Selling Performing Notes to Fund Your Next Real Estate Project — Experiences?

Question

Hi BP Community,

I’m curious how other investors are navigating performing residential mortgage notes. Some investors sell notes they hold to unlock liquidity for new flips or investments, while others prefer to hold them for ongoing cash flow.

A few discussion questions:

- Have you sold performing notes before? What influenced your decision?

- How do you handle due diligence on smaller notes versus larger pools?

- What lessons have you learned in pricing or timing the sale of notes?

Victoria OHare · Answer

That’s a really solid approach — balancing monthly cash flow with selective profit-taking keeps the portfolio both liquid and growing. I like the idea of reviewing potential note sales monthly based on pay history and seasoning; it’s a disciplined way to stay nimble while still compounding returns. I’ll definitely check out your resources — always appreciate when experienced investors share real lessons learned from the field.

Jamie Bateman · Answer

Hi @Victoria OHare, in our fund we balance cash flow vs. taking profits every month. We review which loans in our portfolio we could sell for a profit (likley sale price minus our all-in $) once per month. Typically if we can sell a loan for a profit of $10k to $15k, we strongly consider selling it. Recent pay history (specifically for re-performers) and seasoning are important factors in this decision.

We have a lot of free resources on our site about how we do due diligence when purchasing notes.

Lots of lessons learned!

Chris Seveney · Answer

We sell performing loans, we typically sell when we have other opportunities and look to recycle cash. Due diligence on a note is the same whether its on 20 in a pool or one loan. We do it all in-house. Regarding lessons learned, I have about 300 podcast episodes of lessons learned in note investing.