Is this strategy worth the effort?

[Guy Yoes]

In a nutshell: I have 3 properties with no debt on them. The current value of them is about 260K. 

After doing taxes I notice all my income is passive (not an RE pro) and while I can take some losses I don't have any interest to deduct from my earnings. Would it be advisable to borrow against the value of the properties (about 150K in loans) and put that into notes? Say the loan is at 5% and the notes pay 10%. 

By holding the properties (now with debt) I would have less cash flow from them, but still, have some deductions (repairs, prop tax and ins. and interest). I would make a little more income from the notes which would be taxed.

I am retired but still work part-time and can easily manage the 3 properties but don't want to leverage into 3 more. We travel often spending time with family and I  currently spend less than 20 hours a month on the properties I have now.

Is anyone else doing this? 

Thank you in advance for your comments.