Monday, December 14, 2009

Does this House Look Like it's Worth $2.5 Million?

Guest post and photos by the Hawthorne Hawkman

During a routine investigation of housing issues in Hawthorne, I came across this gem. It turns out that 2420 Bryant Ave N is owned by Pamiko Properties, in foreclosure, and the amount bid at the sheriff sale was over $2.5 MILLION.

Well, to be precise, we're talking about $2,548,206.06. And the speculated reason for this exorbitantly high amount is that...

The $2.5 million is likely a line of credit used to purchase multiple properties. If that is the case, let's assume that this line was used to buy 25 properties at an average of $100,000 per house. Now if I were that lender (in this case, Minnwest Bank Metro) I'd set up that line of credit so that each house purchased would have a lien against it. That way, if the borrower defaulted, I'd have all of those properties as collateral for my $2.5 million. I'm guessing that's how it's set up, but I don't have the details just yet.

So what other properties are included in this $2.5 million? The Hennepin County website should have those details, but does not at the time of this post.

But wait, there's more! A JNS reader posted a similar question about a property in Willard-Hay, 1417 Logan Ave N. This one is also in the post-sheriff sale state of foreclosure. The mortgagor, once again, is Minnwest Bank. The amount bid at the sheriff sale on this one is a cool $1,900,779.76. And the same reader who clued us in about this mentioned another million-dollar foreclosure but did not give an address. There's definitely something going on here...

And in case anyone wonders what $1.9 million gets you in Willard-Hay:

I looked in the replaced window (which nobody even BOTHERED to clean out the broken glass from the frame or sweep up the pile of shards from the floor, and saw what looked to be a hastily-vacated unit. There were also piles of dog or cat feces throughout the living area. I would have taken a picture of that, but really, wouldn't you just want to take my word for it?

The waters get murkier still. Mention the name "Pamiko Properties" or Paul Koenig to any Hawthornite who knows their history and you're sure to get a nasty look and a comment like, "Oh, you mean the guy with the DREAM HOMES?!" I haven't had a chance to get the full story of what went on, but it's clear that something strange and contentious happened. JNS readers are encouraged to give me and other readers a history lesson through the comment threads on this blog.

Some folks have reported positive dealings with Koenig and Pamiko, however. When there were problem tenants at 2211 4th St N, residents said that Paul Koenig was VERY receptive and quite proactive in terms of dealing with these occupants. But suddenly, those communications stopped earlier in the summer. Why would that be? Well, the Hennepin County tax website lists Minnwest Bank as the owner, so it would appear that Pamiko lost or will soon lose this property to foreclosure as well.

More recently, it was reported that workers were removing items from 621 26th Ave N, another property owned by Pamiko. When asked what was going on, they replied that the city had bought the place (public records do not indicate a change in ownership and my search of the MLS does not show it listed for sale in any way, although this property IS at least one or more years behind on property taxes). The workers went on to say that they were allowed to take out personal property, and were seen removing a bathtub. Fixtures are generally NOT considered personal property, and based on this behavior, anyone who sees workers removing items from this place (and by extension, any other property owned by Pamiko) should play it safe and call 911. If they have the proper paperwork, let the cops sort it out. By the way, if Pamiko needs bathtubs, I know where they can get some.

(I'm not encouraging this to turn the screws on Pamiko or any of their contractors. I want to keep houses from being stripped of what makes them livable and desirable, and if there is openly criminal behavior happening then it's best that residents call the police instead of confronting it directly and putting themselves at risk.)

So where did all the money go? And what other properties are owned by Pamiko that are in foreclosure? It's also worth pointing out that many of the properties listed above have open rental licenses, meaning that they could be rented out to unsuspecting renters - maybe even using emergency assistance. Something tells me this is just the tip of the iceberg for Pamiko Properties.


Ranty said...

621 26th last sold in May of 2008. It is the second of two houses I went through on the MinnPost "under $25k" video.

It sold for $15,9, and as I recall, the city had slated it for demolition but the purchaser hadn't checked on that before buying it and attempting to do some work on it. I recall a stop work order... and then nothing.

Perhaps the city is finally going to take it own after all.

Margaret said...

Have you checked to see if Pamiko is still licensed with the State? Maybe they got overextended and went belly up like a lot of other builders/contractors.

Johnny Northside said...

Great work on the post, Jeff, but a super big thanks to the oh-so-anonymous reader who dropped those valuable nuggets of info about Pamiko Properties.

As for the folks involved with the so-called "dream houses," here is my musical commentary:

HC said...

Add these to the list from Hillside:

1608 Hillside Avenue N
1611 Hillside Avenue N
1647 Hillside Avenue N

Johnny Northside said...

I recall the "Cease Work Immediately" order on 621 26th quite well, in fact I blogged about it here:

Johnny Northside said...

Hillside Chronicles, do you know of other Pemico properties besides the ones on Hillside? Do you have a comprehensive list? If so, please post. THANKS!

(Posting this comment from El Dorado, Kansas. The road calls me...)

Johnny Northside said...

Readers following the Pamiko Properties thing will want to check out the Hillside Chronicles blog:

Anonymous said...

A few more of his properties.

3053 15th Ave S, Minneapolis
1211 Knox Ave N, Minneapolis
818 19th Ave N E , Minneapolis
2321 Lyndale Ave N, Minneapolis
1403 21st Ave N, Minneapolis
2616 Cedar Ave S, Minneapolis
2402 4th Ave S, Minneapolis

HC said...

Correction...1547 Hillside Avenue N.

I don't have a comprehensive list...these are just the ones I see every day on Hillside and have first hand accounts of their conditions, but I know that there are others in Jordan...I think I had a tour of one on Girard Avenue and 27th. Literally, all one would have to do is drive around Jordan and Hawthorne and look for the ugly industrial hand railings and the tan/brown vinyl siding to compose a good working list… in fact, I think I saw a couple in Old Highland the other day.

Anonymous said...

The foreclosure sale was October 15, 2009. A search of the Sheriff's office foreclosure record for that date shows three properties owned by Pamiko that were all foreclosed. They are 2420 Bryant Ave N., 4652 Aldrich Ave N., and 1417 Logan Ave N. All addresses list the same lender, as foreclosing party, so I think these are the multiple properties referenced in the foreclosure sale record.

Interestingly, the foreclosure record for 1417 Logan Avenue N. shows Pamiko Properties, LLC and a company named MCK Investments, LLC as owners.

Geektopia said...

MCK Invenstments?

Hmmm... I think Paul Koenig's wife is named Michelle...

MCK Inventments = Michelle C. Koenig?

Enquiring minds want to know...

geektopia's keeper said...

I know for a fact that Pamiko owed/owns properties in Old Highland. Not sure of the addresses but maybe the Old Highland association should know or could help out.

Unknown said...

The Minneapolis, SLUMLORD directory.
-Your guide for where NOT to rent.

Love it! If your name makes this list you might be a SLUMLORD.

Every city needs a Johnny Northside.

We also need a "Good place to rent list". For reputable land lords and neighbors.

MeganG. said...

Hey Geekotopia and Geekotopia keeper...

do you think he lives in Prior Lake, that's what I thought I heard.. so I think this is him...

Paul Koenig

5791 Cardinal Ridge Trl SE

Prior Lake, MN 55372-3355

(952) 226-1944

Age: 40-44

A few years back, a bunch of neighbors visited the neighborhood of slumlord Gregge Johnson. We picketed across the street from his house. And we hand delivered some flyers describing the impact he was having on our neighborhood, we delivered those to each of HIS neighbors houses.

I'm thinking same thing for this guy. A little picketing demonstration by a bunch of northside neighbors.

Who's in???

1915bung said...

I'll go!

Anonymous said...

Paul Mark Koenig's wife is Michelle Lee Koenig and their 1st born son is Christian...So I belive that this is how they came up with "MCK" They love to play the LLC game. With Dream Home they had 50+ created by combining states abrevations. Pamiko is the 1st of each of the names PAul Michelle KOnenig and Marklee contruction is their middle names Mark and Lee. Paul believes that the LLC's will give him protection and make it harder for people to find them.
The address listed in Prior Lake is a previous address from before they got married.

I believe they are living at the million ++ home they built in afton:

1775 Majestic Pines Trl
Afton, MN

This is the home I know they built and Michelle's facebook page still lists them in afton.

As far as the "buckets" of $, this is something that was started in the days of dream home. They sold their story, lied on leases (overstated rent amounts) and moved $ around in accounts to look like they had a great business plan. Meanwhile the rents did not cover mortgages, taxes and utilities. Durring the dream home days the utilities where included in the rent. Find some of their old tenants and ask how many times the utilities had been cut off due to non-payment. Anyways back to the "buckets", this money was used to build and buy new properties and pay expenses and huge saleries and overhead. They had to keep building, buying and barrowing to keep the business going. Durring the dream home days they where way over staffed, had a $10,000 a month office rent in chanhassen, multiple company cars and each owner took a $20,000 dollar a month "distribution. They also wrote off every expense possible. As you can see by the path of distruction dream home caused this was not a good business plan. It looks like paul found some more "buckets" of money and has done the same thing. No wonder why the US has had a mortgage and real estate crisis!