I am a member (read that STUDENT) of the Mike Watson Institute of Real Estate Investing (MWI). Within MWI we have Broker Roundtables where we get together to discuss what we have learned and to help each other, I report notes on these Roundtable meetings here on AR.

Many of the members of the Broker Roundtable have their own PowerTeams.

A PowerTeam is a group of real estate professionals and investors who band together to do real estate transactions (deals) that probably could not be accomplished by any of the members individually. It is similar to an investment "club" but with significant differences. It is lead by a real estate broker. It may have additional real estate agents in the group. Each transaction that the PowerTeam does stands alone. Some or all of the members may participate. Not all contribute money. Some contribute their skills and efforts.

Some of the real estate professionals invited to participate are of course real estate licensees. But we also invite contractors (general plus specific trades), lenders, architects, title professionals, engineers, landscape designers, transaction coordinators, and just about anyone else who can contribute something useful to the process.

We also invite private investors.

What is the process, you ask? Well it is everything from locating a property, to "deal evaluation", to drawing plans, doing entitlement work, getting permits, doing the construction, to the final disposition of the property.

Profits are shared between the participants according to a formula which allows a certain percentage for each function including raising capital and funding the project.

Everybody takes a small bite. No hogs allowed.

Our philosophy is "if you want to make more money, do more deals." We don't need to hit a home run

everytime we come up to the plate. If we can just get on base, we will eventually score.

With this attitude we are able to find many opportunities to invest.

Our primary focus is on creating equity by use change.

Use change is everything from enlarging a single family residence to building a shopping mall in a former corn field.

Ultimately, the highest and best use for any given parcel of real estate will return the most income for that parcel. Investment real estate is valued based on its Net operating Income (NOI). When we change the use we try to maximize our NOI.

Vacant lots in an otherwise developed area (infill) are prime candidates for our PowerTeam. We can purchase the lot, draw the plans, do the entitlements, and sell the project to a builder OR we can build it out ourselves. Each deal is evaluated for short-term profits like this and long-term profits where we might re-fi and keep the property for income and appreciation.

When we do our "deal evaluation" we look at the ROI if we just do "paper" changes and then sell to somebody who does the actual physical work (short term) and the ROI if we do the entire project (long term). We like a 20% ROI per year (on a whole year basis) no matter which way we opt to go.

Because we are a group, we can accomplish much more than an individual could. We don't get all our money tied up in one or two deals. We are essentially open to do unlimited transactions.

Read about my PowerTeam here.