Also its my understanding that if he bought the note for lets say 10k  and it had an unpaid balance of say 25k  all arrears and cost including on the opening bid and if it had sold 3P at the sale for say  40k  Bob would get his 25k .. which would give him a 15k profit on the deal and the extra 15k would go to next in line if their were leins or the trustor/owner who lost it. 

Sales prices and mortgage rates make it really hard to find good deals today.Wholesaling sounds good, but you could make better money working extra shifts as a nurse.You could look for run-down properties as buy-and-holds.

That would mean the extra 5k would technically come out of my pocket, right? 

Jay mentioned the collateral backing the fund and if you want to compare something like a PPR fund backed by non-performing notes (at least when they bought them) to a fund having all performing notes, in solid real estate markets with real collateral values I cant see why anyone would want to take on so much extra risk with no reward? 

I'd only play with extra money and pull back gains as it's super volatile.And it's not investing to me.

The extra cost is typically well worth the benefit. 

We will take the quick deal any day over making a few extra thousand bucks.  

. :)   I'll likely do the HELOC and not worry about the extra taxes on gains over $500k when I finally do sell someday. 

For example, if you are in a secured position and invest $25k and can get 10% per year at $2500 or you can get 15% unsecured which is $3750, are people willing to risk the extra $1,250 a year where you could lose all of your $25,000 investment compared to being secured where chance of losing it all I would view as astronomically lower?

Remember to always budget 10-25% (depending on age/condition) extra as a buffer.