Being the amazing, true-to-life adventures and (very likely) misadventures of an Afghan war vet who seeks to take his education, activism and seemingly boundless energy to North Minneapolis, (NoMi) to help with a process of turning a rapidly revitalizing neighborhood into something approaching Urban Utopia. I am here to be near my child. The journalism on this blog is dedicated to my son Alex, age 15, and his dream of studying math and robotics at MIT. Email me at firstname.lastname@example.org
Monday, October 8, 2012
"A Pretend Real Estate Pro Who Was Caught Drinking His Own (Metaphorical) Bong Water," Chapter Two Of The Evil Anti-Johnny Book Of Revelations...
Contributed photo, blog post by John Hoff So, to continue with my long-overdue discussion about Jim Watkins, the evil anti-Johnny blogger, there's more to say about his "Foreclosure Can Happen To Anybody" story which ends with the memorable line, "GO LIVE WITH YOUR GRANDMOTHER." After reading the draft of the article Jim forwarded to me (he didn't ask for any kind of confidentiality and indeed his line about how I was a guy who could "stir things up" made me think he was kind of hoping I would publish it) I thought to myself, "Something went really wrong here, but I need help understanding this situation Jim describes where he might have to go live with his grandmother." So I forwarded Jim's "woe is me" story to an expert on real estate for his/her reaction... I asked my expert to keep the article under his/her hat because I didn't want it to end up all over the internet. For one thing, at the time I was oddly fond of Jim Watkins and I figured it would harm his reputation as a real estate teacher. For another thing, well, the info was in MY possession and I didn't want somebody else to write a story along the lines of, "Self-Described Best Friend Of TJ Waconia Fraudster Is Having His Own Real Estate Woes, May Have To Live With Grandmother." Here's what my expert wrote back in response to my request to "keep it under your hat." Don't worry about me passing this along to anyone, Jim is an inconsequential actor -- a pretend investment real estate pro who was caught drinking his own bong water. Though that email might be the funniest thing I have ever read - you should send that to the American Psychiatric Professionals Association as a textbook case. Notice how none of this is his fault? This, (paraphrased) part had me rolling:
"It was the market, and the market is wrong about the value of these properties, and once it recovers..."
Reminds me of the old investing line: "The market can stay irrational longer than you can stay solvent."
And then how when his stupid real estate bets go south, he gets the knives out for everybody who was involved?
Take this story, multiply it a couple of hundred thousand times, and this is the problem with the real estate market. Rank amateurs thinking they are going to be the next Carlton Sheets making stupid bets on the real estate market that don't work out. It is the business equivalent of shitting in the water supply, since eveybody will eventually pay the price for their antics.
This is also why many of these retard "investors" ultimately gravitate toward fraudulent flipping to straw buyers, because they quickly realize that lacking capital, and anything resembling expertise, fraud is about the only way to make money doing it.
I can't figure of Jim was too stupid, not stupid enough, or maybe not a good enough salesman to have jammed a straw buyer into one of these deals at a bogus value. Probably a combination of the three, though I'd be willing to bet that Jim has (THE REST OFTHIS SENTENCE WITHHELD FROM PUBLICATION BY JNS BLOG)
It is also amusing that he had to use hard money to buy these "flips." This is what happens when lenders lend to people in situations where the ONLY way the loan will work out is via a successful flip. Real lenders don't lend this way, just hard money lenders and dealers in fraudulent subprime junk. A good enough rule of thumb for property investors is if you can't get real financing, and the only way things work out is if you successfully flip the property, then you shouldn't be dicking around with that line of work.
And to think people were actually taking classes from this clown, and paying him. Go live with your grandmother. What a great line. JNS blog notes: The word "bong water" was written as one word in the original email. It is, however, two words and not a proper compound word. And clearly, the phrase "bong water" is a metaphor and does not refer to actual bong water. The metaphor appears to be similar to Jones Town cult Kool Aid or a snake oil salesman who swallows his own, shall we say, bull twaddle. Also, the line GO LIVE WITH YOUR GRANDMOTHER did not appear that large in the original email. The sentence about "willing to bet" is clearly just speculation based upon similar situations but for purposes of avoiding needless litigation, I have redacted part of the sentence. The sentence catches my interest, however, and I am looking into it. In my next blog post about this subject, I hope to dig into a very interesting situation I found in some documents from Texas. However, I am still putting pieces together. And, of course, what I write about also depends on my mood and whether something more amusing comes along than "a pretend real estate investment pro who was caught drinking his own (metaphorical) bong water."
Oh, wait, I just have to say it ONE MORE TIME. GO LIVE WITH YOUR GRANDMOTHER!!!!