Stone Soup

Now that a year has passed since brokers realized the 12 years of free-flowing cash and lenders has disappeared from the R.E. market, some have learned to be good client counselors in order to be able to put closed transactions on the table. The first multi-leg transaction I ever put together (right after taking weeklong “The Reno Class” = Modern Real Estate Exchanging, which was a requirement in those days for an invite to S.E.C.), caused me to name the technique “STONE SOUP”*. This guaranteed closed-transaction process works only with multiple brokers who have WELL COUNSELED CLIENTS.

Using a chalk, whiteboard or spreadsheet in computer, make two columns: One with a column of clients (deed signors) with a memo of their circumstances and objectives, and one with a list of the properties (vehicles) and other benefits that the clients have to use toward the desired transaction.


John Doe – settle divorce, get housing, hide income

Jane Doe – get cash flow from divorce settlement

Paul Pyramider – move up to more debt, more tax shelter, validate profit from prior investment

Bill Builder – validate profit in last spec building, get off construction loan. Get opportunity for next const loan

Wynonna Widow – get out of old family house, get small residence near kids, get safe, non-management retirement income.

Deal Junkie – will take any type property if it validates his profit in the prior deal

Geographic Changer – get rid of assets in old town and move them to new town

Life Changer – get off of high management demand real estate and “head for the barn”

Delinquent Talent – spend time and construction, redux, or management skills to acquire equity in R.E. and renew credit
Heavy Mogul – use financial strength to mow down obscene profits

Tired Hoper – start seeing benefits from holding on all those years

Toy Boy – time to convert boat, recreational house, RV, Jag, and fast lady into something that can get him a job

Franco Financier – wants to loan $ for illegal yield, especially if it hurts on the other end

Theo Thief – will only deal if he gets the better of it

Kris Krisis – will eat the north end of a southbound skunk at high noon on the courthouse steps to get the $ needed to $%^&*()

Reward Seeker – wants to source the most exotic and complicated transaction to get the National creative deal trophy

Exchange Professor – to pontificate the transaction solutions for no-risk, no-investment, big equity gain (known as Investment Bankers on Wall Street)

Grandpa Frickit – get assets into retirement income, college for grandkids, and inheritance for progeny

Ernie Entrepreneur – leaping into giant concepts with other people’s money

Joe College – will manage R.E. in his college town for free rent

Unn Employable – needs someone to set him up in a business to keep him away from the rest of the family

Stream bum/airport bum/gym bum/golf bum – passion and talent but needs housemother/ bookkeeper/mentor/controller

Risc Noe – engineer, teacher, CCIM, preacher, type who is afraid to make a bad deal

Junior Exec – just needs to get away from the accelerating mortgage payments on giant house loan

Todd Tradesman – wants to spend his trade skills and his construction contacts to go up

Senior Exec – wants to convert securities into R.E. that will eventually set up his retirement

Larry Legacy – taking over grandpa’s R.E. to make modern adjustment (the GenX approach) in objectives

Peter Partner – repping five who want to move profits up to another similar turnaround project

Sin Dicaetir – can bring big bucks to big transaction if the real numbers can work for Wall Street

Markup Carry – buys big land and re-sells small parts on terms

Naive Nuesome – out of payments on land, at least into improved prop. Can manage, move in

Nieds Bidness – wants business opp that will pay him $100K + return on his capital

Fed Regulated – bank wants to trade REO for saleable paper

Cite Findir – has national tenant in hand

Manwell Manumit – likes “Nickerson” opportunities


  • Freeway interchange development site
  • Free and Clear House
  • vacant single family residences (foreclosure residue)
  • Sleeping R-1 development land
  • Recreational lot (loan in excess of value)
  • unit apartment (could use retro, but not required)
  • Hot commercial corner with no takers so far
  • Large vacant industrial manufacturing plant
  • 10 tenant commercial strip with 6 tenants
  • Cattle brooding operation on 1600 acres
  • Neglected cherry orchard
  • 40K sq ft office bldg soon to be 1/2 vacant
  • Up to $500K soft pay paper against remote acreage
  • 10 old rental houses
  • Big statement
  • Big ego
  • Big energy
  • Big friends and relatives
  • 4 in-fill R-1 lots
  • Timeshare(s)
  • Second home/condo
  • Cruising sail boat
  • Humvee
  • Jaguar
  • Mooney 21 airplane
  • 3 slum rental houses
  • Un-planted vineyard land
  • Feed store/country convenience
  • Boat shop, boat rental and marina management
  • Consignment antique mall
  • “Bed shaker” route (“Magic Fingers” mattress massage machine in motels)
  • Partially approved community size development parcel
  • Long leased NNN national tenant w/small cash flow over loan
  • house with $750K loan
  • Vacant big box retail
  • Etc.


The transaction mechanics (Exchange counselors) take MENTAL OWNERSHIP of all the vehicles and the additional ingredients that clients could add (partners, cash, other properties, borrowing power, personal property, friends and relatives, talent, etc.) shown in the second column.

Begin carefully (being spendthrifty) carving out portions of the newly assumed giant portfolio to
construct sets of circumstances to satisfy each of those in the client list.


Give each an 80% happiness and 20 percent% “must take.”

Use all the Zeckendorfing (separating out parts of the bundle of rights in each property) required to use the smallest amount of value to give each a perfect set of benefits for client’s objectives/needs.

Keep “RubixCubeing” the puzzle until all clients have the perfect set of benefits for their objectives, leaving the remaining residue of the portfolio, and the obligations to have it perform the benefits, to the greedy transaction mechanics to share.

Sometimes you have to add some more clients and vehicles to complete. Sometimes you have to drop one or two out because what they have won’t make desired solutions. Lots has to do with what additional product, talent and power the brokers can bring too.

If the criteria to enter the game is maintained fastidiously, the process NEVER FAILS. One of the requirements is that at least one knows the economics of each type of property used in making SOUP. “If you don’t know the carcass, you can’t find the chuck roast and if you are wasteful, there is nothing left for the hungry dogs.”

If there is one un-counseled client (broker doesn’t know what it takes to get him in escrow), you have to jettison that one from the game. (It would be like building a car with tank parts.)

My virgin experience was with one other broker, 5 clients between us, 9 properties, state simultaneous closing (pot deeding, unilateral escrow instructions). The above-mentioned neglected cherry orchard was our fee.

I have done this process by myself and with several other brokers. It is really fun to make art from your combined superior capabilities, like Colby Bryant, Lorena Ochoa, Ansel Adams, Chopin or Dolly Parton.

*”Stone Soup” is a child’s fable someone may have read to you when you were five years old, where a vagrant would come to the village square, build a fire under a giant pot in which could be seen an interesting stone. When asked he would say he was making “Stone Soup” and the stone in there “makes the best soup you ever tasted. If you want to share some, you will have to bring a vegetable, ham hock or some other contribution to the soup.” After all of the un-counseled gullible S.E.C. villagers brought ingredients for the soup, each and all had their fill and the vagrant took his pot and stone to the next village.

It’s a little more complicated now, as the escrow closers don’t like “pot deeding” and unilateral escrow instructions. Grist for another article (instead of doing the hard part = client counseling).

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