Using Leverage To Buy & Hold Notes ?

[Luther Wilson III]

For those investors who are buying notes right now or perhaps someone who has done so in the past, what would it look like to use leverage when buying them? I'd be very much interested in buying more notes but maybe have been limiting myself somehow when it comes to how to do more of them. Or maybe it's a lack of knowledge on how to use leverage in general to buy them? Is there a way to more or less BRRR into them? Or put another way, if we can use hard money or private money to purchase them - how would that look on the back end? Meaning that if we buy a note using short term funding and have to refi or resale in a relatively short period of time - is there a way and if so, how would you refinance on a note if you don't have tile of the property? Or is there a different way to swing it altogether? If an investor wants to buy notes but doesn't want to have all of that capital tied up for a long period of time - how would they go about recapturing some of that equity without disrupting what's going on with the borrower (deed holder) / home owner?

[Justin Winn]

This sounds like you may become over leveraged if you’re trying to take on more debt to buy notes. But I don’t know what your financials look like. If you’ve got a good process and you’ve got reserves in case you don’t get paid in accordance to your note then I don’t see why you couldn’t take a fixed rate personal loan, or similar product. I personally would not want to use hard money or other high interest debt because it only increases the risk and reduces profits in this scenario.

I hope this is helpful, and best of luck no matter what path you take.