Cash flow notes are certainly getting popular these days and fast becoming one of the most used and potentially profitable financial instrument. To define a cash flow note, it is a legal binding contract between a borrower and a lender, very much like promissory notes. In the note the details of the contract is documented like the conditions and term of payment, how much is the interest, and how long before the debt should be settled. In layman’s term, cash flow notes are pretty much like debt IOUs that one can buy or sell. Once bought, the owner automatically becomes the creditor. There are over 60 different types of cash flow notes known and some of them includes tax lien certificates, mortgages, , deeds of trust, structured settlements, annuities, lottery winnings and the ever popular real estate cash flow notes. Cash flow notes are payment contracts which are totally legitimate, thus making them a valuable asset to most people. These notes can easily be sold for a lump sum of money. Many people have found out that buying and selling of cash flow notes can be a lucrative business practice.
If you are in an immediate need to pay off a credit card debt or purchasing a certain property, selling cash flow notes for cash is a great way to meet that need. There have been people who have had success with buying and selling discounted real estate cash flow notes. These types of notes are secured by an actual existing property like a residential house or a commercial building. The value of such cash flow notes are determined by several factors like the type of property, its location and its current market price. If the borrower fails to pay the debt within the agreed time frame then the property is defaulted to the holder of the cash flow note, on which he can choose to sell the property as payment for the debt.
Buying and selling of cash flow notes can be a tricky business, you can lose money or be scammed if you do not know what you are doing. See to it that you know how cash flow works or master how to properly write a correct cash flow statement format.
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