Tuesday, May 11, 2010

Property Investors Mark the High Point of the Hawkman's Weekend

Post and photos by the Hawthorne Hawkman

About a year ago, Connie Nompelis and I spoke to a group of investors about what the real estate market in NoMi was like at the time. We also told them how our community had been burned by predatory investors. I remained on someone's mailing list from that event, and had received invitations to go on "foreclosure bus tours." This weekend, I finally did go on such a tour, led by the High Point Group. The pictures above come from my Blackberry and are of an interior of one property we toured.

I was skeptical before I even got to the event. For one thing some emails said that they would be willing to write up offers as soon as the bus tour was over. This kind of (potential) buying almost sight-unseen brought to mind recent mortgage activity in the EcoVillage. I expected one of two things from this tour. I'd either remain silent, taking copious notes in anticipation of a scandalous - albeit mortgage geeky - tell-all blog post, or I'd call out the scuzzy, slummy behavior that was harming our communities and be such a killjoy that the investors would drop me off at a gas station and make me find my own way home.

What I DIDN'T expect, and what REALLY happened, was...

...that I was rather impressed with what I saw.

This is a partial post, due to the technical difficulties with the JNS pdf support site. I consider the pdf documents from the event to be crucial to this post, but can't sit on it any longer.

Let's get what I DID NOT like out of the way first, shall we? I still prefer to view houses as HOMES and not as vehicles for investment opportunities. Too much of the latter is exactly what got this country into a mortgage crisis, and north Minneapolis was suffering from such irresponsible behavior long before it caught on nationwide.

Group leaders explained in great detail how they recommend purchasing properties where the loan-to-value ratio is low enough to allow them to pull their cash out using a commercial line of credit. Then, with that property "cash flowing," they can use the proceeds to pick up another property or few, and repeat as needed. While this may be a sound business strategy, we've seen it explode on us here in NoMi all too often. So I remain cautious at best regarding High Point.

But the first house on the tour, 922 Minnehaha Ave E in St. Paul began to put me at ease. First off, what do we have here?


I wasn't taking many pictures at this point because I was still thinking I'd be "under cover." As we drove to this house, I looked at the High Point Group's analysis of the property. They claimed that there were five bedrooms, even though the MLS listing said there were seven. Once we arrived, it was clear that there was no way this house had seven real bedrooms. The exterior needs some touching up, as the place is full of "kludges." But there were hardwood floors throughout much of the place, and once the makeshift closets were removed from living room areas, the house would be quite appealing.

The leader of the tour, Michael Mangan, was asked if he would put carpet down, and said "absolutely not." He might give his tenants a carpet allowance for area rugs, but he would keep the hardwood floors. They're a better investment and tenants tend to mess up carpeting when moving in or out. Furthermore, as the investment analysis indicated, he said he would pare down the number of bedrooms because some spaces clearly were not meant to be used that way.

It's not clear if the investors on the tour agreed with him entirely, but I was thrilled to hear these things being articulated. Other conversations around specific rehab options, while perhaps not optimal, were far better than the kind of work we've seen from the likes of Paul Koenig, Mahmood Khan, Bashir Moghul, and even better than the "not the best, not the worst" line we get from time to time.

It was around this time that Michael recognized me from last year's presentation. Seeing as how my cover was blown, I was now free to take pictures at other properties.

Next, we went to 1807 Reaney Ave E, in St. Paul. This was a small crackerbox of a house, and so nondescript that I didn't even bother with pictures. I did, however, remember in great detail a few of the conversations I had with Mangan and others.

Mangan said that he prefers section 8 tenants because he has their section 8 eligibility as leverage over them. If the tenants are damaging the property, causing problems in the neighborhood, or otherwise being a nuisance, he can contact their case worker and perhaps have their section 8 eligibility revoked. I have no proof of how he manages his properties and tenants, but this is the first time I'd heard a landlord/property manager talk about section 8 as anything but a means to produce a steady income stream.

I also spoke with one of Michael's co-workers who said that High Point has properties in the Hawthorne neighborhood. I invited her to come to our next housing committee meeting to get to know the residents, and she accepted the invitation.

Another woman talked to me about she prefers to buy homes and sell them on contract for deed. In NoMi and other parts of Minneapolis, we've seen landlords employ this tactic as a way to get around the rental licensing and inspections requirements. Instead, this woman said she used the contract for deed as a way to give her renters/clients/tenants a vested interest in the property. She selected only people that had a realistic chance of refinancing, and set up the contract terms in a way that encouraged success. In her experience, this was the best way to make sure she got good tenants.

Mangan also strongly advocated against buying and quickly turning the property for a profit. Instead, he recommended carefully selecting which properties to buy and hold over the long term.

Our third and final house was 277 Annapolis St E, in St. Paul. The pictures before the jump were of the woodwork inside and the foolishness of the previous owners, who covered the hardwood floor with cheap tile.

Do you ever wonder what it would look like if a rainbow ceiling fan were to somehow explode and cover a room in hideous combinations of every color imaginable? Well, wonder no more.

Pretty much every room in this house looked like that.

The other conversation of note that took place at this property was when one of the investors asked Mangan if he would convert anything into more bedroom space. The basement was already partially split up in the middle of an attempt to do just that. The response was, "This house is solid as a three-bedroom home. Why try to make it something that it's not?" Music to my ears.

High Point also provided a list of their "Metro 100" properties they felt were good potential investments. Once the pdf site memory issue is fixed, that list will be posted. I'll use my special Hawkman vision to look for mortgage and real estate connections that are invisible to the untrained eye. The third pdf addition will be High Point's "best buy list," in which they explain in detail what kinds of returns can be expected from specific investments. No addresses are attached to that list, presumably so that investors will go through High Point for those services.

When slumlords have been profiled on JNS, the question has often been asked, "When are you going to profile the GOOD landlords?" Based on much of what was SAID during this tour, High Point Worldwide may give us a chance to do just that. I've said from day one as housing director that it's simply not realistic to think we'll get out of this housing crisis without landlords and other investors. I've also said that I hope landlords and investors who do right by my neighborhood find ways to be incredibly profitable.

(That being said, I'd rather have a good owner-occupant in a single-family house instead of having more places be investor-owned.)

But the proof of whether High Point fits that profile depends not on what they say, but on what they do. So we'll put them under the microscope here on JNS and hopefully we like what we see. More posts are forthcoming as pdf site issues get resolved.


Ranty said...

Well, this is encouraging. Thanks for going, Jeff.

Patrick said...

Yes Jeff, thank you. I too found it informative. I can't wait to see the additional information you have.

Ryan said...

High Point is quite an amazing group as they have managed to build their business to be incredibly efficient while maintaining the proper respect for property and people at the same time.

I'm one of the organizers of MnREIA and HPG has been a staple in our community and in this past month I've finally taken the opportunity to take the bus tours myself, along with a class hosted by Mike. From what I have experienced with High Point and Mike Mangan has been really encouraging.

You can tell through Mike's demeanor that he is obsessive about everything lining up in a win-win situation for everyone involved from the bank holding the REO, to the investor, his business, tenant, and community by focusing on doing things right by what's right.

His whole business really is a thing of beauty but my favorite part about the tours and any message he conveys to investors is that he consistently promotes prudent investing habits and shedding light on reason that encourages any investor that they can make a profit from their investment while doing the right thing for everyone.

And kudos to his business for being set up in a way where it makes it easier for investors to do things right.

"I've also said that I hope landlords and investors who do right by my neighborhood find ways to be incredibly profitable."

High Point really does a lot to promote this and so do we here at MnREIA and we don't appreciate slumlords any more than you do. They disfigure the image of investors as a whole, making it that much harder for us to get options across to those who need them and bring houses back to life.

Any investor worth a damn surely knows that adopting tenants that are bad for the neighborhood are bad for their investment. I've met slumlords (not in the association, but out and about) and they have the opposite frame of mind than the investors we deal with. Why do I think this? Because they're so cocky that they don't think they need to learn how things should be done and they have no regard for anything in their behavior. So their not coming to MnREIA, they're just sucking the blood out of neighborhoods and ruining properties for as long as they can get away with it.

I was really thrilled to read this post because they are a great representation of the real investors out there who are good people that aim to do right by all, including the neighborhood.

Kandis Knight said...

The next Foreclosure Bus Tour is DECEMBER 4th....please call (651) 636.7355 to register. Saturday, December 04, 2010 Minneapolis/St. Paul, MN 8:30am-12:00pm : FREE

Nate said...

Prudent? What a joke!! Mike Mangan has had several failed business adventures as well as numerous personal financial failures over the past six years. If anyone wants to throw their time and money away on this "Tour" or "Education" crap, then please email me because I can show you the ropes for investing FOR FREE. You dont have to listen to this Yutz talking about things that most of you already know and can easily find our for free on the internet. Save your time and money or get hooked up with someone who really IS a Millionaire and Success, not one pretending to be one...

Anonymous said...

Mike Mangan is a sociopath and pathological liar. BEWARE. Do not "borrow" or "invest" a single cent with him unless you never see it again. Mike is a failure in every way, and his stories about businesses successes are just that: stories and lies. Mike "borrowed" hundreds and hundreds of thousands of dollars from dozens of people in that last several years. Mike Mangan lied to these people about what he was using their money for, misspent this money, and then refused investors access to the financial info. When heat started building from people wanting to know where their money went, Mike filed bankruptcy. His bankruptcy declarations revealed massive lies about his purported experience and abilities. Mike Mangan was never in any position to give anyone any real estate or business advice. Mike Mangan's web of lies was corroborated by his sister, Margaret Uriah and his accountant, Tracy Berneck, both of whom knew the truth about Mike and covered for him. Mike's bankruptcy was canceled once Mike was found to be lying under oath about his finances as well as hiding secret bank accounts and cash gifts in excess of 10k from the court. The massive amount of money Mike "borrowed" is not dismissible by bankruptcy. Mike Mangan will be held accountable legally for his actions, but in the meantime...STAY AWAY FROM MIKE MANGAN. He is a dangerous sociopath. Search his name online for additional info.

Johnny Northside! said...

And what brings on THIS anonymous rant?

Anonymous said...

I agree, I left High Point in January 2010 I believed in the "dream" of High Point.....last I heard he was DBA under the name Fortune Forward and stopped attaching his personal brand to his business....if you meet a guy who is toooooo good to be real....with a killer smile to match he is usually the devil and you should run because he can and will convince you to buy land in Alaska!

Anonymous said...

P.S. Mangan was so happy when he felt he had "Johnny Northside" in his pocket....looks like this post will now be his wall of shame...good riddens he messed up alot of people's lives trying to maintain his ornate Summit Avenue "lifestyle" (you have saw the Mangan Castle on Summit Avenue right? It is huge!!)

Anonymous said...

Stay away from Mike Mangan and never, never, never get into a situation where he is your tenant. He is the most horrible and untrustworthy individual I have ever had the misfortune to come into contact with. I hope he comes to a bitter end in a place where he can't hurt anyone. I hope it happens soon What a total FAILURE and SCUM of a person,

Johnny Northside! said...

Your opinion. But tell me more details.

Anonymous said...

Johnny..I hope you have now googled Mike Mangan and have seen the postings on liarscheaters.com.

Anonymous said...

Crazy scorned women! There is a restraining order on her and she just violated her order.

Anonymous said...

Ironic lie.
Mike Mangan has 6 Criminal Charges against him so far, plead guilty to 2... for Stalking, Domestic Abuse, and Harassment. Gross Misdemeanors and Misdemeanors. It's Public Record, Moron.

Anonymous said...

Ha ha ha

Looks like Johnny Northside has been conned by Michael J Mangan. He. Is. That. Good. (I bet Johnny honestly thought Mike did not notice him until after a few houses. Snicker)

Folks, if you are an investor, keep your money away from peddlers like Mike Mangan.

You've been warned. Try Google. Go to the court archives online. If after that you still do business with him because Johnny Northside approves of him, its your money. But don't blame anyone else in 12 months when you are living in the streets.

Johnny Northside! said...

First of all, anonymous commenter, you are quite confused about who wrote the blog article. It wasn't Johnny Northside. It was Hawthorne Hawkman.

Secondly, Hawkman didn't get conned. You comment, though I have approved it, is confused and stupid.

Anonymous said...

"Ha Ha Ha?" and "snicker"? Are you Nelson from the Simpsons? Or just 12 years old?

I have to agree. That is one confused and stupid comment.

How very prescient and heroic of you to give a warning after the fact. Next are you going to caution against investing with Bernie Madoff? Tom Petters? Or maybe Denny Hecker?

Thanksssss, Oh Prescient One.

Mike can look forward to a losing legal battle against criminal charges, and then spending the rest of his forties being ass raped in prison. Far better than what he deserves.

Anonymous said...

Is this Laurel Hedlund ?

Anonymous said...

I agree. Someone is probably going thru some extreme narcissistic rage and have lost sight of who they are and what they are doing...the 12 year old comment gave it away.

Anonymous said...

Crazy one,

Don't cha think you should get some psychiatric help by now?

Anonymous said...

Mike Mangan, you know you're in trouble when you can't keep straight all the people rooting for your date with jail. On the liars cheaters site, there are dozens of facebook "likes" from people who know the truth about you, and despise you.

Here are some helpful tips:

Don't pretend to be multiple people in order to agree with your own nonsensical posts.

Don't claim someone is crazy because they gave any potentially useful info to the authorities. Save your act for your judge and jury. They will appreciate the comedy routine.

Don't embezzle money or run a ponzy scheme. And if you are dumb enough to do that, don't do electronic bank transfers of investor money from your business account to your personal account. And if you are dumb enough to do that, don't accidentally release these bank statements to your theft victims.

You will win a Darwin award for dumbest criminal.

Anonymous said...

I think Mike was attacking Laurel because he was having a tantrum that she ruined his bankruptcy attempt a couple years ago when she found out he was a fraud. When she got evidence from other victims, she used it to pin Mike down at his bankruptcy Meeting of Creditors Hearing and showed he was lying under oath a bunch of times when he kept changing his testimony 180 degrees. Its all in the court records. Now everything is coming around for Mikey, and he is being sued by his bankruptcy trustee for ~50k. Plus he can’t ever escape his debtors since his bankruptcy was dismissed. Plus he knows that criminal charges are coming.

Johnny Northside! said...

Posted the info above but its veracity unconfirmed. Feel free to keep talking among yourselves in a substantive way, it's so much better than the usual "Johnny, you're going to die, bitch" anonymous comments.

Johnny Northside! said...

To the anonymous commenter whose dozens of comments I have been rejecting and will pretty much continue to reject...

If I packed my bags and moved out of Minnesota then WHAT? Is this an offer to parlay?

Anonymous said...


Johnny Northside! said...

Well, this forum is rather public. How about we email? If you don't want to reveal your identity (and it's pretty clear you don't, but it's a pretty small circle, isn't it?) then why don't you just, I don't know, get a fake email and email me. I'll let you know on this thread when I've sent you a message so you won't be disappointed to check your email all the time if the conversation takes a while.

Anonymous said...

Scratch, the tic-tac toe playing chicken, loves jelly on his macaroni.

Johnny Northside! said...

To the commenter who contacted me behind the scenes about this thread. I don't know anything about what's going on, but if you think your life is being threatened by somebody then report it to the police. I don't take down comments, especially substantive comments about issues impacting my neighborhood.

Anonymous said...

Maybe it's just time to admit this article needs to go away...


FYI, those of use who shared an office with him aren't that surprised. A little bit, with the hit list and all, but not that much.

Johnny Northside! said...

In regard to the linked article...

HOLY COW!!! Unbelievable!!!!

Johnny Northside! said...

Michael Mangen, mentioned in this article, accused of terroristic threats and plotting murder.


Peter McCarty said...

I had the misfortune of doing business with Mike. I ate my loses and moved on. What goes around comes around. Enjoy you time with the criminal justice system Mike, you deserve it!

Anonymous said...

I believe what "Anonymous" is trying to convey (& not very well, because this topic is VERY heated & emotional for those involved.)
The group of people that were duped by Mike Mangan, Margaret Uriah (& their accomplices)have been battling Mangan's fraudulent behavior for YEARS! A rave review of Mangan or any of his businesses is like a dagger to the soul knowing what this sociopath is really all about.
Unfortunately, Hawkman WAS duped as well. Mangan MOST CERTAINLY recognized Hawkman well before he singled him out. EVERYTHING with Mangan is an act. Mangan's gift is that he will surround himself with actual legitimate successful people, listen & watch as to the way they talk & handle themselves and then MIMIC them to a tee. He has no secret to success. He has just done a lot of studying to get into certain circles & then lapped up their words & actions to pass on to others as his own. Often implementing their (successful people's) accomplishments as his own.
He was even able to con Hawkman by paying attention to what Hawkman said during his speaking engagement & then regurgitating Hawkman's words/ business theory to the group in front of him (acting as if he didn't recognize him) This, unfortunately, is classic Mangan manipulation. "This was music to my ears"-Hawkman. This comment is EXACTLY how Mangan manages to scam legitimate business people. He cons legitimate business people with a great reputation to vouch for him on his behalf, to give him legitimacy. By the time the "pro" (Hawkman) has realized he has duped & endorsed a criminal, it's too late. Mangan has picked up a whole new set of "followers" off the endorsement of the trusted professional (such as Hawkman)

The liar and cheaters website holds very valuable information as to his MANY lies & scams.
If you need more proof that Mangan is the exotic sociopath rarely found in the wild.... please google his name. The proof is undeniable.
As for "Anonymous" Hawkman & John Northside....
Boys, don't be too hard on "Anonymous" you have NO IDEA of the road that person has had to travel in relation to Mangan. When people lose their LIFE SAVINGS, CHILDREN'S COLLEGE MONEY, OR THEIR ACTUAL HOMES due to the fraudulent dealings of a sociopath they tend to be upset. As would you if the tables were turned. Don't forget some of Mangan's victims have spent 100's of thousands of dollars pursing Mangan legally in hopes of finding justice. .
Hawkman - Don't fret over being used by Mangan as a tool in his elaborate scams. You are most definitely in good company. Mangan scammed hundreds of legitimate smart business people for years. Doctors, lawyers, investors, women & men alike.... Thankfully he snapped (& no one was hurt) so that we could put this dangerous, manipulative, sociopath behind bars.
I realize at the time of this original post there was not a lot of negative info out there that you could count on. Now that the Liars & cheaters website has been up for a couple of years with dedicated people manning it with accurate & re-searchable information, the damage Mangan has been able to inflict has been minimized. & now thankfully he is in jail.
Real Estate in MN will be a much safer venture now that Mangan is behind bars & looks like he will remain there indefinitely.
It goes without saying that real estate can be very lucrative & fun. However, PLEASE do REAL research when spending your money or time with investor gurus that claim success. I would stick with the VERIFIED professionals.... In today's day & age of instant information it doesn't take long to verify someone's credentials. If they claim to have done / accomplished something & you can't find legitimate record of it.. keep moving