Online Business

Police departments frequently end up with items that no one claims. Most often these are items that have been found, abandoned vehicles, or items recovered in the course of an investigation and presumed to be stolen. If after a reasonable length of time, no owner can be found or in the case of towed vehicles, if the owner won’t redeem the property the police hold a public auction. There’s no telling what will show up at a police auction. You can get a pretty good idea of some likely items, though, by thinking about the sorts of things that are easily stolen and are hard to trace cameras, car stereos, TVs, small appliances, coins, sports equipment, personal effects, and bicycles. In fact, police auctions are one of the best sources in the country for low-cost bicycles. Abandoned vehicles can be anything from a moped to a recreational vehicle.

As our first step into the world of auctions, let’s take a look at some sales you’re likely to find in just about any town of any size in the country. We’ll talk a little about how the property reaches these auctions and the kinds of merchandise you’re likely to find, and then we’ll describe how to learn when and where these sales are held in your area.

Learning how to resell goods you’ve bought at an auction is another skill you’ll acquire as you learn how to make the Cash Flow System work for you. We’ll talk more about this later on, since it’s not a skill that’s valuable only in reselling auction goods. You’ll use the knowledge you gain selling smaller items when it comes time to resell the more profitable investment vehicles, such as real estate, that you buy.

Just like any other valuable skill that I can think of, learning to buy at auctions is something that develops with time and practice. Don’t expect yourself to know everything immediately, and don’t give up! If you go to only one or two auctions, you may not see anything you think you want to buy. Or you may decide on purchasing a few items, only to find that other people are willing to bid more money for them than you are. This is the time to increase your efforts, attend more auctions, bid on more items, and turn your knowledge and energy into increased cash flow. Now, before we get into the cash flow opportunities explained in the rest of this book, there’s something else you should know: how to buy successfully at an auction. I have a set of rules for this, which I call my “Auction Success Formula.

The best way to learn about auctions is to attend them. If you’ve never bought at an auction before, visit a few local auctions just to look around.

Most auctions hold previews to show their items to the public and to give everyone a chance to inspect the merchandise before the bidding starts. A preview may last for an entire day or more and be held any time up to the day before the auction; or it may last for only an hour or two and be held on sale day before the bidding starts. These previews usually don’t require a deposit and are open to the general public.

When you first enter the viewing area, look around carefully. You should find a list, known as the sale list or catalog, of the items up for auction. If you don’t find this catalog, search out someone in charge and ask for it.

The catalog names the items up for sale, gives each one a lot number, and sometimes lists a minimum bid. Sometimes, too, the catalog lists an “estimated value” or “appraised value for merchandise, which is there simply for your information. At some sales these values are accurate, while at others they seem less exact; it all depends on who does the appraisal. Never let these estimates substitute for your own knowledge of an item’s value, and don’t worry too much about them. When it comes to bidding, estimates and appraisals usually have very little connection with the actual sale price.

Take your time at the preview. Shop around. Inspect the items closely. Try to get an idea of what you think a particular item is worth; then compare that price with the minimum bid (if there is one). Write down your own estimate of the highest price you’d be willing to pay for anything you’re interested in.

After you’ve seen the preview, attend the auction. Don’t put yourself under any particular pressure to buy. Tell yourself that you’re there to learn and to acquire a new skill.

Generally, the first thing you’ll notice about most auctions is the air of repressed excitement in the room. People whisper to each other and glance around, eyeing the bargains they’re most anxious to bid on and wondering if anyone will bid against them. In a way, it reminds me of the beginning of the first dance at a junior high school. Everyone is waiting for something wonderful to happen and hoping it will happen to them.

When the bidding actually starts, the excitement increases. Things move fast. Lots which can be anything from a single item to a large assortment of unrelated merchandise may be brought up to the front of the room or their numbers simply called out with a short description of what the lot contains. As the items people have been waiting for go on the block, the bidders become more and more enthusiastic. Then, when they’ve bid on what they wanted and won the bid, they feel victorious. Finally, when it’s all over and people are picking up their purchases, the room hums with happy exclamations as buyers smile and compare notes on their bargains.

The funny thing is, this happens even when there are few bidders present and many articles go unsold for lack of interest. The people who are there enjoy it just as much as when the room is packed. The enthusiasm and excitement are great, but you have to learn to guard against these feelings. Old pros call it auction fever. That’s when people get so carried away that they bid on anything and everything, with no regard to its true value. Amateurs can bid an item up beyond its retail price or end up buying something they have absolutely no use for, simply because they get caught up in the fun or give in to their competitive spirit.

Auction fever has no place in plans to use auctions as a source of low-priced investment merchandise or bargains on personal possessions. That’s why I advise everyone to visit the auction preview and make careful estimates of their highest bids beforehand and then stick to those figures.

Of course, when you’re visiting auctions to learn about them and you see an item you like, you’re as free to bid as anyone, as long as you offer only what you think an item is worth. If someone outbids you, you’ve still learned something. You’ve had the chance to see how realistic your original estimate was, you’ve gotten acquainted with the location, you’ve learned how many other people show up, and you’ve seen the bidding process in action. You’re that much closer to success. With practice your predictions will get more accurate, and you’ll feel more confident of your judgment on future purchases.

It’s also a good idea to get into the habit of looking at the Legal Notices section of your local paper on a regular basis. Since the law often requires a legal notice to be published before a seller can dispose of personal property, you can learn about many private and government sales this way. Check with your county clerk for a list of newspapers that run legal notices in your area.

How Auctions Different from Related Sales

Purchasing at auctions is very different from buying at most retail outlets. Here are some of the basic differences between auction buying and purchasing the same type of item from your local store:

1. Price. At a store, the price of an item is fixed. If you feel that the price is too high, you can shop around or settle for lesser quality at a lower price.

Auction prices evolve. As a bidder, you participate in setting the price. Sometimes the sellers set a minimum price for an item, below which they will not go. At other times there is no set price which means that you may well have the opportunity to create a great bargain!

2. Quality of merchandise. At a store, unless it’s a secondhand store, the items you purchase are new and unused. If you discover a flaw, you have the option to return or exchange anything you buy.

Auction items are sometimes used or secondhand. Because every bidder is given the opportunity to inspect the items before the sale, everything is sold “as is.” If you discover a flaw in an item after you’ve purchased it, it’s your loss. You have to fix it yourself or live with it. For this reason, close inspections and a good knowledge of your prospective purchases are essential.

3. Payment and delivery. At a store, you can often pay for your purchases in cash, by check, or with a credit card or some sort of in-house credit plan. If you can’t take your purchase with you immediately, many stores will arrange delivery for you for a small fee.

At an auction, the full price of the item is usually due immediately or at most within a day or two. Rules for payment vary greatly between different auction houses. Some houses demand cash only; others will take personal checks if you’ve established a line of credit. Bidding is open to anyone who wanders into some auction houses; others require a minimum deposit from anyone who wants to participate. This deposit is deducted from the money you owe for an item if you make a winning bid; if you don’t make any winning bids, your deposit is refunded to you at the end of the auction.

There are also no set rules for delivery of the items you purchase. In general, once you conclude the sale, the item is yours, and it’s your responsibility to make delivery arrangements. Some auction houses have connections with delivery companies, which can wind up saving you money; but this varies from house to house.

The best way to discover the world of auctions is to visit a variety of local auction sales. These are not the more specialized sales I’ll be describing later, but they are a good place to start. Auction houses vary greatly in their size and scope and in the kinds of items they offer. Some houses deal only in antiques. Others work strictly with estate sales. Others handle only farm equipment. The best way to find out in advance what sort of merchandise will be offered at a particular sale is to check out your local auction houses and read auction notices in your local newspaper.

Local auction notices are usually published in their own section of the classified ads of the newspaper. Check out the Saturday and Sunday papers for the greatest range of sales. Also, look in your local Yellow Pages under Auctioneers. Most auction houses welcome telephone inquiries and will be glad to put you on their mailing lists to notify you of future sales.

There are techniques to profiting from auctions and certain kinds of auctions where your opportunities are better than at others. You need to know more about these things before you actually go out and take part in an auction.

This information isn’t secret, although most of it is unfamiliar to the general public. Most of the various auctions and sales we’ll discuss are held in every city in the country. The rest are easily accessible to anyone who’s determined to increase his or her cash flow. If you examine past records for your city, you’ll learn that informed people have been making money through these channels for years.

You don’t have to worry, though, that now these ideas are being published, the competition will make it impossible for you to profit. For one thing, not everyone who learns these techniques will go out and put them to work. Others will lose their motivation or get sidetracked into more comfortable, familiar activities than building their fortunes. Only a few of you those who really want your success plans to work and are willing to step out of your ruts and take a little extra effort to build financial independence will stick to these ideas and use them as a springboard to increased earnings and investment power.