Cash Flow Note Buying And Selling

A Summary Of The Notes Business

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With the state of the economy and the dire straits in which many individuals and families are finding themselves, many people are searching out ways to increase their monthly income and one choice is the cash flow notes. There are many people that have been awarded judgments in malpractice suits or insurance settlements due to a car accident or some other form of injury at no fault of their own with money from the awarded judgment coming in each month.

However, very often this awarded cash flow note is spread out over many years and does not provide enough income to meet monthly bills or other unexpected expenses. Wouldn’t it be great if the bulk of these awarded judgments be collected all at once? You could payoff medical bills or other pressing bills that are causing stress in your life and reduce the amount of worry that is associated with a stagnant economy.

Others have a monthly cash flow notes in the form of a lottery winnings that are paid out over many years. In some cases this is an excellent choice for lottery winners since statistics show that lottery winners given a lump sum payment of winnings very often end up broke and in debt. However, if you are a lottery winner and have the discipline to control spending and invest wisely, selling your monthly cash flow note may be a wise option.

Another group of people that can benefit from selling a cash flow note are mortgage note holders. There are many people that have real estate holdings either in private residential property (houses) or commercial property (buildings) that could benefit immensely by freeing up cash that could be invested elsewhere to increase profitability.

Pit Falls Of Cash Flow Note Selling

Although people that have a structured settlement that provides them with a monthly income, some people are not candidates to sell their note. It should be emphasized that when selling a cash flow note that the seller will not receive the entire amount of the original balance. Note buyers offer lump sum payouts for cash flow notes at a reduced amount, usually around 80% or lower of the sum total. Note sellers will receive a lump sum at the discount but for people that are undisciplined in financial matters will very often find themselves in financial distress once they blow through the lump some paid out.

Although the initial cash flow note settlement is not enough to make a significant impact on monthly bills, the note holder will still have this money coming in each month. Before selling your structured settlement, careful consideration should be given to the possible financial implications once the note is sold and the lump sum payout is spent.

The Best Reason For Selling Your Cash Flow Note

People that are schooled in financial matters that have a cash flow note are the best candidates for selling a note that is currently in place. These people usually have cash flow notes generating income from real estate holdings and usually sell a note to free up cash for other investments to increase their monthly cash flow.

Other candidates include structured settlement holders that need to sell their settlement in order to meet obligations such as emergency medical situations or to avoid foreclosure on their homes. Another acceptable selling situation would be in order to pay for a child’s education once all other forms of funding have been exhausted.

Selling a structured settlement, lottery winnings, annuity payments or real estate notes can be profitable for the note holder, but careful consideration should be given to the financial health of the seller once the sale is final. Many times note sellers regret selling their cash flow notes because they have not taken the time to do the proper research to make an informed financial decision.