Notorious slumlord Mahmood Khan has posted a Craigslist ad selling what is believed to be many, if not all, of his north Minneapolis properties for one lump sum...of $4.5 million.
The biggest worry that such a move causes is that at a price that seems drastically over-inflated, the next buyer will be another slumlord who is as bad or worse than Khan - assuming of course that the offer to sell is even remotely genuine. But if there is a chance to either chip away at his inventory or arrange a buyout in the same manner as the Spiros Zorbalas sale, it would seem that now is the time.
Still, who seriously expects to make $4.5 million off of a Craigslist ad? Furthermore, the sale becomes difficult to finance even for bona fide buyers on the up-and-up, since the individual market value of these structures is almost certainly nowhere near a cumulative four and a half million. The only way that amount is remotely feasible is if one goes off of an income-based approach and puts very little into upgrading the existing structures. Khan would need to be talked down significantly from this price point, if for no other reason than the end use of many of these houses should be conversion back to owner-occupancy. The new owner(s), if they are good ones instead of the next round of slumlords, would have to put serious money towards repairs, and the proceeds to make the purchases viable would have to come from resale and not continued rental use.
Rally the troops! Public, private, and non-profit! This may be a tremendous opportunity to turn around the neighborhood in one swoop.
Serious Buyer?...
ReplyDeleteThe banks (Franklin and Northstar) are closing him down. It is better to wait and then buy from them directly at 1/2 that price!
ReplyDeleteFirst...
ReplyDeleteThe photo of Mahmoud Khan was contributed to my blog. I didn't take that photo and would like to thank the person who did and who allowed my blog to use it. I'm sure the contributor would be happy to see its wider use here on North By Northside.
Second...
Mahmoud Khan, don't let the swinging door hit you where the Good Lord split you. This is what happens to slumlords in North Minneapolis and if some other wannabe up-and-coming slumlord steps into Mahmoud's shoes, we'll be happy to take that SOB down as well. Irresponsible owners and investors need not apply.
I'd love to get a chance to check out Khan's homes. We service a lot of foreclosures in North Minneapolis (check out some pics here http://www.duallservices.com/foreclosures/minneapolis-garbage-house-part-i-first-entry), and I strongly feel that, if many of these rental properties were properly managed and maintained, we wouldn't have nearly as many issues in these neighborhoods. Oftentimes, the homes could be great, the tenants are decent people, and the city offers a lot of services. It's just that unscrupulous landlords allow their properties to fall into disrepair. It's a sad way to maximize profit, at the expense of the rest of us.
ReplyDeleteI almost deleted this because it seemed at first like spam. But there's a difference between spam and substantive commentary that also offers a service or attempts to promote a company/product. This is clearly the latter, and if Khan is getting out then we'll need all the help we can get to manage his future former properties well.
Deletecan we start listing his properties here?
ReplyDeleteYes please post a complete list of the properties. We could then begin pooling funds to make the purchase.
ReplyDeleteSo he was raking in 50K a MONTH and yet whined and whined publicly about not being able to keep up with the expense of maintenance and building codes. What a POS.
ReplyDeleteYea, at 100% occupancy. The reality is that only 75% of tenants pay their rent and the rest are evicted each month. It is a revolving door up in North Mpls! Kahn is lucky to collect 35K a month, so now readjust your thinking!
ReplyDelete$35K a month? Awww...poor guy!
DeleteIt's a shame all his neighbors who have to deal with the riff-raff and problem properties don't have more empathy for him.
I wonder at what point he realized the slumlord business model wasn't working out for him?
Readjustment not necessary. That is the amount(50K) he posted on the Craigslist ad as expected monthly income. This guy makes more in a month than I do in a friggin' year yet I manage to not only keep up the property I own and live in but make improvements as well. This guy is a lazy, greedy, selfish POS.
DeleteIf you can't get more than 75% of the tenants to pay their rent your in the wrong business. Pick better tenants, fix your property, or try something else!
DeleteClearly you have never owned a business. I will bet his mortgage payments run $20,000 a month, taxes and insurance another $8,000 to $10,000 a month, utilities another $4,000 to $5,000 a month. I would bet anyone that in today's terrible rental market, he is not making a penny - it is all a big writeoff and he does not need writeoffs anymore!
ReplyDeleteTerrible rental market?
DeleteDo the math-
There were 17,895 foreclosures in Minnesota in 2012. This number is down 16 percent down from 2011, and the lowest statewide total since 2006. However, the total number of foreclosures remains elevated, still nearly three times the number of annual foreclosures in 2005, the first year these numbers were compiled.
He is just a terrible businessman and a lousy human being!
Oh, you think he pays the utilities and has all these rentals insured?
DeleteAnon 10:40, clearly you've never run a slumlording business. I get my info from the horse's mouth: Mortgages? There are none, these properties are often bought in cash or at such a devalued rate any mortgage payment is a pittance in relationship to monthly rental revenue. Fire insurance? None--not required as no bank lien exists on the property. The MSP rental market is operating currently with little to no vacancy rate, and the money fueling much of the North's share comes from the inflated Section 8 gravy train, an amount that can easily be manipulated by converting dining areas and porches into makeshift bedrooms. Utilities? The responsibility of the renter. So either you honestly don't know what you're talking about, or you are attempting to use smoke and mirrors and have failed.
DeleteWhile there may have been no initial mortgage, he clearly took a line of credit out on the titles.(Most likely for the purpose of enlarging his empire.)
DeleteProblem is, there were conditions in place that required him to improve and maintain this collateral. The $150K of assessments and loss by demo of several properties clearly compromises his end of the deal and he is scrambling to get some fool to bail him out!
Well guess what moron, I happen to be Kahn's new property manager and I by agreement with his 2 banks, am now taking over his crumbling business, so the figures above are totally correct. We do not take Section 8 either. It amazes me how people who have no clue of how businesses are run come up with such ridiculous assumptions. The rental market in North Mpls is the worst since WWII! My grandpa has managed properties since 1947 and my dad since 1972, me since 1998, so we all have decades of experience.
ReplyDeleteWhat a crock. Can't even spell the guy's name right. Why would KHAN post an ad if he was transferring his shite show to a new property manager? And why would you take over a 'crumbling business' if the market is so bad and you are supposedly such a business guru? I stated basic facts regarding fire insurance, regarding the rental market--all accessible information (and recently reported on WCCO)--of which you have no knowledge. If anything you submitted is even remotely factual, then I guess we also have YOU to thank for the decimation of the neighborhood housing stock.
DeleteSo...A 3rd generation Slumlord minion can't understand why (despite record numbers of people going homeless) nobody wants to rent the properties under his care?
DeleteI guess even the desperate can only stoop so low!
Maybe Ross Lumley will buy them. He is a slumlord who works the Harrison neighborhood and does what Khan(CON?) does.Maybe the Harrison neighborhodd council can look into this guy because i already know the game that he is running and he should be invetigated.
ReplyDeleteMaybe we all need to grab our torches and storm City Hall to find out why our government allows us to be victimized by these monsters!
Deleteshould be investigated for what?
Deletei have rented from mahmood for 15 yrs and have had minor problems,n know for a fact 5 out of 10 tenants pay thier rent.i agree find better tenants,however i applaud him in trying to help those who are down on their luck.but if u dont know whats going on stop commenting n downgrading this man.he still owns his properties for a reason there passing inspections!now johnny n side n anybody else get a life and find a way to "help" him find a way for his big trusting heart in blieving tenants will pay so he can ivest more in the properties or wait to see if he loses them than bash him!!!
ReplyDeleteI SEE THAT THIS IS A NON-STOP ISSUE WITH MAHMOOD AND I HAVE SEEN SOME OF THE RENTAL PROPERTY HE HAS AND FROM WHAT I SAW THEY WERE NOT BAD THIS WAS ABOUT 3 YEARS AGO ONE WAS 21ST AN 3RD AND THE OTHER WAS OVER BY OAK PARK ANOTHER ON LOGAN AND THE LAST ONE ON EMERSON AND THAT ONE WAS A NICE WELL KEPT DUPLEX FENCED AND TENNANTS WERE CLEAN AND YOU COULD TELL I DON'T LIKE A NASTY YARD CAUSE IF YOU CANT KEEP THE OUTSIDE WELLKEPT THEN I DON'T WANT TO IMAGINE WHAT THE INSIDE IS LIKE .THE OTHER PROPERTY THAT MY SON AND I LOOKED AT WEREN'T AS BAD AS EVERYONE IS TALKING. UNTIL I NEEDED TO FIND HOUSING FOR MY GROWN DAUGHTER AND MYSELF ALONG WITH 3 GRANDCHILDREN I DO WANT TO SAY I DID OFFER TO HELP HIM OUT WITH SOME OF HIS PROPERTIES BUT I THINK HE HAS A TRUST ISSUE I JUST THOUGHT HE'S OVERWHELMED WITH ALL HE HAS DO DO AND IT'S WEARING ON HIM .WELL I CALLED HIM SEEKING HOUSTNG AND HE KNOWS THAT I'M PICKEY AS TO WHAT I DO AND DONT LIKE AND WITH ME AND MY DAUGHTER WHO WERE STABLE AT A NORTHSIDE PROPERTY LIVING THERE FOR 4 YEARS I FIGURED I CALL MAHMOOD CAUSE OUR LAND LORDS WERE GETTING SNAKEY. MY DAUGHTER HAD FIRST SPOKE WITH MAHMOOD KAHN THE FIRST PART OF JUNE 2013 AND LETTING HIM KNOW WHAT WE NEEDED WELL HERE WE GO MAHMOOD LIKES TO SEND YOU ON A HOUSE HUNT AND ANDF WHEN YOU WANT TO SPEAK TO HIM HE'S BUSY OR WILL SEND YOU ON ANOTHER MISSION TO LOOK AT ANOTHER HOUSE. WELL MY DAUGHTER APPLIED FOR EMERGENCY ASSISTANCE AND ONE OF THE PROPERTIES WE WANTED THIS IS WHERE MAHMOODS BULL-SHIT BEGINS ITS NOW NOVEMBER AND WE SINCE BEEN TOLD THAT HE NEED A DEPOSIT ON THE PLACE IN QUESTION NOW KEEP IN MIND THE CATCH ME IF YOU CAN WITH THE COUNTY AND MAHMOOD WAS GETTING TO BE A BIT MUCH KNOWING I NEEDED TO BE IN THE PRESENCE OF WORKER SPEAKING TO MAHMOOD ON THE PHONE IN HER OFFICE STATING HE WAS GETTING A GUARRENTEE ON THE DEPOSIT AND SAID ADDRESS IN NORTH MPLS OK DONE....WELL WHAT THE HELL NOW SINCE WE MOVED AND THE HOME WE WERE SUPPOSE TO MOVE HAS SINCE BEEN SO HES SAYS RENTED? WE WENT BY THERE NOBODY LIVES THERE AND HE STATES HE WILL LET US STAY AT ONE OF HIS OTHER PROPERTIES TILL HE HAS SOMETHING FOR US WELL WE GO LOOK AT IT AND YUC THE RENTERS HAD PILLED UP CLOTHES UP TO MY CALFS AND BELEIVE ME I SHOULD HAVE HAD AN INSPECTOR WITH ME THIS PLACE WE WOULD NEVER MOVE IN TO WE HAVE BEEN STAYING AND PAYING FOR HOTELS ,FOOD, U-HAUL TRUCK AMOUNTING TO OVER $ 4,000 AND MAHMOOD KNOWS THIS WE WANT THE PROPERTY THAT WE KNOW IS NEEDING WORK BUT WERE WILLINT TO DO JUST THAT NOT ALL HIS TENNENTS ARE TRASH AND I FEEL HE'S TAKING ADVANTAGE OF SITUATIONS AND WERE GETTING THE BRUNT OF THIS I'M ANGRY WHEN I SPEND SO MUCH MONEY ON LIVING OUT OF A BOX AND NOT AT THE ADDRESS WE ARE SUPPOSE TO BE AT RIGHT NOW.
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