EP 286 – Effective Tips For Note Investors With Chris Seveney And Gail Villanueva

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NCS 286 | Tips For Note Investors

NCS 286 | Tips For Note Investors

Just starting out? A lot of folks getting into the note business will go ahead and commit to getting the free online training courses, listening to the podcast. That only gets you so far. It’ll give you a 40,000-foot view of what the note business is about. But when you get down to it, there’s so many moving parts in a note transaction. It can just make a complete left turn on you if you’re not careful, so having that additional safety net is crucial. Learn more tips for note investors with guest hosts Chris Seveney of 7E Investments and Gail Villanueva of Noteworthy Investments.

If you’re a borrower in need of multiple options with the opportunity to stay in the home, then Chris Seveney of 7E Investments is your guy. Located in Washington, DC, Chris specializes in the acquisition of first position nonperforming and performing notes. Over the past two years, his company has acquired over 50 assets and have provided their investors with above average returns. Gail Villanueva has been a licensed real estate agent since ’84; but the market changed. When everybody was zigging towards overbidding on rehabs, Gail decided to zag into notes. How many notes? Noteworthy Investments just closed on their eighth note, going from zero to 17,500 miles an hour. That’s what you need to do achieve orbit.

Listen to the podcast here:

Effective Tips For Note Investors With Chris Seveney And Gail Villanueva

I’m Gail Villanueva with Chris Seveney and we are your guest host. Starting out, we’re going to talk about a few suggestions we’ve had and a lot of other tips and tricks for note investors. Take it away there, Chris.

Thank you, Gail. We wanted to start off by talking about some initial suggestions for starting out with note investors. A little bit background, I started note investing in 2017 and got my education through Scott, primarily a lot through Scott. One of the biggest suggestions that I had when we started out, was listening to a lot of the information he provides. Basically, at the time of his podcast, which he would run daily, and one of the things that I would do is working full-time. I commute back and forth to work. One of the things I did is I grabbed the phone out and with that I would hear things and just make comments. Really just record them, to write them down to follow up on things and gave a lot of great ideas. One of the comments I remember one time around Christmas time was Scott was thanking a lot of the people who is in business with, including all people he bought from. I was still someone new to notes and all of a sudden Scott ratted off five or six people who sold notes, which are a lot of low-hanging fruit. As someone’s starting out, it’s where we all started. That was one of the top suggestions that I had. Gail, what about yourself?

I started studying about the performing notes actually. I take some classes, one of them with Jeff Armstrong and was really impressed, but it didn’t offer enough excitement for me. I still liked performing notes and everything but I decided to go and jump into the nonperforming world. I joined a meetup group here in central Florida and there were six people in the meetup group. Two of them were new like me, two non-performers, and the two of them were doing things. Two of them just had the deer in the headlights look, they wanted to do something but weren’t quite sure.

The ones that were doing things where Scott Carson’s students. I decided to go ahead and call and I called Scott’s number. Thinking I get a hold of somebody other than Scott and that just blew me away, he answered his own phone. He said, “Of course I answer my own phone.” He’s so down to earth and seems to be very caring about the success of us and his students. It just resonated with me. I said, “I’m going to go ahead and jump on this full bar.” I did and I’ve got eight notes now, so something must be working.

Did you start out JV-ing with someone or did you buy a note on your own and what is it, a performer or non-performer?

The only ones I bought are non-performing first mortgages. I haven’t done any of the certificate, CFDs yet, contract for deeds. I’ve just done notes and I decided to JV on the first two because I decided it would be a good way to start and it has been.

Because there’s a lot of back and forth out there whether you should JV with someone on your first deal, buy your first note. Me, I actually bought my own and then JV on mine. I started out buying a few and when I started, the ones I bought was a performer. I think buying a performing note or non-performing, the process is still very similar in many instances. For people who are out there who are probably not considering JV-ing and want to try and do it on your own, it’s a personal preference. Based on experience, it’s not a one size fits all, but I would recommend for people, performing definitely gives you a lot of the insight in regards to learning the context if you use it in Madison and the boarding process and a lot of those things about getting the assignments recorded and stuff. What are your thoughts on that? Would you agree with that?

NCS 286 | Tips For Note Investors

Tips For Note Investors: Performing definitely gives you a lot of the insight in regards to learning the context.

I would agree with it and that’s an excellent perspective. What I actually didn’t take into consideration, I guess being a former rehabber living on the edge all the time and you do, I liked the analysis and determining whether something was a good deal or not. You have a good insight on that and a good perspective on how to look at both sides and it’s a good consideration.

What are few of the other things for people starting out, what other suggestions do you have for newer investors in this note space?

The best thing I can say is you do get to a point of educating yourself and I think we’ve all talked about educating ourselves and make sure that we get a good solid education. It’s just like college, when we went to college and state school, all these different things you learn and you get the education and then when you walked out the door it’s like, “Now what?” That’s when I found the benefit of mentoring and networking and having the safety net of everybody that’s in the mastermind, because we all care and we help along the way. What about you, with becoming as someone coming out of the box for the first time?

A few things of I think the tail on what you said, the analysis by paralysis is something that I went through as an engineer. You over analyze everything to the nth degree and until you jump in, that’s a big learning curve. I think it was Scott or somebody who hit the nail on the head when they said buying a note is like golfing, you can watch all of the instructional videos in the world about how to golf, but until you step up to the tee and swinging that club and hit it, it’s really a completely different field. That’s one component to it.

The other thing is the majority of people in this space are very friendly and out to help you. Like Scott, he’ll tell you at Fast Track, pick up the phone and if you need him, call him and majority of times he does answer. I was surprised at that as well because of how busy he is and what his schedule is like. He still makes time to talk to a lot of people who is involved with him. I think the majority of people in this business are like that. They’re very helpful and I would tell people to communicate and I learn from things like the Facebook group that Scott has, where people can ask questions and learn about things. This business, like most businesses, the more you network the better off I think you’ll be.

One thing I have when I’ve talked to folks about getting into the note business is a lot of them will get as much free training online as they can. They’ll go ahead and commit to getting the free training, listening to the podcast. That only gets you so far. It will give you a 40,000-foot view of what the note business is about. But when you get down to it, there are so many moving parts. We’ve talked about how many moving parts are in a note transaction and the different ways it can go or it can just make a complete left turn on you if you’re not careful. Having that additional safety net is really very important. We can’t operate in a vacuum.

It’s all about speed. Something you’re very familiar with, from your background at NASA. You can learn it on your own and it’s just going to take a very long time. The more education you get, the more you advance. I started out with the virtual note buying workshop, which I thought was a very good primer in regards to understanding how to bid, understanding a lot of the nuances and logistics to really get your feet wet and get start your foundation. Note Camp really introduces you to a lot of the players in the industry along with a lot of other tools and software. That’s where I really had most of my education and that’s when I started really buying notes and constantly buying notes.

I mentioned this on the podcast about the Fast Track, which I know you’re excited that you’re going to be taking soon. The name basically hits the nail on the head where it really can expedite things and fast track where you’re going as a newbie. It really is all dependent on your level of the education you want to learn and how you want to go about it. It’s personal preference for everybody on things but starting out, there’s a lot of free education out there. I think some things you also want to get a paid education because I think the return on your investment can be a very high return based on the education that you get.

NCS 286 | Tips For Note Investors

Tips For Note Investors: The return on your investment can be a very high return based on the education that you get.

As an engineer, you also know that you learn more from what goes wrong than what goes right, and one of the things that I don’t want to learn from going wrong is my family’s financial future and my financial future and my record also. Folks may inadvertently, as people, do things that may not be quite copacetic in this industry and you want to learn the protocol and you want to learn the language and you want to learn the context, most of all, on how to approach the business.

What’s sad is sometimes you’ll have people who they will misrepresent the rest of us as note investors.

That happens to any industry.

It does, and what this industry being such a small, tight-knit industry, but the reality of it is real estate in general is very small and tight knit. I work full-time for developer in DC and I still see the same players all around, whether it was company A or company B. Now every business you’re in, virtually it’s a small world. As a note investor, just be thoughtful of what you’re doing. If you have a question about something, feel free to ask other people, “Is this closure? Should we be doing this?” Get people’s opinions. Like I said, the last thing you want to do is ruin your reputation and do it accidentally because it’s just something you didn’t know.

You’re juggling two jobs. We did a podcast a little while ago about the work life balance. You and I both have little ones at home. We talked about that, pointing that work life balance is very important to me, I’m sure it is to you also. What do you do on a typical day as a note investor? Nobody really talked about what goes on behind the scenes, behind the computer.

Especially for those with the full-time job, it’s really focusing and time-blocking your schedule. One of the things too that I mentioned is setting expectations, because it’s not as much the note side of things. It’s the business side of things. Where I struggled is really planning out the roadmap for building a calculator, for example. How long did it take you to build your calculator?

I’ve actually taken a couple of different ones. I’ve looked at some even with advanced degrees. I look at the basic things because you’re right, you can’t get into that, “Is this a good idea? Is this a good note?” My calculator is probably two together and it serves its purpose. The main things I want to find out or the returns, ROIs, and the three exit strategies. How about you?

I probably spent a month on mine and I overanalyze and killed it, put too much in it probably. Part of the reason why is, talking about a work life balance. I’m also in the process of getting a master’s in real estate finance right now. I took a finance class and I posted on We Close Notes, one of the textbooks I had from a finance class that really is what I shaped and built my calculator on. I spent too much time on it because I was focusing too much in my business versus on. When you realize that, I spent two weeks on it, that’s two weeks that you’re not doing something else.

Then when you go to do a video, usually when you start out, your first take isn’t what you record. You probably spend the half hour recording a video and then you’ve got to remember you only have one to three hours a day in notes. It’s really focusing and trying to work on things. The time it takes to record a five-minute video may take you a half hour and you really got to manage that time and put that into perspective to leave enough time for yourself and set your expectation that after a weekend seminar, you know how to buy a note and you could go buy a note. To scale your business, it will take time. It’s not going to happen overnight.

I’ve seen both yours, Eric Heiden’s and Cody Cox’s videos and I personally think that we should have an Academy Award for video on notes because you guys are the masters, you make it so easy. I’ve gotten a little bit better on it. I also do mine and then post them afterward. I can’t bring myself to do a Facebook Live like this. What Scott did was he’s given us an opportunity to get outside our comfort zone, which I believe we have and doing these podcasts really increased my comfort level a lot. I don’t know about you.

It has, and the other thing too with videos, I’ll give you a little hint. I bought the software called Camtasia. What it allows is when you record, it’s really easy to snip and cut things out. If you are mumbling, bumbling and stumbling or you screw something up and you got halfway through it, but you like the first half of it, you can cut and then merge videos and add music to it. Something that I found through somebody who does marketing through Infusionsoft sent me direction to it and since I’ve started using that, I’ve found making videos a lot easier. It saves time because I’d record, call five or seven-minute case study and then you get to like at end of the case study and they blow it at the end or you fumbled something. It’s like, “I don’t want to record this whole thing again.” I keep the first six minutes of it and then record it and then can intertwine it and it loops without hesitation or without cutting in line to it. I found that to be extremely helpful.

NCS 286 | Tips For Note Investors

Tips For Note Investors: To scale your business, it will take time. It’s not going to happen overnight.

Another thing that hits upon what’s going on with Gail right now is in a day in the life of a note investor, you don’t know what’s coming down the pipeline. You may get an email from a servicer that is either good or bad news. I got an email from a servicer where a borrower who hasn’t paid in 90 days and they email me, telling me that the borrower is paying off the entire loan. I just started shaking and scratching my head like, “What’s going on?” The reason why is the borrower went through a divorce, ended up renting the house to the daughter and was having the daughter pay the mortgage. The daughter essentially was sending the mortgage bills, but she was sending it to the prior servicer. She wasn’t sending it to my servicing company.

When they realized that the last three payments have gone out and they just had gotten a tax return and it was a little balance, it’s under 10,000 left on UPB, but they realized, “Why don’t we just pay this thing off.” That was on the positive end in a day in the life of some things that can occur. Other instances that may occur where I have a borrower who’s coming close to foreclosure and then sends in a respite Truth in Lending Act letter, basically saying that the servicer doesn’t comply with something and then want a response within so much so period of time, which may cancel your foreclosure, which I had that happen in Alabama.

I should’ve listened to Scott not to buy a note in Alabama. It was actually one of the first four that I bought which I touched upon earlier. A few other things just to comment on is what you’re focused on marketing sourcing versus revealing notes in due diligence. That probably once you get going get split probably 50/50, maybe even a little more towards the marketing side of things to start really marketing. That really focuses on staying consistent. Once you get set up, like I’ve been set up in buffer and I send out two posts a day. In the morning, I send out some inspirational quote. Then in the evening I’ve been sending out Vlog, as Gail Greenberg says a video blog with a link to my website and an article.

Once you get set up and consistent with that, it really gets set in motion where I can do a week’s worth of stuff and get everything timed on a weekend, which allows me during the week to focus on responding to emails, responding to the servicer. One concept that I’ll let people do a day in the life is email. There’s a stat out there that says people check their phone a few hundred times a day. What I started focusing on is I check my email first thing in the morning. I’ll wait probably three, four hours, check it at lunchtime, and then check it in the evening. I may glance at it, but typically those are three times I’ll respond. What happens a lot of time is you’ll be working on something, then you’re going to get an email that throws you for a curve ball and everything you’re involved in, you lose track of that to respond to the email and to get caught back up and you’ll spend ten minutes trying to remember. If you add each one of those ten minutes up, throughout the day, it adds up.

It definitely does because I find that I can get caught up in emails too, so I check it only a couple of times a day too. If I can jump back to when you said that you set everything up on the weekend, what system or software do you use to set everything up ahead of time?

Buffer is what I use, which posts to my Facebook page, my Facebook business page, Instagram, which you have to still do manually, Twitter. I also post to LinkedIn because I work full-time. I don’t post the notes stuff primarily to LinkedIn, but if I find interesting articles about construction and real estate development on the weekends. I’ll write a quick post on that to post to LinkedIn on the business side of things as well. That’s been the software I’ve used to get everything out into the social media world.

It seems that the systems and processes have been focusing a lot on that lately to streamline the business so you can scale it.

Gail, you’ve got eight notes that I know you’re working on right now. Why don’t you share a little bit about the day in the life that you have?

I broke it down into days, that’s what I do. Tuesday, Wednesday and Thursday I tend to focus on reaching out to banks, asset managers, and try to get tapes. Friday ends up being catch up. I do marketing every day. I try to market at least 30 minutes a day and carve out the time. I’m a little more negligent on doing the videos that I’ve been doing. I try to do a Sunday noteworthy nugget and the last couple of ones I’ve done have not been so much directed towards notes, like Memorial Day, that’s a significant holiday to me.

I also spend a good deal of time analyzing. I’ve had an opportunity to get some notes that have like 600 or 700 assets on them. When I mentioned that to folks who are like, “That’s a lot of assets to look through.” Yes, it is, so you have to come up with a way to go through those assets pretty quickly and I’m only looking at owner occupied in the states that I focus on. Within a certain price point that I’m comfortable working on, anything that comes in on to Florida usually catches my eye obviously because it’s in my home state. I just send out the bids and wait for acceptance or counters.

NCS 286 | Tips For Note Investors

Tips For Note Investors: People will come as long as it’s a good deal.

You mentioned about your marketing and sending out emails and newsletters and stuff. How successful have you been in finding partnerships on some deals through your email marketing?

It’s actually turned out pretty well. Some of the notes that I’ve purchased, I wanted to hold for myself, to have some money going into the 401K. The returns are not anything to write home about. They’re definitely double digit, but they’re under about 20%. I try to get over a 20%, 25% ROI. I want to make sure that the notes are really solid before I put them out to my network. I have had a quite a few people reach out to me about, “I like your newsletter, I’m interested in JV-ing.” Then it’s a matter of going through and actually doing some due diligence on the JV potential partner, because you do want to make sure it’s a good fit.

I’ve had to tell a couple of JV partners that they’ve wanted things for like $10,000, which would put us into the CFD category. In other ones that I just didn’t feel would be like a short-term marriage, if you will, for anywhere from six to sixteen months where you want to make sure you can work together and you don’t want to take the last of their money out of their savings account, their 401(k). The long answer to your short question was, I had been pretty successful. How about you?

You hit upon three great points that you just spoke of. One is basically the answer, which is if you mark it, people will come as long as it’s a good deal, which you made. The second component is I do the same thing. Every offer I put in would be a deal that I would buy with my own portfolio. If I didn’t have a partner, I would still buy that asset. That’s a key component. I just don’t buy things trying to hunt down a partner. It would be something I would buy and I would want to hold. I know Dan posts a lot about his criteria is would he be willing to hold that property and rent it as a whole? There is a rental, which I think is a great idea or concept because it’s one of those things where a lot of instances, you may take back that property and is that what you want in your portfolio and then other return satisfactory to you to provide a return to the JV.

The third thing you hit upon is interviewing and your joint venture partner. It’s critical to make sure that you get along with your joint venture partner and you’re on the same page. You don’t want your partner thinking that the deal is going to be a quick Cash for Keys and get out and he’s going to make a quick 10%, 12%, 15% or 30% or whatever his expectations are in three to six months. You’ve got to go in with the mindset and make sure they understand. This is probably a twelve to eighteen-month process. If it goes sooner, great. One of the things that I caution people on is if you mark it and show deals that are providing a 60% or 80% return.

For me, I look at that and honestly, I don’t believe the numbers and I would be less inclined to actually reach back out to you because it would make me feel like there’s something wrong somewhere with that deal. Secondly, I wouldn’t recommend to people advertising something with such a high return anyways, because that’s the expectation that the partner is going to set in their mind. If somebody sends you something, “We’re looking at potentially 60% on this deal,” what do you think the first number you’re going to remember?

You’re absolutely right about that because what you do, you under-promise and overperform. I’ve always been conservative on my numbers and that also might be a little bit of a detriment to me because I would rather have people happy at me than mad at me. I tend to overestimate costs which may be cutting my own throat too at some point. You’re absolutely right about making sure that there’s a good fit with the people and that you’re able to have that relationship. My business model is based on trying to keep people in their house. A lot of us are not looking for getting REOs, where we are the owner of the REO.

NCS 286 | Tips For Note Investors

Tips For Note Investors: It’s critical to make sure that you get along with your joint venture partner and you’re on the same page.

I’m not looking for inventory for rehabs. I’ve talked to one or two people over time that were our former rehabbers and they were looking at this as a way to evict people, foreclose on people, so that they can get rehab projects. To me that’s cruel, but that’s just me. I don’t feel comfortable doing that and I don’t want to do that. I want to try to have a balanced transaction all the way around and if it ends up that people have to leave their home, I can’t imagine the difficulty that that would be. I try to give them a little bit of dignity and ability to go ahead and move on with their lives as intact as possible.

Which brings up a point, moving on a little bit to the next topic. For recall, you’re a realtor and a rehab fix and flipper, who is now a note investor. One of the things that I know we talked about earlier that we want to talk about is when we talk about your network, a lot of people just think of other note investors. I think that’s somewhat of a misconception because it’s really making sure that you spread the word out to other types of investors and how that can help other investors. Since you’ve been in the fix and flip business and you know how competitive that is right now, I’d like for you to share some thoughts on regards to how note investors can help others, whether it’s a realtor or wholesaler fixing flipper, buy and hold investor. Why don’t you share some thoughts on that?

You and I think a lot of like, which I really love and I love doing this podcast with you because of that reason. One of the things that I found in my career with NASA is I was in some pretty intensive offices. I was in IT for a while, then I went into the environmental and then I was in propelling some life support. The reason I’m telling you that is because I was a go to person if somebody wanted to find somebody. Who do you think could do this? What do you think about, “I need this taken care of?” It was either I knew the person or I would tell them, I know people who know people. I’m segue-ing into that for a reason.

I’m very well-connected. I’m very blessed with that. I am an eXp realty agent. eXp is all over the country. If I need an expertise or if I have to turn something over to someone, I’ll call them and say, “I’m not going to list it, you get both sides, go ahead. God bless you for doing that,” and I gave it to them. That seems very generous and it is, but then I’ll tell them, “I’m calling my investor buddies. I’m calling my wholesaler buddies. I’m going to put this out to my network, but I want you to work the deal because it’s very symbiotic what we do.” If we have an unfortunate incident where we have to take back a property, what are we going to do with it?

Do we want to rehab it or do we want to put it out to other people? Because we can provide inventory to wholesalers. We can provide inventory to rehabbers and we can provide inventory or an opportunity for an end user. Because it’s a seller’s market, has been for quite a while. Properties are going to like 90% of their list price right now. In some cases, almost 100% of the list price in certain areas of the United States. There isn’t very much inventory, so we can all help each other. There’s enough business out there.

As a former rehabber, it’s funny that you might have one or two deals a week that comes up at the most, but you have 50 people bidding on it. In the note business, I’ve found that we all have different criteria. We all are looking at different things. We all are looking at different areas of the country. The competition is not there but the relationships and the desire to help each other succeed is always there. It’s great with that. We all help each other. We all can benefit from each of the different industries that we’re in, regarding real estate.

You’ve got some good points there and I want to share just a quick story too about how I’ve got a lot of contacts on LinkedIn and I’ll reach out to people, realtors, wholesalers and investors and they’ll ask me, I’ll connect with them and they’ll reply back, “What is it that you do?” I basically will tell them I’m a note investor. I buy first position nonperforming notes with the attempt to keep the borrower in the house, but in some instances that we do have to take that property back. They didn’t even read that last sentence I sent and basically be like, “You can’t help me in any way, shape or form.” It’s the market right now is tight as it is. Where we are, we don’t need note investors in our area.

I took that and I thought about it for a second. Part of them wanting to chuckle because the reality of it is we don’t compete with wholesalers or fix and flippers, but they definitely could or should network with us because they’re having trouble finding properties right now or finding properties at a decent deal. If we’re buying these assets at $0.35 to $0.55 on the dollar, if you get something that’s $60,000 property, say you’re all in it for 40, even. They’re still right now what people are paying the old 70% rule, and you can attest to this, I think that 70% right now is thrown out the window in regards to that and I think it’s closer to 80%, 90% and people are looking for these deals and trying to wholesale and they’re reaching out and spending all this money on mailers and letters and so forth.

I would think if a wholesale or fixing flip board joined a note group and said, “Is anyone taking properties back in this area? I’ll buy them for you.” Either pay cash or even work out a deal with them where you hold the note for six months while they rehab it, it’s powerful. I have somebody in North Carolina I work with now. It was actually a contract for deed. We do Cash for Keys. Long story short is the BPO that was given to me by the realtor who actually went inside the property was off by about 60%. We ended up selling it to an investor and I’m holding a note for her and she’s in there and now fixing it up and so forth. The property which were told was worth $50,000, was only worth $30,000. We sold it to her for $30,000, carried the note, and now she’s rehabbed it and now the property’s worth about 65,000 and she’s going to go refinance it and probably another six months.

Once you refinanced it, she’s like, “Can we do this again?” I’m like, “Yes.” This is a great concept. I know she can find someone like that because as a note investor, the worst thing for me is when I have to take a property back and have to do that management of a vacant property. Whether I’m trying to sell it or rehab it, that’s not what I’m in this business to do. I will do it if I have to. It’s pretty much what I do for my full-time job and it’s very time consuming. I’m more about trying to work that borrower and try not to take these properties back.

NCS 286 | Tips For Note Investors

Tips For Note Investors: The competition is not there but the relationships and the desire to help each other succeed is always there.

That’s a good strategy. I’ll go a step further if it looks like there’s a property that’s going to be coming back into my portfolio. I will go ahead and call folks and say, “It looks like I’m going to be taking this property back, are you interested in a project?” I put it on their radar right away. If it’s available, I’ll say, “It ended up we reversed course and we’re able to keep them in,” or whatever. I try to do that reach out in the front end. Recently, I had an REO and I call the wholesaler and tried to wholesale to a wholesaler.

Now it was funny, the guy had been a wholesaler for a very long time and he was surprised to get my phone call. He’s like, “I never thought about doing it this way. How are you going to do that?” I said there’s enough meat on this bone for all of us. I’m not going to be greedy on it. If I get it to you then you can do what you want with it. Sometimes you have to take that initiative and joining a RIA, the local RIA will give you access to wholesalers and rehabbers and buying whole people and notes. It’s a good strategy and I think we can all benefit from each other. No doubt.

Another note nugget you just threw out there again is don’t be greedy. On these deals, if you take back an REO and you can make a few bucks on it, or even if you can return something to your investor, I would do that 95 out of 100 times. If it gets me out of the deal versus having to get it rehabbed, get it listed and granted you might make some extra money in the grand scheme of things by doing that process, but what’s your time worth. It’s a missed opportunity because you’re spending your time figuring out, is your rehab or finishing it and then you have to have someone check on your rehab or because it’s most likely not in your area, so can you make money off of that?

Absolutely, it can make money all day long, but what are you? Are you making less than the opportunity that you might’ve been able to pick up three more notes by selling that asset and make some money on some deals that could be really good deals versus trying to go buy the skin on another deal and short change it. That’s one thing, definitely don’t be greedy and that’s always one of my rules of thumb is, I’m not going to be greedy in this business because we all are in it to make money and so forth, but I have to evaluate it from a big picture of what’s the time, what’s the overall return, because you might make an extra $5,000 over six to eight months, but if you’ve got that money back to your partner in that timeframe, could you have made that money somewhere else or even more. That’s just something that you also have to evaluate and consider.

I was a project manager for NASA, it sounds like overkill, but it worked out very good because I could turn a property from the time I closed on it until the next closing in about six weeks. This is where it gets really sketchy because it looks on the outside like doing rehab is pretty easy. I’ve built a team in three counties, the three adjacent counties to where I live here, plus the county that I’m in, for folks with painters, roofers, flooring people, because I don’t actually do the rehab myself, to go in there and get the job done. You don’t have that type of support system trying to go to a different area to try to build that and get reliable people and not know the permitting laws and everything else like that.

It just piles on each other. It’s a lot easier just to go ahead and turn it over to a wholesaler or turn it over to a rehab or that works in that area. Then trying to oversee a project because it, believe me, before I got out of doing it full-time, there were a lot of folks that host up rehab jobs and then I would look at it and just out of curiosity go. I knew it was on the market news, rehab, then go back in and look at it a couple of months ago, this is really bad. You have to really know what you’re doing on both sides and people said, “Why do you do that? Why did you like to do that?” Because I like to find a dogged-out house and bring it back to splendor.

Gail Greenberg asked me about that. She says that’s the nurturing part of you, the mother part of you that wants to take an ugly baby and turn it into something. It’s something I’ve done my whole life ever since I was ten. My dad and uncle were in real estate and I’ve cleaned their rentals and made them all nice. They had a saying, if something is clean and shiny, it’s sellable and it’s rentable and that is so true and it stuck with me.

I’ve found that it’s just better to have someone do it. Stay laser focused on one aspect of real estate. In our cases you do construction, which is great and very admirable, especially in an area that you work in. I’ve traveled to DC quite a bit. Stay laser focused because it’s great to just throw spaghetti against the wall and see what sticks. If you develop the expertise and you become a subject matter expert on something, and in our cases, we become subject matter experts on notes, it’s great. It’s a great way to go.

NCS 286 | Tips For Note Investors

Tips For Note Investors: Stay laser focused because it’s great to just throw spaghetti against the wall and see what sticks.

With that Gail, we’ve talked about our topics. Why don’t we have you talk about briefly where you’re investing, what you got going on and how people can reach out to you?

I’m Gail the Note Gal at Noteworthy Investments. 4321 417 1142. Right now, I am investing in Ohio and Indiana, North Carolina, Florida. I want to talk to you a little bit more about Alabama. My mother in law is in there. We tried to look at some properties up there, Ohio, Indiana, and North Carolina, South Carolina. I’m looking at first the non-performing notes with the intent on getting people to be able to stay in their homes. I’m also looking at CFDs but I haven’t bought a CFD yet. GailTheNoteGal.com is my website and you can see some of my inventory up there. How about you?

I can be reached by email at Chris@7eInvestments.com. My website is 7einvestments.com. My investment area, I typically tell people I invest south of the Mason Dixon and east of the Mississippi. I start out in New York, New Jersey. I had one note in Pennsylvania, with the foreclosure timeframe and costs there are little lengthier than I want. I’m probably not going to do too much more there. One state I really like is Maryland and the reason why is it’s a little more difficult to get into Maryland. I’m based in DC and I work full-time in Maryland. I have a great team of attorneys, contacts, and title companies here in Maryland. There’s the debt buyer license concerns in Maryland.

I’ve had a lot of success in Maryland and I’d say about 25% of my portfolio’s in that state, similar to you, North Carolina. I really like Indiana, Michigan, they’re good states. Florida, I’ve got a few notes. Ohio, I’ve got one, which has been a challenge that I’ll share with people once Franco can record my deed in lieu on that one. That took five months to get. Like a lot of people say, get a team in place and make sure you have an attorney, a realtor, and people in place when you invest in some of these areas because they’re going to be your best friends and be the guidance because they’re really the experts that you need to manage in this. Gail, it’s been a pleasure. I believe also we are teed up to host again as well.

Yes, I think that’s a day that is the last of us hijacking Scott’s podcast. It’s going to be great. I’m looking forward to it, absolutely.

I look forward to it and everybody, thank you. We look forward to hearing from you all. Any questions or comments about the show or anything in note investing at all, feel free to reach out to Gail and myself.

Links mentioned:

About Chris Seveney

NCS 286 | Tips For Note InvestorsA Senior Level Executive with 20 years’ of progressive leadership experience in managing complex real estate projects. I have had the opportunity during my career to be fiscally responsible for over $1B of new construction and renovation projects. The project types were from a balanced portfolio of Residential (Multi-Family); Office; Retail; Mixed-Use; Government; Higher Education and Hospitality.

My responsibilities include:

• Develop & Implement new construction project SOP’s on all aspects of operations including
Budgeting/Forecast/Financial Management; Quality Control; Contract Management; Project
Management; Procurement.

• Collaborate with project team, interface with clients and deploy technology and green building
practices.

• Coordinate & implement construction methodologies (BIM, LEED).

• Provide leadership, mentor subordinates and project team members through communication,
expertise and lessons learned.

• Work with local jurisdictions, Property Owners and Design Team members in development and
construction.

Real Estate has always been my passion. Being a self-driven entrepreneur and leader, I am continually looking to enhance my skills and abilities. My area of focus has been on Real Estate Development. To pursue my goal and further my career development I am enrolled at Georgetown University to obtain my Masters in Real Estate. I have also continued to grow my passive income investments for my personal portfolio through the acquisition of buy and hold properties and Non-Performing Notes as a note investor.

Expertise:
• Construction Management
• Estimating
• Preconstruction
• Planning & Scheduling
• People/Resource Management
• New Construction & Renovation
• LEED & Sustainability
• Financial Analysis & Modeling
• Training & Development
• Contract Negotations
• Buy & Hold Properties (BRRR)
• Note Investing
• Distressed Debt Acquisition
• Luxury Apartments

About Gail Villanueva

NCS 286 | Tips For Note InvestorsGail the Note Gal (Noteworthy Investments, LLC) is a privately held company specializing in the purchase of non-performing debt secured by real estate in most of the major metroplexes and emerging markets across the country. We partner with investors to purchase these assets and deliver to them consistent high returns. All of our investments are secured by the underlying properties and we purchase the non-performing debt at well below market value. We are able to acquire these discounts due to our relationships with banks, hedge funds, and other investors.

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