"GO LIVE WITH YOUR GRANDMOTHER!!!" Humiliating Foreclosure Can Happen To Anybody, Oh Yes, Even Jim Watkins The Anti-Johnny Blogger, Here Is The Story In His Own Words Not Published Until This Moment, PART ONE OF "THE EVIL ANTI-JOHNNY BOOK OF REVELATIONS"

Photo and blog post by John Hoff, writing from a cheap hotel somewhere in Texas. The stars at night are big and bright 
(clap clap clap clap) DEEP IN THE HEART OF TEXAS

Like having an icky squashed camel spider on the sole of your army boot, the evil Anti-Johnny blogger Jim Watkins is a minor but annoying part of my colorful and rather high-profile existence. Most times I just ignore his rantings, ravings and vile spewings as the price of a kind of intensely local fame that I myself am responsible for, after all. Mostly, I disregard his comments (some quite scary) that come to my blog on a frequent basis (more than half of which I don't publish) some of which are definitely from Jim, and some I merely SUSPECT are from Jim.

For those who don't know, Jim's freaky obsession with this blogger started because of my writings about the TJ Waconia fraud which severely impacted North Minneapolis right about the time I arrived on the neighborhood scene. Indeed, The Adventures of Johnny Northside has a kind of creation legend which is intimately entwined with the spectacular downfall of TJ Waconia.

Early in 2008, when I was doing research on buying a piece of property in North Minneapolis, I became fascinated with the TJ Waconia fraud case. I began...



...researching stuff. In a short while I realized I had some relatively minor, but interesting information that wasn't conveniently available on the internet about the scandal. I began writing this stuff in comments on Behind The Mortgage Dot Com. It was almost out of a sense of citizenship. Here was a high profile scandal and I had picked up some nuggets of info. It was almost like my DUTY to make sure that info became easily available on the internet.

It was there on Behind The Mortgage that a guy named Jim Watkins began to participate in the online discussion, vehemently defending his friend Thomas Balko (and to a lesser extent the other criminal, Jon Helgason) of TJ Waconia.  I like to say "the chat thread grew so hot it began to radiate a strange and unearthly energy, transforming me into Johnny Northside, whose powers to fight evil through blogging are directed at evil doers in North Minneapolis."

However, at the same time, the radiation from the "hot thread" created my cartoon nemesis. The evil Anti-Johnny. He's so plodding and uncreative that he didn't even pick his own NAME. I mean, that name was given to Jim Watkins BY ME.

Imagine if Batman had to tell somebody, "Well, you kid around a lot. Joker. Why don't you try calling yourself The Joker?"

There was a time when Jim Watkins and myself could almost be friendly, to "agree to disagree" and sit down and break bread or at least pizza crust together. That's when the photo was taken, above, of Jim holding my cool book about dumpster diving with glossy and professionally designed  cover art, produced by a professional publisher and, well, um, Jim's special little booklet he put together all by  himself, yay, clap clap clap. 

When one of my friends looked at the graphics in Jim's book he asked, quite seriously, "Was this put together in the 80s?"

Jim styles himself a teacher of real estate, with a focus on buying abandoned property in Texas. Though Watkins grew up in New Brighton, Minnesota I've heard him spew at length about how much he dislikes Minnesota and really prefers Texas. I can understand feeling that way about NORTH DAKOTA, but, well, whatever.

The guy doesn't care for his own home state where he grew up and that's just sad. I understand Jim was suspended his junior year of high school for unauthorized candy sales but, really, time to LET GO OF ALL THAT ANGER. (That's not parody. This actually happened in 1988, and was the subject of a newspaper story. I may as well mention I was suspended my freshman year of high school for a water bomb incident involving a vice principal, but do I hate my home state? No, I love Minnesota. Except for the winter. One day I will be a snow bird. Now watch Jim get all unnaturally excited on his creepy blog and claim, once again, that I won't stay in North Minneapolis where I have vowed to live and die while turning our neighborhood around)

But returning to that strange, happy era when I could share pizza with Jim while he was using some kind of weird pen that secretly tapes, and I was all, like, why is there a little light glowing on your pen?

It was March of 2008 when Jim, who was writing for a real estate investment blog called Bigger Pockets Dot Com, sent me an email with the following preamble.

Hi John,

I decided to tell you about what is currently going on with me in my day to day life in Dallas. It has been a gut wrenching few months for me and I decided to swallow my pride and let you in on my situation in hopes that you may have some insight or advice for me. I know you are not well versed in real estate and even less with Texas real estate but, you have proven to be a person that can really shake big things up when you want to. I don't know if my situation warrants some shaking up as you have done in the past but.... My situation is bothersome and several people stand to lose if I don't do something soon.

I am pasting the attachment in this email in case you are not able to download where you are at.....

Thanks John

Jim

Included in the email was a story Jim apparently intended to publish on Bigger Pockets, where he'd written a number of articles resting upon his "expertise" with real estate. As I read the story, I thought to myself, "Why would Jim publish this? This could be quite damaging to his career as a real estate teacher. The story--

Well, hey. Judge for yourself. Here's what he wrote, word for word.

Foreclosure Can Happen to Anyone

The current real estate foreclosure market has hit close to home. In fact, it has hit… My home.

I currently have two houses posted for the March 4^th foreclosure sale. One of the houses is my current home. My real estate career has focused on foreclosures and the owners that go through it. There is an unspoken rule that people who teach about the subject, are not supposed to experience foreclosure themselves.

This is what happened and what the current status is…

I bought a house in Mesquite to rehab and sell in March, 2007.  With the rehab nearly complete, a second house was bought in Carrolltonin June, 2007. The Mesquite house was put on MLS in the end of July for $128,000. That time frame was the start of the subprime meltdown. The result was the house only had two showings during the six month listing. At the time of the listing, the sold houses in the area had an average Days On Market of 45 days. I budgeted for 90 days.

Both houses were financed by Hard Money Lender, Jack Hodge.

The holding costs for each house is roughly $1,000 a month.

Had the Mesquite house sold within the first 60 days, I would have profited up to $15,000. Because it didn’t sell, not only did I not get the profits out of it but, my holding costs doubled.

With business having been slow most of the year to begin with, keeping up with double holding costs didn’t last long.

In other words… I fell behind. To make matters worse, classes, speaking engagements, open houses, the Investors Group of Texas and other income producing events, all fell short of expectations.

Telling the lender I expected to bring the loans current or make a substantial payment several times, only to be let down by low turn-outs and canceled classes, was a very difficult thing to do. He requested that I update him by phone even if all I had to say was, “I have nothing new I can tell you.”

That sounds reasonable enough but, I found it humiliating after expecting to make a payment and then having to come up with an explanation to the lender (Jack Hodge) as to why the payment would not be made.

I teach on this subject and I can’t tell you how intimidating it is to have to face.

All the while, I was trying everything I could think of to find a buyer for the Mesquite house. I advertised constantly on local websites and tried to get a buyer by doing owner finance. Nothing.

At one point in December, I had a buyer set to buy the Carrollton house by owner finance but they backed out at the last minute.

Finally, the two houses were posted for foreclosure. Knowing the foreclosure process as well as I do, I put nearly everything aside so I could focus on getting the Mesquite house sold and reinstate the Carrollton house, where I live.

When it became apparent that I would not get a buyer in time to save the house, I contacted the second lien holder, who had financed the rehab and was now at risk of being wiped out if the house made it to the auction

He was understanding of the situation and after we discussed options, he decided that he would buy out the hard money lender and pay himself back by obtaining a new mortgage. To my surprise, he didn’t think it was right for me to not get anything from all the work I had put into the house and told me he would Quit Claim Deed ½ of the ownership back to me after he bought it. He decided he would rent the house to me for the next year and we would then try to sell the house after the market recovered. The only thing I needed to do at that point was find a buyer for the Carrollton house.

Four days before the auction (February), the second lien holder called and told me that he had thought about the situation further and decided that he was not going to buy the house after all. What stunned me even more was the fact that he understood and accepted the chances that he could lose his $20,000 + investment. He did not blame me and said he felt the market was to blame and he understood it was an investment that came with risk.

When I bought the house and we talked about him financing the rehab, I never considered his losing his investment as an option. After he told me he was not going to buy the house, seeing to it that he would not lose his investment became my driving force. He agreed to release the lien for the rehab which allowed me a lot of flexibility. I came up with the following plan where no one would lose.

• Lower the asking price from $128,000 down to $100,000.
• That would give a buyer 20% equity and it would be attractive for an investor looking for a rental property that would cash flow $200 to $300.
• It would also be ideal for someone looking for a great deal on a house for themselves to live in. 
• With a sales price of $100,000, it would allow me to clear $10,000 profit, which would be used to reinstate the loan on the Carrolltonhouse.
• Once the Carrollton house is reinstated, I would Quit Claim Deed ½ of the ownership to the 2^nd lien holder from the Mesquitehouse.
• That would allow the 2^nd lien holder to secure and recover his investment after the Carrollton house was finished and sold after the market recovers.
• The end result would be: The lender is paid off on one house and the other reinstated. The 2^nd lien holder on the Mesquite house would not lose his investment. My holding costs would be cut in half, I would pay off one of the two loans and I would sleep better knowing that no one lost their investment.

In order for that plan to work I would need… Time.

It turns out the legal description on one of the foreclosure notices was incorrect.  

I was able to get the foreclosure pushed back a month because of it. The lender agreed to postpone the foreclosure on the other house in hopes that a buyer would be found before the next foreclosure sale.

I found a buyer!

A long time mentoring student recognized it as a perfect rental property and wanted to buy it. I got them hooked up with Chuck Sykes(investment mortgage specialist) and we proceeded towards closing.

With exactly one week remaining before the foreclosure auction, the deal fell apart when the buyer was not able to secure the financing.

For the past four days, I have been doing everything I can think of to find the solution to this problem. So far, I have been able to protect my identity from the public in connection to the two foreclosure postings. I knew what kind of an impact that information could have on my career and reputation.

This morning (Saturday) I spoke with the lender, Jack Hodge and requested to meet with him in person. He declined to meet with me in person.

His attorney (and acting trustee) was required to notify me of the foreclosures by mail no later than 21 days before the next foreclosure auction. Notice for both houses was sent to the Mesquite address but the trustee sent them to the wrong address. The actual address is:1717 Golden Grove Dr. and the trustee sent them to: 1707 Golden Grove Dr.

The post office marked both envelopes and wrote the correct address on them. The postmark on both envelopes shows February the 14^th. That is 19 days before the auction and legally, both postings are not valid and need to be reposted for the following foreclosure period. I will be scanning those documents later tonight and will post them online so anyone can see them.

I have considered how I may look by contesting the validity of the foreclosure postings as I have. I can see how it might make me appear to be “reaching” or just “delaying the inevitable.” I have two responses to that.

1) I have a house that is discounted significantly and has been averaging 2 showings a day since it was re-listed on MLS two weeks ago. The proceeds would be enough to pay off the one house and reinstate the other.

2) As I would expect, I am being held accountable for the two loans that I was given to buy these two houses. I think it is fair for me to hold the lender/trustee accountable for inaccuracies and errors made concerning the foreclosure process.

I have also learned that the lender, Jack Hodge, is not licensed in the State of Texas as a Private Mortgage Lender. Any person or business that issues five or more loans per year, totaling over $1 Million dollars, is required to be licensed.

I understand that two “wrongs” do not make a “right.” In my case however, I want everyone to be aware that my intention is to make my part in this situation…Right. Getting a buyer for the Mesquite house and having it close, which in turn would reinstate the Carrollton house and allow the 2^nd lien holder to recoup his investment… Would make my part in the situation… Right.

Lastly, losing both houses would not only jeopardize my career but would also result in a very uncertain status on a personal level. Mainly, where would I live and where would I store the contents of the two houses?

If the lender forecloses, he will own one house, fully updated and rehabbed for less than $0.70 on the dollar. The other house is about halfway completed and he would own it for about $0.70 on the dollar. He is also aware that the 2^nd lien holder would be wiped out as well. All past due interest payments would be paid in addition to one of the loans being paid in full if I was allowed to continue my efforts to sell. That is in addition to the $19,000+ the lender profited from the loan I had with him in 2006 on a house I bought, rehabbed and sold. 

If I am able to avoid the foreclosures and get the buyer that I feel is close by, no one would lose. In fact, in the end everyone would win.

If I lose either or both houses, the lender wins. The same lender that always stated, “I don’t want your house.”

When I posed the question to Jack Hodge this morning of where would I live if he forecloses on both houses, he replied by saying, “Go live with your Grandmother.”

Size of the font in that last remark not in original draft by Jim Watkins.

In response to Jim's email, I talked to Jim on the phone and told him he shouldn't publish this article because it would damage his reputation as a competent teacher on the subject of real estate; a reputation he'd labored long and hard to build and, indeed, his teaching efforts were like a second career. The "Go live with your Grandmother" quote, in particular, seemed like pointless public self-injury. At the time, I was a teaching assistant in Journalism and I'd just recently watched the "ultimate movie about teachers" which is Mr. Holland's Opus. Knowing well the flaws and well-intentioned humanity of teachers, I wanted to help Jim TEACHER TO TEACHER by giving him good advice.

Don't. Publish. This. Confession.

Of course, at some level I thought maybe it would be better for Jim to just go public with the story. Better for the public, that is to say, than for Jim. But what was the point of going public with such an intimate confession of his failures after writing so many articles about his expertise? I think I even told Jim it would be better to publish such an article AFTER the real estate market turned around and he'd completely recovered. Then he could go back and tell students, "Woo hoo, let me tell you about that real estate market back in 2008 and what it did to ME."

It was well-intentioned advice. Jim didn't publish the article. And, indeed, the article was not the complete story of what ultimately happened (or is alleged to have happened) with the house. In fact, here's what Jim wrote about the situation just recently in response to this very article while it was still in the "POST IN PROGRESS" stage.

Anyway, in 2007 one of the houses I rehabbed I had to let go into foreclosure due to the market starting to crumble. I had sent him an email when I was pretty depressed about it and that is what John is intending to publish on his blog.

What John has been told is that the house was posted for foreclosure BUT, the house did not go to the courthouse sale. Meaning, I found a buyer and sold it before it was foreclosed.
Lets see what he writes about it now... Shall we?

September 29, 2012 12:21 AM

Fair enough. Jim's explanation in his own words.

Here's more of what Jim had to say recently about his real estate career.

It is no secret I am no longer active in the real estate investment world largely due to the real estate collapse.

However, after the fiasco with his house, Jim tried to pass himself off as (good lord) a "foreclosure expert."

Here's YouTube video of Jim's next incarnation after "Go live with your grandmother," proudly posted by Jim himself. It has been said of Jim that he "fakes it until he makes it." (ADDENDUM, October 2: Jim points out the story was produced in 2006. However, it was posted to YouTube May 2, 2009. Given the date it was uploaded, it appears to be part of an attempt by Jim to cast himself as a "foreclosure expert" following the meltdown of his real estate career)



And somewhere along the way, he became the "Evil Anti-Johnny" blogger, a sort of cartoon nemesis to Johnny Northside.

Obviously, a lot of hurts and personal failures had accumulated by that time. Jim's self-described "best friend" and former business associate Thomas Balko sentenced to prison; and not for a short time, either, like some of the OTHER fraudsters who had an impact on North Minneapolis. (Tynessia Snoddy and her short little sentence comes to mind) His own real estate teaching career another burst bubble. And in 2010, when I asked "Bigger Pockets" if Jim was still writing for them, here's the reply I received.

Joshua Dorkin May 29, 2010 at 5:09 pm

John – Jim stopped writing for us back in 2008. I’m not aware of what he is doing lately – it has been a long while since I heard from him. That said, you can get a list of our regular contributors by checking the right sidebar of this blog 

And apparently the "foreclosure expert" path wasn't lucrative enough to continue, perhaps because our country is saturated with such recent "experts." (By the same standard, we might all consider in what areas of life we are experts. Oh, I'm an expert on CHILD SUPPORT. I'm also an expert on buying crappy cars and keeping them running for longer than anybody predicted. Recently, I developed expertise in the buying of used tires)

So what is Jim doing NOW? Did he really go to live with his grandmother? Inquiring minds want to know in NoMi.

But there are more pressing issues in my neighborhood to write about at the moment. Yes, it's tempting to write about Jim Watkins and enjoy the delicious irony of the fact I happen to be in Dallas this very moment.  (I am an expert on Dallas/Fort Worth! Just call me your "DFW Mentor.")

But unlike Watkins, whose blogging efforts are devoted to trashing one guy trying to improve a rapidly revitalizing neighborhood, I have bigger fish to fry.