Power teams are composed of players that specialize in a specific area the investor does not specialize in or that the investor would prefer not to spend time doing. Since most investors invest in the same geographical areas year after year, they develop a power team in each of those counties. The investor does not need to be an expert in all investing aspects in every count. The investor needs to become comfortable with a few states or counties that work for them and surround themselves with experts.
A History of the Term Specialist
In order to give some context to the term, it’s important to define the history of how the specialist term was developed in the context of real estate.
At one time, a specialist was the term used by the New York Stock Exchange (NYSE) to refer to a member of the exchange who acted as the market maker to facilitate the trading of a given stock. The NYSE now refers to these individuals as designated market makers (DMM).
The specialist's duties in the past were very similar to the duties performed by today's designated market maker (DMM) on the New York Stock Exchange (NYSE). A specialist held an inventory of a particular stock, posted the bid and ask prices, managed limit orders, and executed trades. If there was a large shift in demand on the buy or sell side, the specialist stepped in and sold off their own inventory as a way to manage large movements and to meet the demand until the gap between supply and demand narrowed.
Most specialists traded five to 10 stocks at a time on any given trading day. There was usually one specialist per stock who stood ready to step in and buy or sell as many shares as needed to ensure a fair and orderly market in that security. Each specialist had a particular spot on the floor of the exchange, called a trading post, where the buying and selling of stock occurred. Floor traders, who acted on behalf of customers who bought and sold the stock, gathered around a specialist's trading post to learn the best bid and ask for offers for a security or a stock. Specialists executed a trade when bids and ask orders matched.
Specialist Roles
Specialists also bought or sold the stock when it reached a certain price. If a floor trader's bid was above the ask price, but then the ask price rose to match the bid price later, the specialist would then fill the order. Before the stock market opened for the trading day, specialists attempted to find a fair opening price for a stock. If a specialist couldn't find a fair opening price, they might delay trading on a particular stock as part of their overall role.
Specialists had four major roles to fill. Specialists acted as auctioneers to show brokers the best bids and offers. Specialists also continually updated floor brokers to act as a catalyst for buying and selling. They placed orders on behalf of brokers and placed orders for customers ahead of their own. Despite all of these duties, the number of specialists declined over time, thanks to electronic trading.
Power Team Players
Here are potential power team players we will go through:
- Support Team
- County Officials
- Real Estate Agents
- Real Estate Attorney
- Real Estate Investors
- Property Appraisers
- Contractors
SUPPORT TEAM
You will have questions along the way, which is why we are here. Although we cannot give you legal advice, or tell you exactly what to do, we can provide a guideline to help you make a wise decision.
COUNTY OFFICIALS
The county official knows the county processes better than anyone. If the investor can develop an amicable relationship with county officials, all the better. Our students have created these relationships that the county officials call them to give our students a shot at potential investments before the county releases the list publicly.
County officials can provide insight into their systems and sales procedures. County officials and workers are not allowed to invest in their county since it would be considered an unfair advantage. They know a lot and learn the best ways to make investments in their county.
Create relationships with county workers and county officials in counties where you would like to invest and profit from those relationships.
REAL ESTATE AGENTS
Having quality real estate agents on your power team serves a couple of purposes. The first help with evaluations. What would it be like buying a tax deed across the country without a way to evaluate the property personally. A way to get an educated guess is getting one from a real estate agent in the property area. This can be done by going to Zillow.com and viewing properties being sold near the one you are interested in.
Along with a description of the properties, Zillow will show you the agent for those properties. You can call the agent and make a simple request. Tell them you are buying property nearby that you would like to sell quickly, and you might like them to sell it for you. Ask them to look at the property, see how it compares to others in the area, and what it may need to sell at retail price.
You may want to get a couple of agents to quote it for you. Once you invest in the area a few times and call back the agents that did a good job for you, you suddenly have a real estate agent or agents on your power team.
REAL ESTATE ATTORNEYS
When it is time to foreclose on a property or to clear a title, you may want assistance from a real estate attorney in the property area. They can help with foreclosure notices for financially interested parties. The attorney will represent you to those parties and in the court system to clear the title. Your attorney will appear before the judge to clear the title to have a warranty deed issued on the property. Once you use a real estate attorney you like and trust, you can stick with them whenever you invest in the area. That real estate attorney becomes a player on your power team and someone you can call on for help.
REAL ESTATE INVESTORS
A significant group for your power team is other real estate investors. You can find these investors through our Investor Forum, local real estate clubs, or web-based real estate clubs.
We may use these investors as mentors, but it is more critical to aid you in your exits. When attending real estate clubs or chatting with other students, you may find out that one investor is interested in buying beat-up homes to rehab and sell, and another investor likes to purchase raw land and develop it.
Knowing investors in the area can be powerful since you can invest with those investors in mind. You could speak to the one interested in land and find out where they like buying land and what they avoid. Then you can find property specifically for that person. Call the investor and share images of the property and information, including historic values and the neighborhood, then work the deal before making your investment.
Having other real estate investors can provide the investor with a constant buyer for investments. The investor can reach out to people and invest with the end in mind much easier, knowing that other investors are anxious for the investor's deals.
PROPERTY APPRAISERS
Property appraisers determine the property value. Sometimes these values are higher and sometimes lower than anticipated. Having the right appraiser on your power team is crucial to evaluate your investment properties properly. It is vital to have accurate values if the investor wants to take money against the property or when the investor wants to sell the property.
This is especially important for investors that have spent time and money to rehab the property. The investor needs to get a new appraisal after work is done. Otherwise, the investor hardly has grounds to argue a higher price than the previous appraisal. Once you find an appraiser that provides excellent and accurate results, hold onto them, and call on them in the future as a new team member.
CONTRACTORS
When an investor wants to perform extensive rehab on property, the investor will need assistance from a contractor in the area. A contractor will complete work and source professionals to get your rehab done well and on time. Having an honest contractor that can stay under budget and get the job done within the deadline is a great asset. Once you find one in the area, keep that contractor, and go back to them every time.
Finding these team players can be quite straightforward. It can be done by searching the Internet for that particular skill set. Go to Google.com and search “real estate attorney Pima county, AZ” or “property appraiser Hernando County, FL.” You can find players through other tax lien and deed investors that have invested in that area.
Do not worry about finding all the people before you need them. When you get to the point where you need a new appraisal, then find an appraiser. Please let us know if you have any questions.
