collectively I'm owed about $25,000 on them, and some haven't paid in well over a year. Unless I get down to only a few vacant units of the size these deadbeats are occupying, I let them ride along in the hopes that they pop up and pay their bill. It's happened where someone was in jail for a year and then called and asked if I still had their stuff. They were amazed that I did, and they settled up with cash and got their stuff back, but that is VERY rare.

I probably will sell all of these units in the next few weeks though, I like to start the year off deadbeat free. Some I've already inventoried and some I haven't yet. Trust me, nothing exciting in any of them.

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Old 12-03-2010, 05:26 PM   #10
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When you inventory stuff can you open boxes?

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Old 12-03-2010, 05:33 PM   #11
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I don't, I just say "misc. boxes". What I don't want to do is to ever be accused of cherry picking unit contents. If the auction buyers feel that you've already been through stuff and know the contents and/or taken things out, then your auctions will be fruitless and you expose yourself to some serious legal trouble. Additionally, the delinquent tenant could show up at the auction to bid on their own stuff, and they know exactly what was in that unit. If it's gone, you have trouble you don't need.

I pretty much stand at the door like they show on the tv program, look in and get an idea what is in there. I also have an employee videotape us cutting the lock and opening the door for the first time. Having said that, I would have probably looked under a blanket over a large item in the middle of the unit to see what it was, and after finding a BMW, made SURE that was in the ad I placed and allowed it to be visible from the threshold. That's why the show is misleading, they want you to believe that the opening of the door could reveal stacks of gold bullion that have never seen the light of day. To your original question, I didn't open the briefcase in the story I related above, it was the impact with the street that made me $900.

I'm in the storage business, not in the selling other people's trinkets business...

There is also some exposure to me if I were to knowingly sell stolen, illegal or hazardous items. Another reason to do a relatively decent job of inventory. If you were to find drug paraphernalia or weapons, then there is another path to take prior to the auction.

This is a family business and I have 4 kids, I learned early on to get them involved with the operation of the business just so that they could contribute to the business. What I didn't expect was to find that over 50% of the deadbeats seem to store pornography (which was show in one of the Storage Wars episodes). My kids haven't helped me inventory a unit since the first year we opened 25 years ago....


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Old 12-04-2010, 08:42 AM   #12
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Thanks for all the inside dope on the storage business! I'm guessing this series is picking up on the popularity of Pawn Stars and American Pickers. Pickers is my favorite, so I'm also enjoying Storage Wars.

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Old 12-04-2010, 08:52 AM   #13
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Jayjoans, thanks for the professional insight!

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Old 12-06-2010, 07:28 AM   #14
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I agree. The info from Jayjoans was very enlightening!

Have you ever had an auction where the unit contained something illegal? What would happen if you auctioned a unit with something illegal inside?

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Old 12-06-2010, 07:32 AM   #15
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yeah VERY interesting stuff. Screw the show, just keep posting up stories!!!!

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Old 12-06-2010, 10:52 AM   #16
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Add another "thanks for all the info and insight" to the pile here. Definitely good stuff and awesome getting the information from someone that knows the business.

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Old 12-06-2010, 12:16 PM   #17
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I haven't knowingly sold anything at an auction that I knew to be illegal or hazardous, but if I were to run across drug paraphernalia, firearms or explosives I would notify the authorities before the auction. Periodically, law enforcement will come to my office asking whether or not someone they're looking for is one of my customers. They'll show me a mugshot and a list of aliases to see if I recognize anything. Using an off-site storage facility to warehouse drug making items has been relatively common.

Since I am the owner/operator here, I've developed a pretty good sense of trouble, and can usually determine between the curb and my office door whether or not you're going to store your crap with me. Most facilities are nationally franchised chains, and to their own detriment, they "bonus" their managers based on occupancy statistics. You can see the problem they inflict upon themselves with that program. Those managers will rent to ANYBODY, just to get the money from their employer. Doesn't matter to them one bit that they reek of ether, have missing teeth, open sores and 3 sizes of bolt cutters hanging off their belts. I am often turning away business in one way or another for the protection of every other tenant I have and for my own desire to limit issues for myself. I look at my facility as a neighborhood, and I don't want the riff-raff moving in. Every "good" tenant I have is paying me for nothing more than safe and dry. Dry is easy, safe takes some experience and willingness to turn away a paying customer you don't feel good about.

In the early years, storage facilities (at least in my area) were more commonly found in the outlying areas where the land was cheaper. As they became more popular and financially viable, they moved into the cities and closer to populations. When they were further out, they were very popular with the druggies. Since making drugs is volatile and often very smelly, it worked well to rent a unit out in the boonies, cut a hole in the roof for a vent, and cook the drugs inside the unit with no prying eyes and few people to smell it. For bonus points, the crackheads could also rip off other units while they were waiting for the drugs to be made. Unless a facility is way out and doesn't have onsite management, those easy days of drug making are pretty much past now.

Onsite management that actually cares and is somewhat astute is vital. A properly built facility has the most to do with the safety of your belongings, long before the quality of your padlock comes into play.

Here's something that should tip you off as to the overall quality of what is in 99.9% storage units that are auctioned. Have you ever heard of an auction where the potential buyers are not allowed to even look at what they are buying? Cattle? Cars? Estates? Art? With storage facilities, the trend (not requirement) is to not allow people past the threshold as shown in the show. That is not a legal requirement, it is just a widely held storage industry practice. Why would you suppose that is the case? Because it's junk. As a company, you get more money bid based on people's hopes, dreams, and assumptions, not on reality. If they were really such a great buy every time, I would empty all of the units and set everything out on a table and sell it item by item. If I let the people go through the unit and see what's in those boxes before bidding, I would get nothing. I can however, point to "Storage Wars" now and tell them it could very possibly be a million dollar comic book collection or banded stacks of $100 bills.

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Old 12-06-2010, 05:25 PM   #18
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I like what the one guy said about when he's trying to size up a unit before bidding: "If I see trash bags I worry, because people put trash in trash bags" or something like that. If he see's boxes (especially boxes that have been purchased) he get's excited because soembody spent money to protect their stuff.

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Old 12-06-2010, 07:45 PM   #19
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If you go to an auction, ask the management to tell you why the person is delinquent. If they'll tell you, you're looking for an answer like "the tenant died". That means that there's a better chance there MIGHT be stuff in there worthwhile. If the answer is something like "they were good tenants and just stopped paying", that more likely means the tenant already took all the good stuff and didn't want to deal with the trash.

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Old 12-06-2010, 08:17 PM   #20
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Add me to the list that finds your comments/perspective on the whole thing very interesting!

The part about it that I don't get is why the hell do people pay for storage for junk?

I mean, sure there are going to be people that have sentimental attachment to items that will be junk to anyone else, but it sounds like sometimes people are actually storing TRASH! WTH is up with that?!?

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Old 12-06-2010, 08:25 PM   #21
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If you like the auction aspect, you might want to try Hollywood Treasure on SyFy. It's about an auction company that searches out H-Wood memorabilia from collectors and actors and auctions it off. It's crazy watching someone drop $90,000 on the carpet bag from Mary Poppins or $45,000 on a Willy Wonka 'golden ticket'. You also get to see a lot of cool stuff from tv/films that doesn't make it to auction.

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Old 12-06-2010, 08:51 PM   #22
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Add me to the list that finds your comments/perspective on the whole thing very interesting!

The part about it that I don't get is why the hell do people pay for storage for junk?

I mean, sure there are going to be people that have sentimental attachment to items that will be junk to anyone else, but it sounds like sometimes people are actually storing TRASH! WTH is up with that?!?
My guess is that the people keeping trash are much like, or could even be, the people we see on Hoarders. People that just can't bear to part with stuff and rather than parting with that stuff they pay good money -- for at least a minimal period of time -- to store whatever that stuff is.

I don't believe my wife had ever put stuff in storage, but I know she had thought about it as our home became more and more cluttered. She had a definite hoarding problem (which my son/daughter both have some of, more so my daughter, but we're trying to work on the issue) and if she was faced with deciding between having to throw away some of her stuff or paying a storage facility to keep the stuff in, she might very well have spent her last dime to save her stuff.

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Old 12-07-2010, 12:41 AM   #23
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I only half-jokingly say that I could shoot a cannon down my facility and hit nothing of value... Except for the odd Porsche, Corvette or classic Shelby.

I've had tenants in my facility for almost the whole 25 years I've been in business, that's probably rent they've paid in the range of $40,000. I know for a fact that the people can live without it, as they mostly haven't even come to the unit in 10 years. One gentleman stored with me for 10 years, he had 5 large units. He paid me roughly $120,000. When he died, his heirs came to look at his units. They were completely full of junk and cans of food (which I prohibit). Apparently, as a product of the depression, he always felt he needed to squirrel away supplies in case times got tough, and never threw away something he thought he could use or fix. Undoubtedly the heirs would have rather had the $120k much more than the rotten cans of vienna sausages and SpaghettiOs.

Since the economy has turned downward my tenant profile has changed a bit too. Although my overall occupancy has remained about the same, I've had more turnover than normal. The people that rent for convenience have cut back and eliminated their units, but they have been replaced by people that lost homes and had to downsize or move back in with friends/family.

I always get a kick out of the people that come to my office and say "do you have any units available? I'm being evicted from my house for not paying the rent....I need somewhere to put my stuff"

Oh, you mean like my RENTAL facility? Well, that was just a little bit too much information, now wasn't it?


SeanC-- shhhhh, keep your voice down, somebody might hear you around here.

I'm often amazed that people will put a $50 couch, a $50 refrigerator, $100 dining set and $50 worth of knick knacks in a unit that costs them $100 a month. Then after having it in there for a year or so come to me and tell me that they don't know why they keep paying on that stupid unit, as they write me another check.. I could see value in their sentimental items, but do you become attached to a couch and a Norge?

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Old 12-07-2010, 07:21 AM   #24
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I'm often amazed that people will put a $50 couch, a $50 refrigerator, $100 dining set and $50 worth of knick knacks in a unit that costs them $100 a month. Then after having it in there for a year or so come to me and tell me that they don't know why they keep paying on that stupid unit, as they write me another check.. I could see value in their sentimental items, but do you become attached to a couch and a Norge?
That part I can understand. They had those appliances and that furniture in their home at some time. Then tragedy struck (job loss, whatever), and they had to move in with relatives or to a smaller place.

Storing their stuff with you represents to them the hope that they will eventually get their life back to the way it was, and that they will someday come and get their couch and fridge back. If they didn't store their stuff with you it would represent a pretty major setback in their life, and they probably don't want to face that reality at the point they rent from you.

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Old 12-07-2010, 09:05 AM   #25
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If 99% of the storage material is junk, why do the buyers keep coming back for more? I can see rookie buyers trying for awhile but some of the buyers on the show seem to have been at it for many years.

I guess I could see it if the buyers had specialized knowledge, like the guys on American Pickers. A storage facility owner would see total junk in much of what they pick but a trained eye can spot real treasure in a rust encrusted ancient bicycle. However, if the buyer isn't allowed to inspect the unit first then even a good picker wouldn't go for it.

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Old 12-07-2010, 10:23 AM   #26
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...I'm often amazed that people will put a $50 couch, a $50 refrigerator, $100 dining set and $50 worth of knick knacks in a unit that costs them $100 a month. Then after having it in there for a year or so come to me and tell me that they don't know why they keep paying on that stupid unit, as they write me another check.. I could see value in their sentimental items, but do you become attached to a couch and a Norge?
That's me. I rented a unit to store my Mom's stuff because my place, which is huge, already has 3 bedrooms used for nothing but storage of junk.

I just recently had the inspiration that I can invest $3000 in erecting the storage shed in the backyard and put the dining set in my kitchen, and be ahead on my $89 a month in no time.

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Old 12-07-2010, 02:18 PM   #27
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If 99% of the storage material is junk, why do the buyers keep coming back for more? I can see rookie buyers trying for awhile but some of the buyers on the show seem to have been at it for many years.

I guess I could see it if the buyers had specialized knowledge, like the guys on American Pickers. A storage facility owner would see total junk in much of what they pick but a trained eye can spot real treasure in a rust encrusted ancient bicycle. However, if the buyer isn't allowed to inspect the unit first then even a good picker wouldn't go for it.
Well it's pretty simple I guess, if 99% of them are junk, all they have to do is look at 100's of units, which I'm sure they do. They will eventually find somethig good.

The Auction Hunter show gives a better idea on how they work. Those guys say they ONLY bid on boxes that they know they can make money on, and they stick to only half of what they think it's really worth. They were also pretty up front about how most of the units they bid on don't really pan out to anything. Although when they find one that has something valuable in it, I'm sure there is a huge rush out of that.

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Old 12-07-2010, 03:18 PM   #28
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I wonder if some of the "junk" phenomenon is simply laziness. People throw stuff into storage just to quickly get it out of the way, then never go back to sort through it properly. Eventually the pile becomes so big that the task of sorting through it all seems overwhelming, and they'd rather just keep writing the checks so they don't have to deal with it.

And they don't want to just throw it all out of it because they honestly don't know if any of it might still have value or even be important in some way.

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Old 12-07-2010, 11:04 PM   #29
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It sounds like this is a great way to get rid of 'hazardous' waste you don't want to dispose of properly. Rent a room and then fill it with your old tires, CRTs, UPS batteries, etc. Lapse on the rent and then it's somebody else's problem.

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Old 12-08-2010, 12:37 AM   #30
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ElJay- I've worried about that for many years, that's why I'm often nosing around on the facility when someone is moving in or out, just trying to get a peek at what they're moving. My greatest fear is to notice some glowing ooze from under a unit door one day.

Goes back to good management, and highlights the industry problem of paying managers based on occupancy.

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