Note-on-note financing lets investors recycle capital faster to buy more loans. • Short-Term Flexibility: Terms usually run 2–8 months, which matches the typical workout/liquidation timeline. • Diversification: By leveraging capital, investors can work multiple loans in parallel instead of tying up cash in just one asset. 

I never really had much $ to invest in real estate, so I recycled equity to scale up and use OPM to buy more and more.

But no use crying over spilled milk and I really can't complain about our situation.  

Couldn't have gotten that far without being able to recycle my funds over and over again.

Quote from @Drago Stanimirovic: Kevin, you're thinking like an investor already , BRRRR is a great way to recycle capital, especially if you're putting 20% down and looking for strong cash flow.

The smoother your scope of work and documentation (invoices, photos, permits), the faster it goes.Bottom line: plan to carry the first 20–30% of the rehab yourself, then use draws to recycle that capital through the project.

It’s exactly how a lot of my clients avoid delays and keep recycling their cash into new deals.

-Do you prefer to refinance and recycle capital?

Full-Appraisal Loan (75% LTV) – When Leverage WinsExample:You’re buying a stabilized rental with plenty of time before closing—no bidding war, no motivated seller.Purchase Price: $200KLoan at 75% LTV = $150K (you bring $50K cash)Appraisal risk is low because comps are solid, and you want to keep more cash for the next deal.This works best when:You want to maximize leverage and recycle cash quickly.Timing isn’t as critical as long-term financing terms.My Opinion:Speed wins when the deal is time-sensitive or ultra-competitive.Leverage wins when the market is stable, the appraisal risk is low, and you want to stretch your capital further.

For rent, I’m conservatively using $1,500, but there’s a chance it comes in closer to $1,600.CategoryPre-Refi (All Cash In)Post-Refi (80% LTV, $160K ARV)Cash Invested$44,000 (worst case)$15,750 (after cash-out)Loan Balance$99,750$128,000Property Value (ARV)$160,000$160,000Equity$60,250$32,000Rent$1,500–$1,600/month$1,500–$1,600/monthPITI$1,050/month$1,150–$1,250/month (depends on refi rate)Vacancy (8%)$120–$128/month$120–$128/monthCapEx (6%)$90–$96/month$90–$96/monthNet Cash Flow~$234–$334/month~$34–$234/monthAnnual Cash Flow~$2,808–$4,008~$408–$2,808Cash-on-Cash Return (CoC)~6–9%~3–17% (depending on rent + rate)TakeawaysIf I end up at the full $44K worst case, pre-refi CoC sits around 6–9%.After refinance, I recycle most of my capital  (only ~$15.7K left in the deal) which bumps CoC anywhere from 3% to as high as 17% depending on where rent lands ($1,500 vs $1,600) and what interest rate I get on the refi.Even if cash flow is modest at the start, I’ll still be holding ~$32K in equity and a property that benefits (albeit modestly) from appreciation and rent growth in my market.It’s definitely not the “perfect BRRRR” where every dollar comes back out, but I still see this as a long-term win.Curious how others approach it when you land closer to “worst case” than “best case.”