by James Chillcott (@MTGCritic)

Anatomy of the Deal

MTGFinance may be a niche within a niche, but each of the players in the game still tend to have their own areas of focus. Jason is an EDH specialist with a penchant for flipping collections at retail and via instant collection packages. Sylvain is a master of MTGO. If you’ve followed my MTGFinance exploits on this site over the course of the last year, you may already be aware that most of my activity tends to be focused on identifying blue chip single card specs for Standard and Modern at their lows, and then holding them for 6-18 months for significant gains. Occasionally, I put effort into consolidating my collection by trading up into important cards, as I did with a beautiful Unlimited Black Lotus at GPNewJersey last fall.

As a guy heading up two businesses, an active social life and a number of hobbies (gaming, action figures, MTG), I often have to leave certain opportunities at the wayside because I simply don’t have the spare time to pursue them. As such, buying collections has long been off my radar. Bolstering this view was the fact that I live in Toronto, a hot bed of Magic activity with at least 20-25 active MTGFinance types that are constantly scouring social sites, message boards and Craigslist/Kijiji, looking for the next score to fight over like dogs to the bone. It’s tough to make your negotiation time worthwhile when you don’t know who might swoop in to grab up your treasure. The other factor was the time, complexity and risk involved in processing and parceling out a collection of the size that would peak my interest.

So if you’d asked me last month whether I was interested in buying your collection, the answer would likely have been a polite “no thanks.”

That was before my buddy Rob pinged me with an intriguing set of pictures from some guy’s basement. Rob and I have known each other since we were twelve, and though I’ve made him some money on specific Magic card specs before (Snapcaster Mage being the most recent), he’s mostly focused on vintage skateboard decks and comic book finance. We have a long running agreement that if we trip over something of interest to the other guy, we’ll raise the flag.

The text said “Are these dual lands? Worth anything?”

As you might imagine, he had my attention instantly.

“How many are there?”, I returned.

A few minutes later, “Um, like maybe 60…he says he hasn’t advertised them anywhere.”

Fast forward 24 hours and I’m in the basement of a man who says he used to own a card and comic shop. He was in from the beginning but quit collecting around Zendikar block. He makes a big deal of telling me that he sold his P9 and put the down-payment on his house a few years back, so he’s not sure there’s much left I’d be interested in. His son drags box after box of binders into the room as he explains that there is a binder for every set from Revised forward.

I immediately latch on to $5,000 as the figure to start with. The guy never played in tournaments, and probably wasn’t completion focused, so the binders likely hold single copies of 1/3 to 1/2 of all the relevant cards. I’ve seen collections in this configuration before, and they tend to be wide but shallow, but then again there are the duals to consider.  Once he pulls them out and I realize that they are all basically NM/M (with a few at SP grade) and that the group includes both Underground Sea and Volcanic Island in multiples, I hike my estimate up to $12,000-$15,000 .  There’s no black border in sight, but for Revised duals, this card pile is still the cornerstone of a very attractive deal.

My host makes clear that he is not willing to split up the collection at all, that he’s not in a rush, and that the deal will be “all or nothing”. He confirms that only Rob and I know about the cards thus far, because “he doesn’t have the time to put it all up on Craigslist.”

At this point, my lovely girlfriend is already rocking her patented “tick, tick” look over in the corner, and the guy’s wife has dinner brewing up in the kitchen, so I inform the seller that I’d like to quickly flip through each binder and snap some photos so that I can take them home and try to come up with a number I’d be comfortable with. He agrees, so we split the binders up on two tables, and my ever-loving partner in crime snaps photos of her binders more or less at random, while I attempt a more diligent pass on my own. Within minutes my value flag is standing at full mast as I’ve already blown past several valuable foils including a Metalworker, Asuza, Lost but Seeking, Sensei’s Divining Top and an Arena Foil Promo Swords to Plowshares. We’re moving as fast as we can, but we’re missing a lot and in the end there are at least 20 binders left unseen and a stack of long boxes in the closet that he says are “full of bad cards”.

Before we leave I tell the seller that I can “see the value here” and ask him what he’s looking to get out of it. He explains that a dealer had come to see him a few years back on the recommendation of a friend, and that he had evaluated the collection at $25-30K Canadian (about $20 – $24K USD). He says he wants to get $20K ($16K USD) for everything and doesn’t want to haggle on the value of specific cards. Though I’m uncertain that such a price will yield a relevant margin, I smile and tell him that his numbers sound reasonable so far and that I will be in touch within the week to try and work things out. Finally, I ask him to not put the collection up for sale elsewhere until we reach a conclusion. He agrees, and we’re on our way.

On the way home in the car, I start browsing through the pictures on my ladies’ phone and I keep seeing things that are ringing my internal cash register. Foil Unhinged lands. A Foil Promo Wasteland still in the wrapper. A random minty Unlimited Volcanic Island. A page of foil FNM Promos I didn’t know existed.

Upon my return home, I sit down to my desk, throw on some Interpol and spend the next three hours plowing through our photo log and creating an isolated collection using the MTGPrice ProTrader tools so that I can figure out a ballpark figure for the collection and also get a peak at how much it might be worth if buylisted. Though I know I would eventually need to price at TCGLow to move many of the cards, the big picture data on this site is still setting me up for a more informed decision.

The final tally blows past my earlier estimate, with the various pleasant surprises taking the number up to $22, 397 USD. Quick math tells me that even at the asking price of $16K USD, there is $3-5K to be made here after fees, depending on time spent and how likely it is that the collection can be parceled out. Given that large portions of the collection remain unknown to me, I speculate that they might add another $1-2K in value and decide that the play is worth making.

Despite my rising interest, I give the seller a few days to cool his heels before deciding to reengage. On Thursday I text him that I think the value of collection is around $25K and ask for a quick phone chat. On the phone I explain that though the collection value is consistent with his own estimates, the odds of a collector being willing to pony up the cash for something this large is very low indeed. As a former dealer himself, I note, he must understand that the deal is likely to be dealer to dealer, and as such, will necessarily involve a significant discount to account for their margin. Since the collection is of quality and includes the duals, I could see them offering up to 50-55% of the collection value, which places the deal value somewhere around $14K. As I happen to have the funds, and the interest, but not the overhead, I assure the seller that I will come in above the likely dealer offer. He states plainly that his lowest price is $18.5K (~15K USD), take it or leave it. I ask for another week  to think it over and he agrees.

During the week I ping a few actual dealers I know and run the general details of the collection past them without revealing it’s location. My thinking is that I might be able to de-risk the transaction entirely by simply acting as a middle man and collecting $1-2K simply for arranging the sale.  As it turns out most of these contacts express interest, promise to review the list, and then fail to follow up . A few guys toss out numbers like $12.5 K or $14K based on my summary total and the presence of the duals, but nothing ever comes of it.

While I have the cash on hand, I’m only 60/40 on shelling it out, since collections aren’t my main area of expertise, and I’m reluctant to commit the time I suspect will be necessary to turn this one over. Enter David, another contact with deep pockets and a broad interest in stocks and collectibles who I’ve made money for in the past on both Magic tips and stock picks. With the stock market largely stalled this year and heading into the summer doldrums, I ping Dave to see if he’s interested in financing the deal. Because of my continued interest in transparency in MTGFinance, I’ll share the details with you.

I propose a unique set of terms, to which Dave agrees after a bit of back and forth. Dave fronts the cash, which I have resolved will amount to $14.25K USD or about $17K CDN, and I guarantee him the first $17, 500 USD in revenues returned within a year, plus 25% of the remaining net profit after fees and expenses. This provides Dave with a potentially healthy 20%+ annual return, with plenty of upside but no guarantee on his principle other than my value estimate. I lose some upside myself, but de-risk the financial portion of the deal entirely, with only my time and a key relationship at stake. Further, I know myself well enough to understand that my reputation being on the line with Dave will absolutely ensure I give the sales process my all to make sure he gets his returns.

(Side note: I don’t recommend trying this stunt with close friends and family that don’t understand the game or the risks. It’s not worth it to alienate the people closest to you for a few thousand dollars.)

With my financing in place, I contact the seller again, and let him know that my best offer is $17K CDN ($14.25 USD), but that I am willing to provide it in cash so long as the deal is for every MTG card he owns. This was clearly not what he was expecting, as most stores would have needed to do the deal with a purchase order for accounting purposes. He considers briefly, then gets back to me in agreement, on the condition that we close the deal by the following Friday, also noting that he is happy to give us every last card in the house.

Conveniently we have friends up from Michigan, and their truck is the perfect size to lug home 60 binders and a bunch of boxes. On site, we double check that everything looks pretty much as we left it, confirm the presence of a few dozen key cards, and start loading it all up. In the process the seller finds several additional boxes of cards, some old decks, a smattering of random unsorted booster boxes, and a few missing binders. With a nod and a handshake we hand over the cash, and drive off into the sunset.

Processing the Collection

Upon arriving home, my house guests inquire as to how I will proceed. I break down for them that our first goal is to figure out how much the collection is actually worth by locating and isolating the cards that were included in my first tally, and then pricing and isolating all remaining cards over $1 that might contribute to a higher valuation.

As it turns out the pro basketball player staying with us is an utterly nice guy and awesomely OCD, and once he sees me price checking and stickering cards, he dives in with gusto alongside us, and the two of them start powering through binders, competing to see who can find the most value.

Almost immediately, we make a startling discovery, and one that becomes a turning point for the entire deal. As it turns out, the seller was in fact a completionist, and most of the binders between Revised and Ravnica represent complete sets. Even better, most binders contain not one, but four of most cards, and many have the foil on the backside of the page!

This discovery sets off tremors in my heart, as I realize that our photo essay estimates have almost certainly resulted in underestimating the collection value in a big, big way. Frantically, we start flipping through binders, and pulling out entire playsets of key cards we didn’t know were present.

On the first morning alone, we’ve located a ton of unseen value, including an additional full set of Revised, all NM, sleeved and in a custom wooden box, including the full set of pristine dual lands. How did the seller never mention this?! Sum total we locate a total of 67 dual lands, and the average condition is NM.

As the days pass and the work continues, more treasure rises from the mist. One massive binder is full of nothing but foil rares, presumably a trading binder we hadn’t seen on the first pass. Another box has a bunch of binders full of nothing but basic lands, BUT also includes a large binder with nothing but foil and promo lands, including over 200 foil Arena lands and Arena lands worth $5-$20 each. There are 4 sets of 4th Edition and 5 sets of Chronicles, notable mostly for their minty Blood Moons. Lorwyn era cards are entirely absent, but 7th edition foils are plentiful as are foils from Urza’s block. One binder is full of hundreds of random rares, and the handful of decks in the collection all yield sweet goodies. The bulk boxes are almost entirely commons, but cough up hundreds of Dark Rituals, Lightning Bolts and other money commons.

In the end with 90% of the collection processed, we end up with a whopping +$22, 697 (at NM TCGLow) in additional value over my initial estimates, placing the total value of this collection at somewhere between $42,000-$45,000 USD!

Even better, these figures tally less than 5,000 cards, with over $20K in value coming from the top 500 cards alone. 90% of the cards are NM while the remainder are SP, with virtually nothing having been played. The processed collection now fits in a suitcase, and everything is organized by set, in perfect fit sleeves, with top loaders for cards over $20. The remaining 40,000 cards I can do with as I see fit, including entire binders of random bulk foils, bulk rares and uncommons from over 40 sets.

Here are some choice samples of our pulls:

So now what? Well, now we need to hold the applause until we actually manage to sell the Super Collection. In Part 2 of this series, I’ll explore our options from outing the collection, we’ll discuss the pros and cons of the various methods and tally early results.

In the meantime, ping me on via @MTGCritic on Twitter if you think you see something you want, or would like to review the full collection list.

James Chillcott is the CEO of ShelfLife.net, The Future of Collecting, Senior Partner at Advoca, a designer, adventurer, toy fanatic and an avid Magic player and collector since 1994.