[The Following is an excerpt from John Behle's book Creative
Paper Formulas, which is part of The
Paper Game Trilogy. Though John is known primarily for
his creative formulas and over 20 years experience in the
"paper" business, he has also purchased millions of
dollars of real estate. This article details one of the
valuable tools he developed to buy over a million dollars per
month of properties.]
There was a time once when I spent hours going through the
classified ads looking for little tiny clues to lead me to
properties. I bought many good properties and thought I was
doing great. I hired people to help in the calling and in the
paperwork. Things seemed to go pretty smoothly.
Though I was a Realtor, I spent a lot of time apologizing
about it to "fizzbos" (properties being sold by the
owner). It seemed like one of the very first questions was
"are you an agent." I explained that I was, but that
I was not looking for a listing - only to buy.
Gold in the Back
In my back office was a computer that was tied in to the
Board of Realtors Multiple Listing Service (MLS). I used the
valuable information to help in appraisals, market analysis of
properties and amortization schedules. It came in handy when
one of the properties I was investigating was currently listed
or had been listed.
In using the "search" functions of the computer,
I learned something exciting. I COULD SEARCH FOR ANYTHING I
WANTED! The area I searched could include the whole city,
the price could be between one and ten million dollars and I
didn't have to narrow the size or any other qualifications of
the property down. At this point, it would print the whole
listing book, if it weren't for the fun ways that I narrowed
Almost A Hundred
The information I was most interested in was about the
seller. On most forms in most areas of the country (some small
cities are not on computer) there is a section for
"remarks". Here's some of the choice words that my
computer can search for!
My "clues" are prioritized in an order that to me
indicates the biggest "don't wanter". For example, MUST
SELL is very common and doesn't mean a whole lot unless
another clue pops up along with it, but DESPERATE or FORECLOSURE
means some real good potential to buy a property.
In the time it would take me to call one "fizzbo",
I could print hundreds of properties with better potential out
on the computer in a prioritized order. Agents were hired and
trained and offers went out so quick it was hard to keep track
In fact, once we had two agents present two different
offers on the same property, from the same buyer in the same
day. I quickly formulated a plan for that to not happen again!
Millions in properties were purchased and agents made nice
commissions. At training meetings and at other times during
the week, I gave the agents more leads than they could handle
and they reported back the next week.
Agents knew how to write, analyze and structure offers and
even had the help of a computer program I had written to
analyze properties. What they were looking for was clear and
their motivation was high.
A gold mine had been in my back room and I had finally used
this valuable resource. The computer can print out more -
already screened - properties in a few minutes than there are
"fizzbos" in my entire city. Strategy had to change
a little to provide for cash commissions for the agents (I've
never seen them work too well or too long for notes or
discounted commissions), by using bank and investor financing,
but the overall properties were better and easier to find.
If You're Not A
I know most who read this are not agents and members of
their local Board of Realtors. Don't despair, it works better
that way. Cultivate relations with agents and cooperate with
them on finding properties. You may even find a broker willing
to build a brokerage around your concept or allow you to hire
and train agents with his supervision.
Not being an agent has definite advantages in negotiations,
liability and ethics. As a broker, I have to watch and monitor
these areas. There are certain types of disclosures I have to
make as a broker, that hinders negotiations. Not that it makes
any difference as far as ethics, just potential liability. I
wouldn't cross the line or write a non win/win offer if I
weren't a broker.
As an example, if I knew something about the property that
could or would make it more valuable, I would have to disclose
that. If I had a buyer lined up and was going to re-sell the
property for a profit, I would have to tell the seller that.
To work with agents, you should maintain control and
ideally have them exclusively working for you - otherwise you
just train them to be your competition. I provided office
space, the best training they could find, leads, investors and
100% commission splits.
Yes, agents can be hard to deal with, but if they are on
your side, they are invaluable. Is it possible it might be
better to clone yourself and have 5 to 10 agents out beating
the bushes while you concentrate on the things only you can
do? I think so - and I'll bet you will if you try it.
Special Note -
Limited Search Functions
Some areas have systems that do not allow easy search
functions or even limit the criteria that can be searched for.
Don't give up in despair. It is a simple process to download
the database into your computer and search through the data
using your word processor. For example, let's say that you are
limited on your system as far as searching for remarks like
"foreclosure". You can search all listings in a
particular area or within certain parameters and store them on
your computer (hard or floppy disks). Load them into your
favorite word processor (Word Perfect for example). Most have
the ability to load in ASCII text and have search functions
that will jump through the document to the text you have
specified. I did a quick calculation and determined that the
entire database of my local board would fit on a 30 megabyte
hard drive or I can look at it piece by piece.
About the Author . . .
John D. Behle is one of the foremost educators and
practitioners in the field of discounted paper investment. His
innovative strategies and techniques have shaped the industry.
With over two decades in the industry and an extensive
background in real estate and finance, John Behle adds a
wealth of knowledge and experience to his creative
John holds an National Council of Exchangors "Gold
Card" and an EMS designation. He is also listed in Who's
Who In Creative Real Estate. John Behle is the author of
several hundred articles published in national magazines and
newsletters and of several ground-breaking real estate paper
* The Paper Game Trilogy
* The Paper Game 5-Day Video Training
* Millions Of Mortgages In Minutes
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