Gail Villanueva With Noteworthy Investments

Intro: Broadcasting live from the Business RadioX Studios in Atlanta, Georgia, it’s time for Coach the Coach Radio, brought to you by the Business RadioX Ambassador Program: the no-cost business development strategy for coaches who want to spend more time serving local business clients and less time selling them. Go to BRXAmbassador.com to learn more. Now, here’s your host.

Lee Kantor: Lee Kantor here. Another episode of Coach the Coach Radio. And this is going to be a fun one. Today, we have with us Gail Villanueva with Noteworthy Investments. Welcome, Gail.

Gail Villanueva: Thank you. I’m glad to be here today, Mr. Kantor?

Lee Kantor: Well, I’m excited to learn what you’re up to. Tell us a little bit about Noteworthy Investments. How are you serving folks?

Gail Villanueva: Well, we’re doing pretty good. Noteworthy Investments is a company that I started a few years back. I retired from NASA, and I wanted to go ahead and do something different, rockets to real estate, if you will. So, I started Noteworthy Investments. I trademarked my name, Gail, The Note Gal, because as you can see, rolling away, that just rolls off your tongue. So, I wanted something that was catchy to explain the majority of my business because I’m a note investor, but I’m also a note coach and a real estate coach.

Lee Kantor: Well, before we get too far into things, tell us what a note is, so we understand,

Gail Villanueva: Okay. Notes are instruments that secure against a property, a car. If you have a car note, a mortgage, a note is attached to that. And they are bought and sold every day. For example, if you’ve ever bought a house, and then you get a letter a few days later or a couple of weeks later that say, “Hey, send the payments now to this company,” that’s because they sold the mortgage note. So, some folks don’t want to deal with the brick and mortar aspect of real estate because of worrying about tenants or anything like this. So, this gives them another opportunity to invest in real estate, become the bank of, say, Bank of Gail, and not have to worry about those tenants, or maintenance or anything like that.

Lee Kantor: So, now, what is your back story? How did you kind of discover the opportunity within the note game?

Gail Villanueva: That’s an excellent question because a lot of folks that deal in real estate – and I’ve been doing it for decades – don’t realize there’s another aspect to the industry as far as note investing. So, I had done rehabs, I’ve done buying, I bought and sold property, bought and hold properties for rentals. And what I was discovering, it was very difficult to compete against my colleagues who are doing rehabs because rehabs were my favorite thing to do. Take an ugly house, we’ll make it beautiful. Then, those TV shows came on, it made it sound so glamorous and easy, everybody became a rehabber, so I needed to find something else. And what I discovered was a — she’s now friend, she’s also lives in Central Florida, and was teaching folks the note investing business. So, I gave her a call and realized, “Oh my gosh, with my analytical brain,” because you take the emotions out of it, “I should be able to do okay in this.” So, I jumped into it, and the rest is history.

Lee Kantor: So, now, walk me through what it was like that first note that you – I guess, do you purchase the note or how do you kind of get involved with the actual activities of the business?

Gail Villanueva: I was involved with a network of folks. I still am. We’re national and international. So, when I went to go buy that first note, oh my gosh, of course, it’s scary. So, I partnered with somebody and we did okay. So, me, being an overachiever, decided, “Well, one, why can’t I go by five?” So, I bought my first pool of notes. So, it’s all [crosstalk].

Lee Kantor: Like, where do you go to buy a note? How do you even know where they are?

Gail Villanueva: That’s a mystery. You can’t go into the bank. I had a friend of mine say, “Well, I’ll just go in the bank and ask if they’re selling any notes.” And I just smiled because you can’t go in because a lot of folks inside the banking industry don’t even know this is happening. So, oftentimes, when you call a bank and say, “Hey, I’d like to buy a note,” they’re like, “I don’t know what you’re talking about,” and they’ll send you over to their REO department, real estate-owned department or something along those lines, and it doesn’t make any sense.

Gail Villanueva: So, the way you find the notes – and that’s part of my coaching – is you look for hedge funds, you look for other investors, you make them. That’s my favorite is if you go and you create a note on a house, like you buy a free and clear property, you create a note, and you’re selling a property with owner financing. That’s one way to find them.

Gail Villanueva: Another way is you get involved with other investors that may want to sell all or part of their mortgage notes. And then, because you can sell like just a stream of payments because you don’t want to sell your home mortgage note, get 360 payments, but say you want to go on a vacation, finally after COVID, you sell $10,000 or $12,000 with the payments, and then the note comes back to you.

Gail Villanueva: It’s so cool because you can be creative, and you don’t have any banking or industry requirements for underwriting or any of those other things. Now, I do have someone I work with that creates all the paper that you have to do a title closing. He does all these wonderful things. Qualify as a person as an underwriter, and then you make the decision whether or not you want to go ahead and approve the loan because it’s your loan.

Lee Kantor: So, now, an underwriter sounds scary. Like it sounds like I better have a lot of money or I better have a lot of credentials to be an underwriter. Can anybody be an underwriter?

Gail Villanueva: Yeah, you can. You can go to that training. And thank goodness, I never really got into that aspect of it. But yes, you can become and learn how to become an underwriter. And then, you have to be licensed in the state that you’re doing the loans. And I know somebody that works in all 50 states, so rather than me personally being concerned with that. But yes, you can become an underwriter. And an underwriter can be like an undertaker. Any time you go to anything, you go and they look at all your collateral, your history, your payment histories of everything, you feel like you’re being raked over the coals and, usually, you are. And it depends on how strict the underwriting requirement would become.

Gail Villanueva: Now, after COVID, everybody got paranoid about loaning money. So, the different things that people do when they look at whether a borrower is worthy as a person that I’m in this business, I look at more than their paper. Every note has a story. And sometimes, you have someone — like I told you, I retired from NASA, right? I was a post-challenger hire. So, I’ve been up there for a few minutes. And we started bringing in these new folks for the new programs. They’re just out of college. They made a hundred grand a year, and they could not qualify for a loan because they didn’t look right on paper to the bank and their underwriting department. So, rather than deal with that, we deal with private mortgages and private lenders.

Gail Villanueva: And that’s what my team – not my team, my colleagues, everybody out there in the industry, we all work together as far as collaboration on notes. And a lot of the notes that come out of hedge funds, you release a $2 million or $3 million dollar pool into a hedge fund of all these mortgages, that’s where we generally get a lot of our inventory, from hedge funds managers, because they are very easy to work with. Unless you have like $50 million or $60 million sitting around, you’re not going to be able to deal with the big banks.

Lee Kantor: So, now-

Gail Villanueva: So, we get a little — we can — go ahead.

Lee Kantor: So, in your business today, though, you’re doing that kind of work, but you’re also coaching people on how to get into this industry?

Gail Villanueva: Well, yes. What happened was – and I’ll step back a few years – when I first started doing coaching, I was coaching primarily real estate agents. And what I discovered was in one person in particular, I have a heck of a time with this guy, and I couldn’t figure out what was going on. And then, one day, I asked him, I said, “So, why did you get into real estate as a real estate agent?” He says, “To make all the money I could make.” And I smiled, and I broke it down for him because an average million-dollar producer as an agent only brings home about $30,000 a year. And a lot of folks don’t realize that. So, I started breaking down the commissions to him and showing him, and he goes, “This is messed up.” But I said, “But you’re so analytical. Why didn’t you go into real estate as an investor?” And he goes, “I never really thought about it.” So, that’s where he ended up going.

Gail Villanueva: So, I was thinking one day, I was talking to a friend of mine, I said, “Why is it that people get into real estate, and they don’t think about their best fit, and they don’t think big about the pros or cons, or even if their personality could possibly match up to the profession they’ve chosen?” And my friend was kind of like, “I don’t know.” I said, “You know what? I think I’m going to write a book on this.” So, I did. And I took the five professions that I had worked in, and broke down the pros and cons and personality types with each of the professions, so that folks can look at what the profession is involved before they committed to it.

Lee Kantor: And those are the five professions that you’ve experienced in and around the real estate business?

Gail Villanueva: That I have personally done. I’ve been a realtor, buy and hold, rehab – I don’t like the word fix and flip – a wholesaler, and a note investor. Now, there’s others. You can get into commercial and you can get in all that, but those are the five main ones that I came across. I mean, everybody can succeed in real estate. Don’t get me wrong. But without beating your head against the wall, have you considered whether you’re a people person or you like going and being of service? Well, known investors are of service. I’ve purchased nonperforming mortgages to keep people from losing their house, and remodified it because, again, on the bank, I could do what I want as long as I was usury law. And then, just help them keep their house.

Gail Villanueva: So, that’s what I started really looking at doing the last few years, is getting the message out. And then, this last year, we lost a year. So, I basically would have been doing it for about a year of trying to encourage folks to really sit down and think about what they want to achieve for themselves and their goals. And then, thinking about everything thoroughly before they commit. And what I found was there were no other coaches taking this into consideration. And I thought, “Well, how odd is that? Because you can teach the mechanics of the real estate business just as you can teach them the mechanics of flying a rocket.” But if you’re not enthused about it, you’re not into it, you’re not going to do well. So, that’s what I’m reaching out to as many people as I can to say, “Look, these are the characteristics that are most successful in the business, and these are the ones that are not.”

Gail Villanueva: And I’ll give you a good example. I was a realtor for many, many years and did really good. And then, I got offered a job with NASA, and jumped, and went out there, but kept my license and was able to do both. But it’s kind of like if you really want to see someone succeed, and you know what could possibly do to help them, you want to come from a place of service to do it. Because I spent a lot of money on seminars and things that just never really went anywhere, but as an agent now, when I walk into a place, I look at it like differently. Like if people say, “Well, the rooms are too small,” I’m like, “Take out a wall,” or “The color is horrible.” “I got a friend named Benjamin Moore.” You can’t do that. I bless all agents that I know now because they just have to have the patience of a saint, and I point that out too, and willing to work 365 days a year.

Lee Kantor: Right, they have to be willing to work on the days that most people have off or the evenings most people are out, because that’s when the people want to see the houses.

Gail Villanueva: Correct. And then, again, each transaction’s got a different story. And you’re balancing people’s lives, and they’re making the biggest decision of their lives. Well, as an investor, I look at it and say, “We’ll do the numbers right here.” But with a traditional transaction, you can’t do that. It’s like, “Oh, the house, the school, everything.” Again, the mindset. Now, I can go back to work as an agent.

Lee Kantor: Now, say, I have an interest in real estate, and I’m thinking about it, and I don’t know all the stuff you’ve just said. Like I’m just a regular person who, like, “I want to get involved. So, I watch those shows on TV. So, I’m going to buy a house cheap. And then, I’m going to fix it up. And then, I’m going to flip it.” Is that the best way to make money or is there a better way? If all I care about is making money in real estate, is that the best way or easiest way to make money? Or should I go the note way that you’re saying, which seems a little — I don’t know anything about that. There’s no TV shows about notes.

Gail Villanueva: No. Ain’t that crazy? That’s why I got into it too. It’s like, “Nobody was going to mess up that model.” Well, the things that you have to kind of take into consideration with that is active versus passive income and the taxing of that, because when you do a rehab, you’re taxed at an after-tax rate. So, depending on what the person’s tax rate is or how are things like that. The fastest, easiest way to make money is not the easiest but it’s wholesaling. You find a house, you put it under the contract, and you sell that contract to someone else, and then you get a fee because you found the deal. Fastest way to do it.

Gail Villanueva: Now, as far as a rehab, if you’re going to do a rehab, I mean, I’ve made a lot of money off of rehab, but I was married to that project for two months. I could turn a project in two months, believe it or not, because I had contractors, and I’d start marketing as possible. So, they returned pretty quickly. But the long answer to your short question was wholesaling, the fastest way; rehab, 60 days; buy and hold, they’re after cash flow; realtors, well, they’re a whole different animal there.

Gail Villanueva: But notes specifically focus on cash flow because back in the day, when I was growing up, we could retire when you have $3 million or $4 million dollars in the bank. But nowadays, things have changed a little bit. They’re looking at how much money do you need every month, create that cash flow, and then you should be okay for your retirement. So, getting money in every month, getting a check deposited into my bank account every month because I invested.

Gail Villanueva: My most recent one is still a buy and hold in Florida but, mostly, you’ve got to look at your tax consequences on what you want to do. If you love rehab, don’t do it as a hobby. And the difference between someone that’s doing it professionally to someone who’s doing it as a hobby is they don’t want to hire the contractors, they think they could do the work themselves. Most often, they can, but they’re going to be giving up the nights, and the weekends and everything else. And you can’t turn it that fast. I didn’t have the tools and equipment like these painters, and these plumbers, these electricians coming in to do my job. But I could do something that was fun. It’s called a prehab, where I could go with a sledge hammer and take out my aggressions for the day because we’ve had to take out a wall, or we have to take out cabinets or whatever to prehab it. I love prehabs because you could rip it down and not worry about if someone’s going to come back and fix it for you later.

Gail Villanueva: Another way that folks make money is looking for these rehabs, putting them in under contract, doing the initial cleanup, and then selling it at a higher rate or higher price to someone in the future. Like I take something down for $80,000 but it was worth a hundred, I could sell to a hundred and make $20,000 finder’s fee. And nobody needs a license to do that because you’re not receiving money from someone for service. You’re working for yourself.

Lee Kantor: So, then-.

Gail Villanueva: Ans then, another-.

Lee Kantor: Now, what is your day-to-day work right now? Are you spending your time doing some of those five real estate jobs? Are you spending your time coaching people, so they can pursue one of those five real estate jobs?

Gail Villanueva: Yes and yes. Since I’ve already purchased my notes, they just sit there making money for me. Unless I decide to sell a few payments or I decide to sell the notes, then they just sit there making money for me every month. What I’m recreating is the opportunity for folks to call me and have one-on-one call. And I’m also going ahead and creating a new – that’s going to be free – group where we can go in and start talking about these things. It’s a cash flow group. Because when you talk about cash flow, in whatever form or fashion, it comes from, whether it’s a real estate agent or someone holding properties, we’ll give an opportunity to talk. And I have talked to folks one on one. I’ll give anybody 30 minutes. I mean, seriously, we all have to help each other nowadays, right?

Lee Kantor: Right.

Gail Villanueva: I’ll give anybody 30 minutes to talk to, see where their interests are, see where they want to go, and then help them any way I can to achieve their goals and their dreams.

Lee Kantor: Now, in your life, you’ve gone through a lot of adventures, and you’ve kind of almost — I don’t want to say accidentally because I don’t know if this was accidentally, but you fell into real estate, and you really kind of immerse yourself in all the different — or not all but a lot of the different paths. And you found kind of the pros, and cons, and the trade-offs of each one, because each one, I’m sure you can be successful, and it might be the right fit depending on your personality type and your goals. What has been the most rewarding part of this adventure thus far for you? Has it been really — now, you’re at a stage in your life where it is about having a legacy, and giving back, and teaching that next group how to kind of leverage real estate for their benefit?

Gail Villanueva: Yeah, it’s a mix of things because when you sit there, and you look at this level, and you wonder what you can do next, it’s obvious that you want to go out and try to help people. And I didn’t come by accident on this. My dad got out of the Air Force after 30 years. We went back to San Francisco where he was from. And he started going to these FHA and VA with my uncle, and they started picking up properties. And then, they looked at Gail. I was 10 years old at the time, for goodness sake, but they found out that I like to paint and clean houses. So, that was my start, the 10-year-old kid helping my dad and uncle do rehab. And then, I became my dad. So, I started looking at my dad’s estate office. And then, I eventually took over his office management because it was a small office, but then life took me to Hawaii after that. But that was actually my start. It was that long ago, 1970.

Lee Kantor: Wow. So, your whole life has been there. I mean, your first dollars were real estate dollars.

Gail Villanueva: They were. And it’s funny because my whole family is in real estate, I’ve got a sister that her husband, they make subdivisions. I’ve got a cousin in California who is a contractor. A lot of us are in real estate, it’s so weird. And then, I started looking back in my family history. And this is kind of aside, but it’s funny. I’m living in Western North Carolina now. Not far from me, one of my great grandfathers was buying property, and sell it to his family, because they got land there back in the day.

Intro: Wow!

Gail Villanueva: He is trying to convince everybody to move to Tennessee and North Carolina, I just discovered this. And I’m like, “How creepy is that?” I came about this like 200 weeks ago, and I’m not even living very far from-

Lee Kantor: Where it started, right.

Gail Villanueva: … family land and I didn’t even know.

Lee Kantor: It’s full circle, literally.

Gail Villanueva: It is. But as far as the satisfaction, it depends on what profession, because any time you hand someone the keys to a new house at a closing, oh, that’s amazing. Any time you send a letter, I’ve called my borrowers – no, I’m not a collector, so you got to be real careful – but I’ve told them, “Hey, I want to help you.” They’re like, “What do you care? I sat there and wrote letters to that bank trying to get them to help me. Now, why are you helping me?” I’m like, “Because I’m called the bank of me, and I can do what I want. I don’t have FDIC and everybody else over there in my back. I have no regulatory requirements, again, except usury laws.” So, I can help these people. And when you call someone, and you told them that you’re going to work with them and do a loan modification, the responses have been everything from tears to disbelief on their side, and that just still is full of joy.

Gail Villanueva: And then when you do a rehab, of course, all your contractors are loving you every Friday afternoon. And then, when you give that person a brand new house that’s been — well, a brand-new used house that they’ve fixed up, make it pretty again, it’s unbelievable. There’s so much satisfaction in the real estate industry. But the main thing is, is keeping people in safe, comfortable homes. Because this is one thing I will share with you, and it’s kind of a difficult time, but it’s my driving factor. There was a time in my life – and people don’t believe this because of how my life has been – but it’s right after my mom died, and my dad married this crazy woman, and I hit the streets at 16. I left home at the age of 16.

Lee Kantor: Wow!

Gail Villanueva: And for one year, I was homeless. And I worked on farms, and I worked in people’s houses, and I did everything I could until I could get back to California and get my life back. Now, that, right there is why I am so driven in real estate because I know what it’s like not to have a safe place to call home to put your head at night. And it’s something I don’t share with everybody.

Lee Kantor: Wow! Well, Gail, congratulations on all the success and it’s just an amazing story. If somebody wants to-

Gail Villanueva: Thank you

Lee Kantor: If somebody wants to learn more about your coaching, or your business, and your generous offer of 30 minutes, is there a website they can go to contact you or get a hold of you or somebody on the team?

Gail Villanueva: Well, we are rebuilding our website right now, unfortunately. We’re going to recreate it. It’s at www.gailthenotegal.com, pretty easy to remember. If you go to that site right now, you’ll see me in my previous life as a very proud NASA propellants technician and environmental person, all those other fun things I did the 26 years I was out there, standing in front of an orbiter on the back of a shuttle carrier aircraft. Pretty cool picture, but that won’t be what my website is. My website’s going to be a place where people can go to find out about calling me, coaching, my book. And my email is gail@noteworthypro.com. Everybody can use that to get in touch with me. And you can find my book on Amazon, not that expensive, but I’ve really been very proud of how well that came out where. They can buy it in Audible. I mean, I actually did my own audio book. Have you ever done an audio book? Oh wow.

Lee Kantor: That’s a job. Yeah.

Gail Villanueva: It was crazy. But see, I wanted to do it in my own voice, you know.

Lee Kantor: Right.

Gail Villanueva: And my throat was raw, and I was talking to the person that did my final edit, who’s out of Nashville, he was awesome. But they can buy it anyway. I think my audiobook is right now like 99 cents, pretty cheap, but it’s got a lot of content.

Lee Kantor: Yeah. And that book is called Real Estate–What’s Your Best Fit: 5 Proven Careers To Create Massive Wealth And How You Can Achieve Financial Freedom. And I just bought one for 99 cents. So, I just-

Gail Villanueva: Thank you!

Lee Kantor: As we spoke, you made the sale. So, thank you. It was great for you to share your story. And thank you so much for doing that. And the website, gailthenotegal.com has a contact button, and it has phone numbers. So, please reach out to Gail. Thank you again, Gail. You’re doing important work and we appreciate you.

Gail Villanueva: Well, I appreciate you, and I am grateful that you’ve given me a voice to get out to folks, so hopefully we can go ahead and get some folks started. There’s a lot of folks that really don’t want to go back to an office environment, or they’re not sure exactly what’s going to happen, though. So, maybe this is a consideration either full-time, or part-time, or as an aside job of looking at real estate.

Lee Kantor: Right. And it gives you the flexibility and it’s kind of to choose-your-own adventure, like you get to describe in your book. And I’m excited to learn more about it.

Gail Villanueva: Well, thank you. And I appreciate you having me on today, Mr. Kantor. I really do.

Lee Kantor: All right. This is Lee Kantor. We’ll see you all next time on Coach the Coach Radio.