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| 3127 Morgan Ave N |
As a Jordan neighborhood homeowner and avowed mortgage geek, I take it upon myself to know as much as I can about the local housing market, and I frequently scan the MLS for interesting tidbits. One such listing popped up a while back. A house at 3127 Morgan Ave N has been listed for sale with a purchase price of (drum roll, please) $1.45 million.
I briefly wondered if this was something similar to the $2.5 million house that signaled the downfall of the Paul Koenig/Pamiko empire. But the listing itself states that the seller is looking to unload a total of sixteen properties, is willing to barter each on an individual basis, and will give a steep discount to someone who is buying all of them at the same time.
The owner of record, according to the city's website, the owner of record is an obscure entity called Entrust Midwest LLC. Right away, I recognized this as being owned by the notorious BMG, none other than...
...Bashir Moghul. (author's note: the hyperlink goes to the city of Minneapolis website for rental licensing at this property. At the time of publication, the rental licensee is Mr. Moghul, but that may change in the future, and so could information after the jump.)
Entrust Midwest was caught up in the Trevor Cook ponzi scheme, and has been the vehicle Moghul has used when buying and selling property on a 1031 exchange. In plain English, here's what a real estate transaction means under this scenario:
In a typical commercial real estate transaction, the seller is taxed on his or her gains. Those taxes can be deferred by reinvesting the proceeds through such a mechanism. If one reinvests into something that is of more value, more diverse, or similarly aligned with a business purpose, the exchange can be used to defer or limit tax liability.
So Bashir Moghul is looking to sell sixteen such properties, and at least some, perhaps all, would be transacted through the exchange. The question is, why? What is he seeking to accomplish?
Hopefully he sees the writing on the wall and knows that once the Mahmoud Khan saga nears an end he is probably next on the city's radar. But under the rules of the 1031 exchange, he could be gearing up to buy more properties, to buy more expensive properties, or to shift his business strategy somewhat.
It's worth mentioning that Khan also tried an unconventional sale of his real estate portfolio, putting it up for sale on Craigslist of all places. Surprisingly, no one wanted to throw a few million at Khan's collective dilapidation.
There is one more disconcerting element to the story. If there is any single person or entity on the northside that has a million and a half to sink into sixteen properties at once, that would likely be Havenbrook. I have to admit, as much as I want to keep an outside corporation from buying up large swaths of north Minneapolis real estate, Havenbrook has done a decent job of maintaining their homes and managing their tenants. Even so, I do not see them as better than eventually (or immediately) getting these homes into owner-occupied status.
So Bashir wants to sell, and wants to sell quite a large portion of his real estate portfolio here. The question is, why?
As a footnote, thirteen of the sixteen properties are in north Minneapolis. They are pictured below, and as expected, they do not impress.
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| 2030 Willow Ave. |
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| 2918 Penn Ave N |
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| 3346 6th St N |
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| 3318 6th St N |
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| 3407 Fremont Ave N |
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| 2131 Lyndale Ave N |
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| 2110 Lyndale Ave N |
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| 2422 Aldrich Ave N |
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| 2617 Dupont Ave N |
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| 1500 Irving Ave N. Note the broken window upstairs. |
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| 1547 22nd Ave N, a property once owned by Stephen Meldahl. |
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| 1934 Oliver Ave N |
No truth in Housing report listed for this property. Let's check the others and report via 311. If one offers a property for sale in the city of Minneapolis, one must have a current TISH.
ReplyDeleteHavenbrook has already lost 1 license, so their management is not very good so far!
ReplyDeleteI had the experience of living beside a NRRC home while the infamous Israel Ishmael was there. Nothing got done, calls to them got unanswered and ignored, profane calls to them were ignored, and he didn’t lift one finger at all to take care of the property. I guess, what was going on was that his company stopped getting paid for work, so they stopped doing work. I would love a job where I say I work for the community but am only in the position to funnel money to my own companies, he had it made! Anyway, it was a nightmare and I feel bad for what that house went though. Hopefully it isn’t damaged too much and can be saved by the next owner. Funny though, after Israel left they have had no issues at all mowing the lawn and keeping the exterior up, it would be fun to see what he did with that money and/or how they are funding it now…
ReplyDeleteAnyway, that was a group who’s goal is to help the northside, and they failed.
On our same block there is a Havenbrook house. To contrast with the above they came in and took care of the landscaping, remodeled it, put a new roof on, and as far as I can tell are keeping it up. This makes sense because rather than “helping” anyone or “low income” they are trying to make money in both by renting as well as by selling when prices are higher. They have an interest in keeping their properties up (unlike NRRC who with Israel only had an interest in lining his pockets) and they have an interest in having tenants who also respect the property.
Time will tell what happens, the biggest unknown is when they sell these properties who will end up buying them. Hopefully at that time prices will be up enough where regular middle class young families can move in, or at least higher prices than slumlords can afford.
In the headline you mean "infamous" not "infamos," right?
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