JNS BLOG EXCLUSIVE: T.J. Waconia Fraudsters, Where Are They Now?

Photo By Alex Hoff, age 11 

Shortly after the sentencing of T.J. Waconia fraudsters Thomas Balko and Jon Helgason, I had a very interesting lunch meeting with Jim Watkins, the self-described "best friend" of Balko.

Jim and I have been so far apart on our views of what is "justice" in this case, and so many words have flown back and forth, that for a while I dubbed Jim "the Anti-Johnny." Jim took that label and wore it with pride.

So, I ask you, if Johnny Northside is made of "Johnny matter," and the evil Anti-Johnny is made of "anti-Johnny matter," what happens if they touch? It was my contention the whole universe would be destroyed, but I learned all I know about anti-matter from watching "Land of the Lost" on Saturday morning.

Kip Browne, Chair of the Jordan Area Community Council, no doubt speaking in his capacity as chair, and as a licensed attorney, informs me the "only thing" which will happen if matter and anti-matter touch is a "wormhole" is created in the fabric of space and time. Watch out if you're in the second booth from the entryway at Broadway Pizza, that's all I'm going to say.

In any case, me and Jim Watkins met to bury various hatchets and discuss the T.J. Waconia matter...

My son, Alex, was sitting in the booth at Broadway Pizza, playing on my computer. I told my son about Jim--how we really don't agree on some stuff, and there was the possibility the discussion could get angry, but most likely we'd just have to "agree to disagree." I told my son grownups with good sense could sit down and talk like this. He could learn a thing or two by being in a position to observe such a conversation, with his mouth mostly shut.

After I explained this stuff, my son was actually worried some wrath might come in HIS direction from Jim's mouth. I told my son THAT just wouldn't happen, because there had been internet discussions where I'd said "LEAVE THE KIDS OUT OF THIS, CHILDREN ARE INNOCENT," briefly taking the side of Helgason and Balko where THAT was concerned. The constitution of the United States specifically forbids "blood crimes," which means you're not guilty of anything just because your PARENT is guilty.

No, I told my son, Jim wouldn't say anything mean...at least not to an 11-year-old.

To his credit, Jim was as pleasant as could be. We've figured out a long time ago that he's not going to change my mind, and I'm not going to change his. Jim gave me copies of the self-published books he's written about making money in real estate--the advice is limited to the State of Texas--and I signed Jim's copy of Dumpster Diving: The Advanced Course by John Hoffman.

In the course of our conversation, Jim told me some stuff about Thomas Balko and Jon Helgason. First of all, they are planning to show up and serve their sentences. They've each calculated how old they'd be after 84 and 96 months, respectively, and they've figured out much of their life will be ahead of them. So they're not going to throw all that away by getting in a car and driving to who-knows-where.

Prior to meeting with Jim, my son and I had a long talk about extradition treaties and the best place to go if you're a fugitive. My son figured he'd go to ENGLAND, because he can speak English and so it would easier to make a life there.

I told my son about Brazil, and how as long as you're the father of a Brazilian child, THEY WON'T EXTRADITE YOU. I was just getting to the part about how the best way to avoid these issues is to simply obey the law in the first place, but Jim showed up right at that moment and sat down, ordering cheese bread, and I forgot to tell Alex to remain law-abiding, even if he might happen to learn a thing or two about loopholes in extradition treaties.

If my son becomes a fugitive living in Brazil, desperately seeking to father a child, it will all be the fault of Jim Watkins.

Anyway, Jim mentioned that Thomas Balko has been working. Jim said something about involvement in the roofing industry. How the mighty have fallen!

However, I wasn't taking notes, and I confess it may have been HELGASON who Jim was talking about, but I was fairly confident the guy selling roofing supplies was BALKO. Use comments function if you know different. If it was HELGASON selling the roofing supplies, I still draw the same conclusion:

How the mighty have fallen!

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North Minneapolis Mortgage Fraudsters--Collect The Whole Trading Card Set!

Photo By Anonymous Source

Anybody who needs pictures of the aftermath of the T.J. Waconia sentencing hearing is welcome to use these photos from Flickr.com, with appropriate photo credit. To access the photos, just...

...pull 'em off my account, click here.

Everybody knows I'm pretty cool about sharing my pictures, just credit John Hoff and no need to even contact me to ask. HOWEVER, advertising entities, historians or mainstream media who want to use the pictures should contact me to pay some nominal, highly-affordable sum. Thanks.

In this case, though, I'd have to kick it back to my anonymous source, since I didn't take the pictures. (Good heavens, I'd be scared of the U.S. Marshalls, who were being pretty hardcore that morning...don't even get me started)

Oh, by the way...can anybody confirm the identities of the guy in the blue suit versus the one in the tan suit?

Yes, I have pictures of both but I am trying to confirm which one is Balko, which one is Helgason. This is what happens when the mainstream media let these guys flounder in the court system for a year or so, and can't even publish a mug shot!

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Neighborhood Housing Director Urges Adequate Funding To Put Mortgage Fraudsters "Heads On A Pole"

Contributed Photo, One Of The Convicted
T.J. Waconia Fraudsters

Responding to my recent posts about the Larry Maxwell mortgage fraud trial, Hawthorne Housing Director Jeff Skrenes emailed a thoughtful response about the need for adequate funding to prosecute complex, highly-involved mortgage fraud schemes, especially in the hard hit area of North Minneapolis.

I knew Jeff The Mortgage Geek would have some great thoughts on this subject. Jeff says as follows...

It's interesting that as you blog about the Larry Maxwell trial, you also mention the David vs. Goliath nature of who has funding to do certain things.

Just before coming to Hawthorne, I met a victim of Maxwell's fraudulent tactics. I was working for ACORN at the time, organizing to get the predatory lending legislation passed. (THAT was a funding disparity in and of itself, mind you. Industry lobbyists reportedly got paid six figures just to come to MN for a few months to fight the bill. The only way you could say I got paid six figures is if you counted the two numbers AFTER the decimal point.)

And just before THAT, I was a loan originator with Centennial Mortgage and Funding.

In January of 2007, right before I left the industry, Centennial loan originators were trained in on how to spot what was called a "One-Transaction Flip." I don't know if this is now a commonly used term, but it was what Maxwell is accused of doing, and it is a type of transaction that is virtually impossible to do without violating the trust one has as a licensed real estate professional AND breaking laws in the process.

(JNS says: well, I certainly hope for Larry Maxwell's sake that he's gone to the effort of getting trademark protection) (Broken sarcasm font notification)

So I got the training to spot this incredibly complex, very profitable type of fraud. Then I left the industry and organized within communities affected by this fraud, and found someone who was a victim (and potentially participated in several such transactions with Maxwell).

With the help of a realtor, I looked on the MLS and saw that Maxwell was doing this over and over again. Just based on the volume of his transactions, we (this realtor and I) figured he had to be raking in at least $80,000 a month. And then earlier this year, thanks to your blog, I saw some of the court documents showing that he earned as much as 14.6% in realtor commissions - more than double the typical fare.

(JNS says: Oh, yeah, that would have just...um...jumped right out at me, too)

Obviously we don't know how much of that he had to share with his buddies- - loan officers, appraisers, title companies, buyers who got a cut, and shady "consultants" who referred either people or stolen identities to the Maxwell's. Even so, the amount of money flowing from these transactions was CONSIDERABLE. Large enough that one could perhaps save up $50,000 in mattress money in case one needed to post bail, certainly.

(JNS says: well, that whole thing about $50,000 stuffed in a teddy bear is...um...Hunter S. Thompson parody writing)

Imagine my surprise when I found out that this guy lived in the very neighborhood where I was hired as Housing Director. I had the technical know-how to understand what he was doing, he was right in front of me, and I knew enough realtors and others in the industry that could have kept a close eye on him in various ways.

Metaphorically, I had a target, I had plenty of ammunition, but I had no gun to fire it with. Why?

Well, there was a task force (I think it was in Hennepin County, but it could have been statewide) set up to deal with mortgage fraud. Right around that time, it had been shut down or its funding greatly reduced. The reasoning I seem to remember is that the cases were incredibly complex and required a lot of time and money, and didn't have enough of a guaranteed "return" (i.e. conviction) to make pursuing such cases worthwhile.

(JNS asks: I hope any readers who have specific information will comment and help nail down more details about when this task force was operating, when and why it was shut down, etc.)

That left reporting him (Maxwell) to the Commerce Department (run by Pawlenty appointees who really don't like to regulate things like, oh, COMMERCE) or the Attorney General's office.

I could have done more to refer things there, I suppose. I also brought up this case to an investigator, I think with the Minneapolis or Bloomington PD, at a Hawthorne Huddle when I had just started working as Hawthorne Housing Director. But I was still getting the lay of the land and was very new to the neighborhood. I didn't have the experience or clout to make this a huge priority when I had so much else to learn about my job and the neighborhood. It bothered me no end to know that there was mortgage fraud going on in my neighborhood and I didn't know how to stop it.

Yes, the FBI raided Maxwell eventually, but how many bad deals did he do before that happened? How many people were victimized? What was the continued damage to the community? How much more money did he rake in to pay top-shelf defense attorneys before things finally caught up with him?

And how many more Larry Maxwells are still out there, looking for the next way to scam people out of their money?

If we had the proper funding for mortgage fraud investigation, we could hold the fraudsters accountable, we could track them down before they take advantage of even more people with their next scheme, and we could send a message that in Minneapolis, in Hennepin County, in Minnesota, you do not come here and break the law.

If we don't get funding to get tough on mortgage fraud, then our other option is to get together and sing the opening line to "Everybody Knows" by Leonard Cohen. "Everybody knows the dice are loaded, everybody rolls with their fingers crossed. Everybody knows the war is over, everybody knows the good guys lost. Everybody knows the fight was fixed, the poor stay poor and the rich get rich. That's how it goes, and everybody knows."

In my more cyncial moments, I like that song, but I'd much rather put the figurative heads of fraudsters on a pole.

(JNS says: yeah, and while I'm at it, I'd like to wear their bloody metaphorical ears for a necklace)

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JNS BLOG EXCLUSIVE: Images Of The Teary Aftermath Of The TJ Waconia Mortgage Fraud Sentencing

Photos By Anonymous Contributor

An individual who was at the sentencing hearing for the T.J. Waconia fraudsters--Thomas Balko and Jon Helgason--snapped some photos outside the courtroom with a cell phone camera.

No image of Thomas Balko and Jon Helgason has, to my knowledge, been published in the media to date. Yesterday the Star Tribune made a valiant effort to get a photo, but failed. Where the STrib falls short...

Johnny Northside blog and my network of helpful readers/contributors comes through.

It should be noted, here: the prosecutor said these are not "evil" men, and they have friends and supporters who love them. Nobody wins, here, but maybe North Minneapolis gets a little better instead of a little worse when there are consequences for fraudulent real estate schemes.

Also, just to be clear: I DID NOT TAKE THESE PICTURES. In fact, I was forwarded a very nice image of MYSELF taken with the same cell phone camera, good enough to use for online dating, in fact.

Thanks, oh-so-anonymous contributor, you know who you are and I appreciate your help!

(Note: help needed to confirm the identity of which individual is Balko, which one is Helgason)

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Larry Maxwell Mortgage Fraud Trial: Defense Rests, Fake "J.F." Finally Revealed: Jerome L. Kingrussell

Photo By Council Member Don

Samuels, 1564 Hillside Ave. N.

Defense rested today in the seemingly-endless trial of Larry Maxwell. Outside the hearing of the jury, in arguments made for a mistrial or a directed verdict of innocence, defense attorney Larry Reed argued numerous...

...technicalities as grounds, including inability to make a record of the trial because he was told to put objections in writing after being found in contempt of court and fined $100.

In the course of this argument, the identity of the fake "J.F." was revealed, not as Kenny or Kenneth Wilson--a name which had SEEMED to come from the lips of defense attorney Larry Reed--but somebody named "Kingrussel."

Though it initially seemed "Kingrussel" was two names ("King Russel") subsequent bloggy sniffing around in courthouse corners revealed the name of the (alleged) imposter to be "Jerome L. Kingrussel." (Unknown if "Kingrussel" has one "l" on the end, or two)

In light of this information--which is believed to be of much better quality info than previous info--the post naming "Kenny Wilson" as the possible "J.F." imposter has been immediately appended and corrected. What came from the lips of Larry Reed in his "Minnesota adjusted Southern drawl" (as one local lawyer put it) was apparently "Kingrussel an..." not "Kenny Wilson."

Sorry. I do the best I can. Nobody else is here doing it, and it needs to get done.

The final witness for the defense today was Larry Fitzgerald, who is a sportscaster associated with Larry Fitzgerald Dot Com and the father of Larry Fitzgerald, Jr., who plays...I don't know, some kind of sporto...STUFF. I guess people who are into that kind of thing think he's a big deal. WHATEVER.

Larry Fitzgerald's appearance on the stand led prosecutor Liz Johnston to remark there were "a lot of Larrys running around" including Larry Maxwell, Larry Reed, and now two Larrys both named "Larry Fitzgerald." To make matters even more confusing, Larry Reed called a Joe Reed to the stand as a defense witness, but said Joe was no relation.

(Though Larry Reed was also heard to tell prosecutors Joe Reed was his uncle, in what was apparently just a joke. Or not)

Larry Fitzgerald spoke of a couple of years of support that Larry Maxwell had provided by the purchase of advertising on the sports network, and how Maxwell had been helpful in trying to locate a property for Larry Fitzgerald, Jr., which the younger Fitzgerald had subsequently decided not to buy. (The older Fitzgerald remarked young people just constantly change their minds about stuff, even on a daily basis)

In a surprising twist, a man named Marlon Pratt was seen in court today as an intensely-interested spectator. Pratt is messed up in the Universal Mortgage fraud allegedly perpetrated by Donald Walthall, and has apparently retained Larry Reed as his defense attorney. Marlon Pratt had no comment to make to me and, indeed, was not interested in offering his name, but I was able to determine his identity by other means. It is unknown at this time whether there is any connection between the Universal Mortgage fraud ring and Larry Maxwell, other than Larry Reed being the (apparent) defense attorney for both.

Though told to come back at 1:45 p.m., the jury was subsequently notified there would be no more proceedings for the rest of the day, arrive by 8:45 a.m. tomorrow, April 17. Word was the defense managed to obtain additional time to review some documents which may be offered into evidence by the prosecution.

An editorial commenty as follows: all indications are this Maxwell case is the ugly-sticky-heavy lid of something very big, and furthermore that mortgage fraud infects North Minneapolis in a ubiquitous way; rather like the club drug ecstasy infects the techno rave music scene. But consider the T.J. Waconia case by way of comparison.

In that matter, the City of Minneapolis managed to gain a significant degree of control and/or influence over the fate of some 160 properties, some of which appear on their way to being rehabbed for the betterment of the neighborhood.

Getting to the bottom of all this endless black hole of mortgage fraud may a viable and valuable tactic for Minneapolis to get a handle on the numerous vacant, foreclosed properties already in North Minneapolis...with more possibly heading our way in the foreclosure pipeline. To accomplish this, the prosecutor's office must--MUST MUST MUST--have adequate resources to pursue these cases. I call upon the state, the federal government, the cities and the neighborhoods to give the prosecution what it needs to root out the virus which infects and undermines the very foundations of our civilization: the goal of stable, high-quality home ownership to live, love and raise one's family.

Prosecutors Brad Johnson and Liz Johnston are literally wearing out their shoe leather, putting in the kind of overtime hours one expects of COMBAT TROOPS instead of lawyers. In a casual inquiry by Judge Chu today as to whether Brad Johnson had been able to take some time off and be with his family in the last few days, including a new baby, Johnson revealed he had, instead, been forced to work on this case rather than spend some quality time with his family.

True, mortgage fraud isn't as enthralling as murder. But if we let these criminals get away with stealing millions of dollars just because the cases are highly technical and incredibly tedious, these con artists will cook up new scams that will hurt our society in ways nobody can predict.

None of my reporting or commentary is an effort to slight the work of defense attorney Larry Reed, who seldom lets an opportunity escape to argue technicalities, and who probably shouts "objection" upon waking up each morning. (That last sentence was a humorous commentary) Much of Reed's life and personal honor appears tied up in this case, for reasons that aren't always apparent. Does Reed ALWAYS fight this hard? Indeed, he fights for Maxwell as though this man were his own brother, friend and business partner all wrapped into one. It doesn't MATTER how long it takes. Somehow, Reed will buy Maxwell one more day, one more hour, one more frail thin straw of hope even if he risks his legal career in the effort.

When Maxwell goes down--and I predict he will indeed go down hard--Reed will be swinging, as a good defense attorney should. A guilty-as-sin mortgage fraudster could hardly do better than to hire Larry Reed.

I swear, I really need to get more advertisers. Thank you, Larry Reed, for the five bucks cash money and half a container of cole slaw. Now, can we talk about getting a cut of that $50,000 emergency bail money you reportedly have wadded up in your teddy bear?

(Those last two sentences were just outrageous and pithy commentary in tribute to the gonzo journalism style of Hunter S. Thompson, NOT to be taken seriously)

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JNS BREAKING NEWS EXCLUSIVE: TJ Waconia Fraudsters Sentenced

Stock photo by John Hoff

Jon Helgason and Thomas Balko, the duo behind the infamous T.J. Waconia mortgage fraud scheme that hit North Minneapolis hard in the wake of the foreclosure crisis, were sentenced to prison today by Judge Joan Erickson at the federal courthouse in Minneapolis.

Thomas Balko received...

...a sentence of 84 months. Helgason received a stiffer sentence of 96 months, reflective of the fact Helgason had "abused a position of trust." Both men received 3 years supervised probation after prison, and numerous conditions including restitution. A restitution hearing will be held later, separately.

The men remain free prior to a "surrender date" 6 weeks from now, but must go to prison on Thursday, May 28. The judge recommended Balko serve his sentence in Duluth, to be near his family, but the recommendation is not binding on the prison authorities. Any report of problems will cause the duo to immediately go into custody.

Balko and Helgason have 10 days to file a notice of appeal. In a conversation held afterward outside the courtroom, amid a large throng of tearful supporters for the defendant, Balko's attorney urged filing a notice of appeal, saying, "If we don't file a notice of appeal...they win."

In what seemed a deliberate effort to avoid media--consisting only of Steve Brandt from the Star Tribune, a female photographer, and this blogger with his el cheapo digital "gangster cam"--Balko and Helgason managed to successfully exit the courthouse without having their pictures taken, though it is believed pictures exist taken by an individual with a cell phone camera. I'm making an effort to obtain those pictures, but more details will follow in any case.

And, in a side note, once again the blogosphere EATS THE LUNCH of the mainstream media. Uh huh! That's right!!!! 

Now off to the Larry Maxwell hearing...

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TJ Waconia Sentencing Date

Flickr.com Photo

Word comes from the "TJ Waconia Victims Blog" as follows: confessed fraudsters Jon Helgason and Thomas Balko will be sentenced March 10, 9:30 a.m., at the U.S. Courthouse, 300 South Fourth Street, Minneapolis.

No, I do not have the particular room. But hopefully they picked a big one, as there has been media and public interest in this case...or at least there was several months ago.

I plan to be working and will not be able to attend, so I'm putting out the call for pictures and firsthand accounts to be submitted to this blog. (My email is hoff_john@yahoo.com)

I have often stated my position of "let the punishment fit the crime" with Helgason and Balko; basically a "house arrest" situation where they would live and work to benefit the neighborhood in North Minneapolis instead of going to a federal prison where their time will be spent doing little of social value.

However, for the past few months I have been reading "I Was Wrong" by Jim Baker about his time in the federal prison in Rochester, Minnesota. If and when Balko and Helgason are sentenced to prison, I am planning a very SPECIAL blog post based on some excerpted material from that book. If they are (miraculously) sentenced to some kind of creative "house arrest" situation, well, I will talk to some folks about putting together a little gift basket. I'm not even being sarcastic. I see little value in incarceration, but I view it as superior to letting criminals run loose. Yet I do advocate for more creative and humane incarceration which gives back value to society and, in particular, the victims of the crime.

(Do not click "Read More")

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Expensive T.J. Waconia Fraud Fun Never Ends!

Flickr.com Photo

Jeanie Hoholik provided some interesting information tonight which touches upon one of my favorite subjects: the T.J. Waconia mortgage fraudsters. A document which quite properly came into Jeanie's hands provides some interesting insight about how much the T.J. Waconia scandal continues to cost the City of Minneapolis...

Regular Johnny Northside readers are familiar with Jennifer The Flipper, who managed to jump through some relatively minor bureacratic hoops and buy a T.J. Waconia house, which is now renovated and back on the market, click here.

Recently, Jenny received two letters from the City of Minneapolis Inspections Division, with some relatively minor assessments...mere pocket change. The minor assessments weren't alarming at all, but there was some kind of invoice attached to the document. Jennifer didn't know she was merely being cc'd and wasn't expected to pay thousands of dollars in lawyer invoices from Oppenheimer, Wolff & Donnelly, LLP.

What were some of the services and expenses? Here are some samples:

* 9/22/08 Two telephone conferences with Gruver, draft email to Hedberg regarding 3710 Morgan, exchange multiple emails with Gruver, review proposed sales. 1.9 (hours?) for a total of $864.50.

* 9/30/08 Telephone conference with Gruver regarding proposed sale, draft approval letter. 0.40 (hours?) $182.00.

* 08/04/08 Review Suntrust response to contempt motion. (...) (And much more) 7.10 (hours?) $3,230.50.

* There are references to multiple calls and emails to "buyers" of the houses, but it's not clear whether any of the "buyers" actually purchased the houses in question. Clearly, the invoices reference multiple properties, and are not at all particular to 3306 James Ave. N. The lawyer working on this matter is one Gary Hansen, with everything cc'd to "Family Housing Fund c/o Mary Cullen Yeager" of the law firm "Faegre & Benson."

The documents appear to allude to an ongoing legal situation which is not yet concluded. After looking over the documents--clearly an incomplete, tantalizing piece of something larger--I'm left wondering how much the T.J. Waconia saga is costing the taxpayers on a monthly basis and how that money will be recovered.

Yet another good argument for putting the T.J. Waconia fraudsters under "house arrest" and letting them work off their sentence doing good for the community.

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CROSSING THE FINISH LINE! 3306 James Ave. N., A Former "T.J. Waconia House" Just Hit The Market

Flickr.com Photo

Word comes by email from real estate agent Jeanie Hoholik that 3306 James St. N., about which I have written quite a bit, click here, and also here, just got listed on the MLS...

Jeanie really outdid herself with the listing, slapping up TEN IMAGES of the house. While I was at Jeanie's office, I watched some video "virtual real estate tours" which have appeared on YouTube. I guess this is a new marketing thing, putting virtual tours on YouTube. If I learn of any virtual tours in Hawthorne, I'll try to put a sample on my blog or, well, ya'll are free to chime in on the comments thread and even post links.

"Sell, sell, sell," I say, as well as "buy, buy, buy." Our neighborhood is turning around rapidly, and much of the change is being driven by real estate agents like Jeanie.

There was a slight delay in listing 3306 James St. N. due to getting the oak flooring just perfect, and the extra effort shows in the MLS pictures. The house is currently listed at $139,000. I think the perfect buyer would be somebody working for the Minneapolis Fire Department, due to its proximity to an MFD training facility.

Jennifer The Flipper (not to be confused with Jeanie, Jennifer's real estate agent) has reportedly signed purchase agreements on two more North Minneapolis properties. Will she revitalize North Minneapolis ALL BY HERSELF?

Stay tuned to Johnnynorthside.com to find out.

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3306 James Ave. N. (Cute Starter Home With A Colorful History, PART TWO)

Photos By John Hoff

Here are a few more pictures I snapped at 3306 James Ave. N., at the end stage of its dramatic renovation...

From top to bottom, 1.) a more casual portrait of Tom, the contractor. He didn't see this one coming, so he looks more natural.

2.) Detail of the "keystone" feature over the front door. This was a golden opportunity for me to pontificate about the importance of the keystone to human history, because being able to support weight on stone arches allowed bigger buildings to be constructed, buildings which became important centers of religious and political administration. Though other construction methods have (mostly) surpassed the use of vaulted arches, one still sees decorative allusions and homages to the importance of the "keystone" in human history, as here at 3306 James Ave. N.

Given its central role as the first "special supervision" T.J. Waconia house to be renovated, 3306 James Ave. N. is indeed playing a kind of "keystone" role. This house shows it is possible to purchase and renovate these houses, and the bureaucratic hoops are not so difficult for QUALIFIED RENOVATORS with no history of being SLUMLORDS.

3.) Jeanie showing how open and airy the basement is, now that all the old partitions have been ripped out. I notice Jeannie's footwear is rather similar to what Connie Nompelis wears. Is this a real estate agent thing?

Note the copper pot hanging on the wall. I think it might be covering an old furnace hole, but the use of COPPER as a North Minneapolis basement decorative motif is an interesting trend.

4.) New plastic pipe. Sigh. See, this is why people will have to decorate their basements with objects made of copper.

5.) The old birdhouse in the back yard of 3306 James Ave. N., still awaiting renovation.

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3306 James Ave. N. (Cute Starter Home With A Colorful History, PART ONE)

Photos By John Hoff

Knowing my obsession with the T.J. Waconia mortgage fraudsters--who will apparently be sentenced to prison next month--Keller Williams real estate agent Jeanie Hoholik gave me a private tour of 3306 James Ave. N., which is nearly renovated and will be listed any minute, now...

I blogged about this home before, because it's the first of the houses sold under special court- mandated supervision, and now it's probably the first one to be re-sold or, well, "flipped."

And some people say the era of "flipping" is over. Not in North Minneapolis, baby! I hear lovely Jennifer The Flipper just made offers on two more houses, one in the Jordan neighborhood and one in Folwell. You go, girl!

Though flipping has a bad name, (only lately) I'll defend what Jennifer is doing: she's turning vacant houses into owner-occupied properties. In this case, the house at 3306 James Ave. N. used to be a rental...and kind of a sad one, though luckily set amidst nicer homes and right across from a training facility for the Minneapolis Fire Department. But now "3306" is cute as a button on a baby's belly.

The Real Estate Equivalent Of A Politician's Dark Blue Necktie

A contractor named "Tom" has been working on the place, and he's not partial to having his picture taken. Above, you can see Tom pulling out his hammer to express how he feels about portrait photography. Tom prefers to have his work speak for him. I had seen the "before" pictures, which I hesitate to even link to because THE CHANGE IS SO DRAMATIC. Everything is light, new, airy, polished, painted.

Jeanie taught me a few things about flipping as we toured the house. For starters, flipping a house is kind of like dressing a politician: you don't go with a quirky tie. You need something everybody can agree looks good. So there's a certain popular shade of floor tile, and counter top. Young buyers are apparently partial to polished steel fridges. Who knew? From walls, to carpet, to trim, everything caters to a moderate aesthetic.

Two bathrooms. That's the rule. That's what buyers want. So give it to them.

I noticed Jennifer's contractors were using plastic water pipe, blue for cold and red for hot. Gone are the days of copper pipes, sigh. It's sad, really. But the new pipe looked good.

Out in the yard, I noticed the shingles on the garage looked new. I turned around and realized...same shingles on the house. Also new. Black, of course. Nothing quirky with the shingles, like green "Timberline" brand. Nothing that looks like a patchwork quilt, to be creative and use old, multi-colored shingles; like a certain relative of mine has been known to inflict on farm buildings.

Clues To The "Past Life" Of 3306 James Ave. N.

If you know where to look, clues can be found about what the house was before...a rental, possibly with other rentals within it, people piled in thickly, shoved into corners.

The basement had been full of partitions, which had to be ripped out. Jeannie had seen what was there before and was thankful it was gone now, except for a few old marks on the floor which I suspected would get painted over. A big, run-down doghouse in the back yard was gone, too, except for a place where sod was missing.

I could blame T.J. Waconia, but I suspect they acquired the house like that, and had little opportunity to renovate and rent before the pyramid scheme came crashing down. But Jeanie thought it was just fine to blame T.J. Waconia, and good clean fun, too. When I pointed out the birdhouse in the back yard was wrecked, Jeanie said to blame T.J. Waconia.

"Seriously," I said. "That birdhouse is missing walls. It needs to be fixed."

"Let the birds fix it," Jeanie said. "Let them patch it with mud."

Well, I decided, maybe it was kind of cool to leave the old birdhouse as it was. After such a dramatic renovation of the house, few clues would be left of the past for the next owners to enjoy and contemplate. But the run-down birdhouse was an exception. Yes, I realized, let it be. Leave it for the next owner to lovingly renovate, as a kind of quirky personal project, or tear it down to assert domination and ownership of the back yard while the wife (of course) has control over all interior aspects.

Johnny Birdhouse

If it were up to me, I'd put birdhouses everywhere in North Minneapolis. I'd spend all day sneaking into the back yards of vacant, boarded-up homes, sneaking bird houses into the trees. I'd be "Johnny Birdhouse." Where would I get the birdhouses? Salvation Army. Or I'd build them myself, from old antique basement doors chewed on the bottom by vicious, neglected pit bulls, from odds and ends of wood, or from gallon-sized cans with kicky painted-on product motifs like Folgers Coffee.

Too bad I have other things to do, like blog. Oh, well. I can make sure any property which falls under my control has adequate birdhouses. I can advocate for the renovation of birdhouses, and appreciation for barn swallows, the official bird of North Minneapolis. (According to my blog)

Something Like 139 T.J. Waconia Houses Left To Go!

So that's one T.J. Waconia house down and...well, there are more. There are more houses to be bought, flipped, turned into lovely starter homes. GET 'EM WHILE THE GETTIN' IS GOOD, I SAY!

North Minneapolis is TURNING AROUND. I hear (secondhand, through Jeannie Hoholik) it's actually becoming difficult for Jenny The Flipper to find flipping bargains, because the properties are being snapped up.

This is both good news and bad news. Clearly, the current era won't last forever, and not for anybody: flippers, home buyers, home sellers, barn swallows that currently have endless expanses of vacant buildings in which to breed. History marches forward faster than I can write about its footsteps.

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Double My Money: The Story Of Selling My House At 3016 6th St. N. (Photo One)

Photo By John Hoff

I've delayed telling this story for a while, because--for tedious reasons too technical to get into--I simply didn't have the photos handy. But now the images are finally in my hands, and though only a few months old, they're like a blast from the past.

And my promise to tell the story is a blast from the past, too. I'll try to be good to my word, here...

So the deal is I bought 3016 6th St. N. with the intention of fixing it up or demolishing it and--as I so blithely put it--"popping in a modular home."

A Deal With The Devil

The day before closing, I had the purchase agreement in my hand and I was out at the property dealing with an incredibly blatant case of electricity theft. A certain low-income rental property tycoon came by and chatted with me on my soon-to-be front yard. The affordable housing baron wanted to know if I owned the house and, if so, how much I had paid.

Well, I didn't want to say I merely had a PURCHASE AGREEMENT. Until the property actually changed hands, I figured somebody who came along and offered more money could get their hands on the house. So I avoided saying, explicitly, that I only had a purchase agreement. Maybe I used a nebulous phrase like "it's a done deal."

He pressed. He wanted to know what I had paid. I said I'd paid $9,500, which was the price I was getting set to pay--if memory serves me--the very next day.

When I named that price, he was BESIDE HIMSELF. Arg! How had he missed getting the property for such a price? He gestured toward 3020 6th St. N. and 3024 6th St. N., both of which he owned--more or less, there being mortgage issues--both of which he'd paid a lot for.

I assured him I'd been watching housing prices like a hawk, looking to snap up something with a low ball bid. I told him how I'd bid OVER AND OVER and had bids rejected, but finally I found a seller who was willing to play ball with me. I didn't want the poor guy to feel bad. This was way before I knew how much crack-dealing was taking place at his property, and how he either turned a blind eye to it or...or...

Well, at a minimum, he turned a blind eye.

What would I take for it? he demanded. Right here, right now, what would I sell it for?

I named the figure of $17,000 because it was the last price listed on the MLS before I bid on it, and managed to force a steep price drop. As I named my price, I was gesturing with my hand. The Devil grabbed my hand, shook it vigorously up and down, and told me I had myself a deal. He would pay $17,000, but no more.

The Accidental Flipper

Holy cats, I thought. I think I just flipped a house.

So I closed on the house. And right away, I was dealing with The Devil to resell it.

Of course, I knew The Devil's nature, but I figured I'd just sell the house and buy a better one. What did it matter, as long as I could find a better place to have visitation with my son? But right about this same time, I was becoming friends with Peter Teachout. I was trying to make my block more secure. I didn't think that nailing boards up over crackhouses to keep the crackheads out was so spectacular...it just seemed like the good sense of country boys and soldiers, both of which make up a big part of my persona. I figured if I did it, other people would take heart. In the middle of this, 612 Authentic arrived to make videos for MinnPost.

What a block. What a life. What exciting developments. I felt alive and part of things, and blogging about it the whole time.

I was told the City of Minneapolis wanted my house for their visionary "Eco Village" project. I'd moved smack dab into the middle of the Eco Village and not even known about it until after I was in the way of their backhoe. In the meantime, The Devil was taking his sweet time. He had a contractor over at the house to make some estimates. He kept negotiating terms, angling for a contract-for-deed.

A certain mover and shaker in the neighborhood--and it WAS NOT Jeff Skrenes--chatted with me on the sidewalk while a reporter for MinnPost interview some of us. We cut a deal of sorts. I said I'd sell the house to Minneapolis for what the slumlord(s) were willing to pay, which hovered near $17,000. I offered to provide an "option to buy" for $1.

"How long do you need?" I asked. "I mean, realistically?"

The answer was in months, not days or weeks. OK, I said, worrying that a backhoe would show up in my front yard before a check showed up in my hand, I'll work with you. I'll try to do the right thing, here, instead of the fast, easy and highly-profitable thing, which would have involved "closing" on the hood of a car in the parking lot of a bank, where a notary public might be found to notarize a "quit claim deed."

The Devil kept referring to such a document as a "quick" claim deed. I didn't bother correcting him. When your moral compromises are this deep, grammer be damned.

Moving At The Speed Of Government

This was when I first heard an amusing phrase: moving at the speed of government. So it took a while. It took a very long time. There was talk of having the Hawthorne Neighborhood Council cover the closing costs, since that was part of the deal: I wouldn't pay closing costs. After all, my "deal with the devil" involved no closing costs.

In our hellish little arrangment, it worked like this: The Devil would look over my closing paperwork in its attractive plastic folder, satisfied that I had just closed on the house and I owned it, outright. A quit claim deed would be sufficient, but he would be the one to have the document drawn up, not me.

If I somehow engaged in double dealing--say, by selling it to somebody else on the hood of ANOTHER car the previous night, but then selling it again to The Devil the next morning--that was quite alright. Such a betrayal would be dealt with through "the law of the streets," he said, with an evil grin.

I assured The Devil that "the law of the streets" would not be necessary. I owned the house, heaven help me. But this was certainly another good reason to sell the house to the City of Minneapolis instead of The Devil. The closing ceremony was so much nicer. I seem to recall there were mints and free soft drinks.

The Devil was NOT HAPPY about me making a better deal with the City of Minneapolis, I can tell you. At one point, he called me on the phone and said he'd been to a casino, and he was winning, and he'd pay me $17,000 in cash all up front. Forget what he'd said about a contract for deed. I assured The Devil that if my deal with the City of Minneapolis fell through, I'd come crawling back to him on hands and knees.

But it didn't happen like that. Minneapolis was slow, but true to its word.

"Quiet Enjoyment" Of My Property

On the appointed day and time, before the closing, some kind of inspector showed up from the City of Minneapolis to make sure all "debri" was removed from the house, to see what needed to be removed, salvaged, abated, and so forth. It was an easy process. On the day before closing, I cut the lawn, and at that time I took a picture of "my tree."

Yes, see it above. MY TREE. The tree is still there and, indeed, it might be there for many years to come even after the City of Minneapolis demolishes the house. But I wasn't going to own it any longer, and I wanted a picture of it. My tree. My lawn. My deck. My spacious back yard. My decrepit historical chimney revealing the true age of the house, despite the modern siding.

The person closing for the City of Minneapolis appeared...bored...on the other side of the huge polished conference table. She did closings all the time, she told me. For me, this was a big deal. For Minneapolis, it was just another property. I took my money and ran. I started looking for my next house.

What Do I Know From Taxes? :)

I understand the tax assessed value of the house at 3016 6th St. N. is quite high, despite the low sales prices. Well, first of all, foreclosure sales are not considered proof of value. I've heard that from somebody at the assessor's office who is forced to deal--quite often, it appears--with individuals appealing the value of their properties.

The fact the tax assessed value was 6 digits when I bought the house doesn't bother me. I didn't have an opportunity to appeal it, since I never owned the house in January or December, which is roughly the time when tax assessments need to be appealed. If not appealed, the tax assessments remain in place.

As for why the value may be so much more than the last sales price...the City of Minneapolis owns the property next door, so the lot for 3016 6th St. N. now has the potential to become part of a super-cali-fragilistic-ex-pee-el-oh-doe-shush back yard. So the fact the property value is now something like $47,000 makes perfect sense. At one time after the sale, the value may have been listed higher but I assume that was just some kind of bureaucratic adjustment made before some kind of final determination, blah blah blah.

WHY AM I GETTING INTO ALL THIS TEDIOUS DETAIL? Well, there is a certain T.J. Waconia-affiliated (expletive) hole who insists some kind of "dirty deal" was made with my house, as shown by my profit margin and the tax assessed value of my (former) house.

Uh huh. Well, the famous CitiMortgage house at 415 31st Ave. N. sold for $18,500, which is a very similar price. The taxable value for THAT property is ALSO currently six figures. I guess the problem with people who hang around T.J. Waconia is they assume EVERYBODY ELSE engaged in shady, dirty deals.

As They Say In Dixieland, "All Lived Out."

Part of me felt bad for the old house, but I considered 3016 6th St. N. was like a person at the end of their life whose best days are in the past.

Personally, I think houses should be lived in until they fall over from relentless catapult bombardment by radioactive mutant zombies, then the houses should be cut into pieces and burned for warmth in a Franklin stove, the malleable metals extracted first, of course, useful nails sifted from the ashes.

All of my close, personal friends know the depth of my convictions in regard to recycling, and I'm sure the anecdotes are passed along with rolled eyes and shakes of the head: how John Hoff said, "Fork 'em over" rather than allow a friend to waste a handful of French fries, or walked outside to throw his ice on the lawn, not in the trash, with a little sermon about making a "drink offering" to The Earth.

Recycle EVERYTHING, I say. Including cans, shoes, old houses. Including the mortgage fraudsters from T.J. Waconia, who might be more useful to the neighborhood under "house arrest" than sitting in a federal prison, click here.

But there is more than one way to waste resources. Allowing a neighborhood to fester into a slumlord paradise of rundown, low-value houses creates an environment where more will be spent yearly on 911 calls than can possibly be collected in property taxes. How is that "conserving resources?"

Thus I defer to the wisdom of the City of Minneapolis in regard to the need to relentlessly bulldoze my former house into kindling. And I like the idea of flowers growing on the spot once more.

I am easy. I go with the flow.

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