High-Risk Notes? Is there such a thing?

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I'm looking to learn more about and maybe get involved in notes. What I'm wondering is, do most individuals who buy notes look for notes on local properties, or do they not care where the property itself is?

Also, do people invest in "high-risk" notes? I'm thinking of notes which would either have a higher interest rate or be overly-discounted (relative to most private notes) because the payor is percieved as having a higher risk of default (bad credit, bad payment history, etc.). These would seem appealing because either (1) I would get a much better return or (2) I would ultimately get the property, which would also be good (if it were local). Do lots of people do this and I'm just in the dark, or is there some fundamental flaw with what I'm proposing?
Thanks,