Investment Strategy: Round 3 – Litigation Finance
For the third iteration of my credit card arbitrage strategy, I pivoted to litigation finance through YieldStreet, targeting long-term, high-yield investment opportunities in legal funding portfolios. This approach aimed to capitalize on the consistent returns offered by litigation financing while maintaining the arbitrage advantage of low-cost credit.
The target strategy projected a 13% annual return with a 3% borrowing cost, theoretically generating a 10% net profit margin through the Law Firm Financing VII portfolio.
Balance Transfer Portfolio: $202,970 Total
I executed a refined balance transfer strategy across 11 different credit cards, leveraging improved promotional terms and reduced fees compared to previous rounds.
| Date | Card | Terms | Amount | Balance |
|---|---|---|---|---|
| 01/13/2018 | Discover More | 13m/0%/2% | $18,000 | $18,360 |
| 01/21/2018 | Chase Slate | 16m/0%/0% | $11,970 | $11,970 |
| 02/06/2018 | U.S. Bank Cash 365 American Express | 15m/0%/3% | $24,000 | $24,720 |
| 02/10/2018 | Alliant Credit Union Visa Platinum | 12m/0%/0% | $20,000 | $20,000 |
| 02/11/2018 | Chase Ink Business Cash | 12m/0%/2% | $10,000 | $10,200 |
| 02/13/2018 | Discover it | 12m/0%/3% | $18,100 | $18,643 |
| 02/13/2018 | NFL Extra Points | 15m/0%/3% | $9,700 | $9,991 |
| 03/01/2018 | Citi ThankYou Preferred | 15m/0%/3% | $26,200 | $26,986 |
| 03/06/2018 | Bank of America Cash Rewards | 11m/0%/3% | $19,400 | $19,982 |
| 03/08/2018 | Citi Double Cash | 8m/0%/3% | $26,200 | $26,986 |
| 03/30/2018 | Bank of America BankAmericard | 18m/0%/3% | $19,400 | $19,982 |
| Portfolio Summary | 12.86 months, 0% APR, 2.39% average fee | $202,970 | $207,820 | |
Key Metrics: Total capital deployed: $202,970 across 11 credit cards. Total borrowing cost: $4,850 (2.39% average fee) for a 12.86-month interest-free period. This represents the most cost-effective round with the lowest average fee structure.
Investment Performance: 11.27% Net ROI
The litigation finance strategy delivered the highest returns of all three rounds, demonstrating the effectiveness of refined execution and improved platform selection.
| Component | Net Profit/Loss | Return Rate |
|---|---|---|
| Law Firm Financing VII (YieldStreet) | $27,733 | 13.66% |
| Balance Transfer Fees | ($4,850) | (2.39%) |
| Net Return on Investment | $22,883 | 11.27% |
Performance Summary: The YieldStreet Law Firm Financing VII portfolio generated an exceptional 13.66% return over the 12.86-month period. After accounting for the $4,850 in balance transfer fees, the strategy achieved a net return of 11.27%, representing $22,883 in profit. This round demonstrated the highest efficiency with the lowest borrowing costs and strongest investment performance.
